Lido Announces Phase-Out of Polygon Liquid Staking Protocol After Community Vote

Lido, the outstanding liquid staking protocol, has introduced the discontinuation of its liquid staking protocol on Polygon, marking the top of its operations over the approaching months. Following in depth discussions on the DAO discussion board and a neighborhood vote, LDO token holders formally permitted the choice to section out Lido on Polygon.

The method is ready to start shortly.

Lido’s Exit from Polygon

Initially launched in 2021 by a proposal by Shard Labs, Lido on Polygon confronted challenges resembling restricted consumer adoption, inadequate rewards, and excessive useful resource upkeep calls for, in response to the official blog post. Moreover, the evolving DeFi area – particularly the rising give attention to zkEVM options – has diminished the demand for liquid staking on Polygon PoS, which hindered Lido’s skill to function a foundational DeFi layer.

These components, mixed with Lido’s strategic give attention to Ethereum, as outlined within the GOOSE and reGOOSE governance initiatives, led to the reevaluation and eventual discontinuation of Lido on Polygon.

The phase-out course of carries a number of key implications for stMATIC holders. As such, rewards shall be discontinued in the course of the transition, and a short lived pause in operations is scheduled between January 15-22, 2025, throughout which no withdrawals shall be processed.

Customers are inspired to unstake their MATIC tokens by the Lido on the Polygon front-end earlier than June 16, 2025. After this deadline, front-end help will stop, and withdrawals will solely be accessible by blockchain explorer instruments.

The timeline begins on December 16, 2024, when new staking will now not be accepted. A six-month withdrawal interval will observe, spanning December 16, 2024, to June 16, 2025, to facilitate a easy transition for customers.

Lido has beforehand halted its operations on Solana final 12 months. This choice got here after a neighborhood vote, citing monetary sustainability issues and low charges as key points. Lido was initially launched on Solana on September 8, 2021.

Setbacks for Polygon Ecosystem

Lido’s present choice to wind down on Polygon comes after lending protocol Aave proposed discontinuing its operations. The proposal was made by Aave’s founder, Marc Zeller, on December 13 in response to Polygon’s governance request relating to a brand new bridging mechanism, which raised issues in regards to the threat profile of bridged belongings.

In a associated growth, liquid restaking protocol Swell announced that its Layer 2 is migrating to the Optimism Superchain, transferring away from the Polygon Chain Improvement Package (CDK) as a part of this transition in October.