Lido has announced the discontinuation of its staking services for the Polygon proof-of-stake (PoS) chain, following a community-approved vote in November.
Lido has announced the discontinuation of its staking services for the Polygon proof-of-stake (PoS) chain, following a community-approved vote in November. The phase-out, which took effect on Monday, is attributed to a combination of challenges, including limited user adoption and insufficient rewards.
Users of Lido's Polygon service, which allowed staking of MATIC tokens in exchange for liquid staking tokens known as static, have been informed that they can withdraw their funds until June 16, 2025. After this date, withdrawals will only be possible through explorer tools, according to the official announcement.
The decision to wind down the service comes amid ongoing shifts within the DeFi landscape. Lido noted that its community has increasingly focused on Ethereum, leading to the approval of a new initiative aimed at making solo staking on Ethereum more accessible.
This marks a significant shift from the Polygon PoS chain, where Lido has struggled to achieve its intended impact due to resource-intensive maintenance and evolving ecosystem dynamics.
Earlier this year, Lido faced similar challenges with its Solana staking service, which was discontinued after recording significant financial losses. The protocol reported losses of $484,000 against revenues of $220,000 from that service.
As Lido steps back from Polygon, Aave, the largest decentralized application on the Polygon network by total value locked (TVL), is also reconsidering its presence.
A proposal has been put forth to withdraw Aave's lending services from the Polygon PoS chain in light of a recent initiative to utilize bridged stablecoins for yield generation.
Lido remains the largest liquid staking protocol for Ethereum, with a TVL of approximately $39.3 billion, as of the latest reports.
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