A significant decision has been made by decentralized liquid staking giant, Lido Finance. They have chosen to cease all new Solana token staking (SOL). This decision comes after a dominant vote from Lido’s LDO token holders, advocating for the cessation of the service. New users will no longer be able to stake SOL on Lido, and by February 2024, the functionality to withdraw existing tokens will be discontinued. Current data shows that Lido has $55 million worth of locked SOL tokens, a sharp decline from its peak in April 2022 of $440 million.
Factors influencing the DAO’s decision
An impressive 92% of the Lido community expressed their desire to end the product. The discussions leading up to this pivotal decision highlighted concerns about the high maintenance costs cited by the P2P developers, a major sticking point for many.
P2P Validator, the developers behind the Lido product, revealed in a proposal in early September that they had incurred losses exceeding $480,000 the previous year. This figure starkly contrasts with the $700,000 investment made to realize the product. The team expressed reservations about achieving the set goals for the following year, citing challenging market scenarios.