Lido Proclaims Section-Out of Polygon Liquid Staking Protocol After Group Vote

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

The method is about to start shortly.

Lido’s Exit from Polygon

Initially launched in 2021 by way of a proposal by Shard Labs, Lido on Polygon confronted challenges similar to restricted person adoption, inadequate rewards, and excessive useful resource upkeep calls for, in accordance with the official weblog publish. Moreover, the evolving DeFi house – particularly the rising deal with zkEVM options – has diminished the demand for liquid staking on Polygon PoS, which hindered Lido’s capability to function a foundational DeFi layer.

These components, mixed with Lido’s strategic deal with 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 will likely be discontinued through the transition, and a brief pause in operations is scheduled between January 15-22, 2025, throughout which no withdrawals will likely be processed.

Customers are inspired to unstake their MATIC tokens by way of 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 way of blockchain explorer instruments.

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

Lido has beforehand halted its operations on Solana final 12 months. This determination 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 determination 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 concerning a brand new bridging mechanism, which raised issues concerning the danger profile of bridged belongings.

In a associated growth, liquid restaking protocol Swell introduced 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.