2024

Lido DAO

DeFi

Polygon

Shiba Inu

Staking protocol Lido said it is winding down operations on the Polygon network due to limited user adoption, evolving ecosystem dynamics and a strategic refocus on Ethereum.&nbsp;
In a Dec. 16 blog <a data-ct-non-breakable="null" href="https://blog.lido.fi/lido-on-polygon-sunset/" rel="null" target="null" text="null" title="null">post</a>, the Lido Finance team said the decision was made after a request by <a data-ct-non-breakable="null" href="https://cointelegraph.com/learn/articles/what-is-lido-liquidity-for-staked-assets" rel="null" target="null" text="null" title="null">Lido DAO Token</a> (LDO) holders, “extensive DAO forum discussion” and a community vote where 99% favored the proposal.
Two proposals were considered in the November <a data-ct-non-breakable="null" href="https://snapshot.box/?ref=blog.lido.fi#/s:lido-snapshot.eth/proposal/0x2f745cb0147791cf656ab292f872f8277ff9df5c9585dbc6622dbda88362d402/votes" rel="null" target="null" text="null" title="null">vote</a>, one being the transition away from Polygon and the other being “reevaluating the economics of the middleware.”
<blockquote class="twitter-tweet">
 Justification The Lido on Polygon sunset process is taking place following extensive discussions across Lido DAO forum and a governance vote by LDO token holders. A strategic refocus on Ethereum and lack of scalability on Polygon POS has led to the discontinuation of staking…— Lido (@LidoFinance) <a href="https://twitter.com/LidoFinance/status/1868668101325472162?ref_src=twsrc%5Etfw">December 16, 2024</a>
</blockquote>
According to the team, Lido faced significant challenges on Polygon, such as resource-intensive maintenance requirements, insufficient rewards and the shifting landscape of <a data-ct-non-breakable="null" href="https://cointelegraph.com/learn/articles/defi-a-comprehensive-guide-to-decentralized-finance" rel="null" target="null" text="null" title="null">decentralized finance</a> (DeFi), particularly with “increased focus on zkEVM solutions.”&nbsp;
“This transition has led to reduced demand for liquid staking solutions on Polygon PoS, affecting Lido on Polygon’s potential as a foundational DeFi building block,” the Lido team said.&nbsp;
“Additionally, alternative liquid staking solutions have been built within an ecosystem that proved smaller than initially anticipated.”&nbsp;
During the discussion phase before the vote, Shard Labs, which initially <a data-ct-non-breakable="null" href="https://research.lido.fi/t/lido-for-polygon-proposal-by-shard-labs/816" rel="null" target="null" text="null" title="null">proposed</a> bringing the staking service to Polygon in 2021, <a data-ct-non-breakable="null" href="https://snapshot.box/?ref=blog.lido.fi#/s:lido-snapshot.eth/proposal/0x2f745cb0147791cf656ab292f872f8277ff9df5c9585dbc6622dbda88362d402/discussion" rel="null" target="null" text="null" title="null">said</a> as a result of “the DeFi migration push toward zkEVM,” demand for Polygon proof-of-stake (PoS) and liquid staking as a “building block of other protocols lost its footing.”&nbsp;
Related: <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/lido-finance-1-million-validators-fueling-defi" rel="null" target="null" text="null" title="null">Lido Finance hits 1M validators, fueling the growth of DeFi</a>
As of Dec. 16, Lido staking requests on Polygon are no longer available. However, users can still withdraw their <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/polygon-pos-network-token-upgrade-matic-to-pol" rel="null" target="null" text="null" title="null">staked MATIC</a> through the Lido interface on Polygon up until June 16, 2025. All rewards have been discontinued.
The protocol will also temporarily suspend all withdrawals between Jan. 15 and Jan. 22 next year.&nbsp;
By June 16, the Lido team says front-end support will end, and withdrawals can only be processed through browser tools.
<blockquote class="twitter-tweet">
 Timelines Key dates for stMATIC holders to keep in mind are: • December 16, 2024: Staking on Lido for Polygon will be discontinued. • December 16, 2024 – June 16, 2025: Transition period: Withdrawals can be processed via the Lido on Polygon UI. • January 15-22, 2025:…— Lido (@LidoFinance) <a href="https://twitter.com/LidoFinance/status/1868668103103598771?ref_src=twsrc%5Etfw">December 16, 2024</a>
</blockquote>
Lido Finance had a total value locked (TVL) of $38 billion as of Dec. 16, <a data-ct-non-breakable="null" href="https://defillama.com/protocol/lido" rel="null" target="null" text="null" title="null">according</a> to DefiLlama data, and is the largest liquid staking protocol in the DeFi market.&nbsp;
According to Dune, Lido <a data-ct-non-breakable="null" href="https://dune.com/lido/lido-on-polygon" rel="null" target="null" text="null" title="null">has</a> $45 million in staked tokens on Polygon. DefiLlama <a data-ct-non-breakable="null" href="https://defillama.com/chain/Polygon" rel="null" target="null" text="null" title="null">data</a> shows the Polygon network has over $1.2 billion in TVL.&nbsp;
Last year, Lido <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/lido-finance-wind-down-solana-operations-after-low-fees" rel="null" target="null" text="null" title="null">announced it was ceasing operations</a> on the Solana blockchain following a community vote and concerns over unsustainable financials and low fees. The protocol was <a data-ct-non-breakable="null" href="https://lido.fi/" rel="null" target="null" text="null" title="null">launched</a> on Solana on Sept. 8, 2021.&nbsp;
Aave, one of the most prominent lending protocols on the Polygon network, has also <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/aave-dao-considers-halting-operations-polygon-proposed-bridge" rel="null" target="null" text="null" title="null">proposed ceasing operations on Polygon</a> over concerns about an upcoming review of the risk profile of bridged assets on the network.
Aave chain founder Marc Zeller launched the Dec. 13 proposal and said it was a response to Polygon’s governance request<a data-ct-non-breakable="null" href="https://cointelegraph.com/news/allez-labs-proposes-yield-opportunity-polygon-pos-bridge-funds" rel="null" target="null" text="null" title="null"> to use over $1 billion in stablecoin reserves</a> to farm on other protocols.&nbsp;
Magazine: <a data-ct-non-breakable="null" href="https://cointelegraph.com/magazine/how-shibtoshi-gambled-95k-shiba-inu-billionaire/" rel="null" target="null" text="null" title="null">How Shibtoshi gambled 37 ETH and became a Shiba Inu billionaire</a>

Lido to discontinue services on Polygon in coming months after low adoption

Cointelegraph

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