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

Lido, the distinguished 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 group vote, LDO token holders formally accredited the choice to section out Lido on Polygon.

The method is ready to start shortly.

Lido’s Exit from Polygon

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

These elements, 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 might be discontinued through the transition, and a brief pause in operations is scheduled between January 15-22, 2025, throughout which no withdrawals might be processed.

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

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

Lido has beforehand halted its operations on Solana final yr. This choice got here after a group 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 danger profile of bridged belongings.

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