Decentralized staking protocol Lido could sunset its operations on Polygon just seven months after it launched on the network.
The community is currently debating on a proposal introduced on Oct. 17 to withdraw from the chain. The proposal’s author made the case for sunsetting Lido on Polygon by citing lacklustre revenue, brand risk, expensive compensation structure and uncertainty surrounding Polygon’s roadmap.
“I am not an active DAO member, but simply a bag holder, and this ROI is a sheer waste of LDO/stETH incentives,” wrote the proposal’s author “kentie” on the Lido governance forum.
Kentie also pointed to the technical upgrade that Lido underwent on Polygon, which seemingly introduced a bug that caused withdrawals to be halted for 25 days.
“While we were fortunate to have no FUD around this period, this seems to pose a reputational risk to a protocol with $15B in assets,” said kentie.
So far, the response to the proposal has leaned towards keeping Lido’s operations on Polygon intact.
“If LDO holders would vote to sunset Lido on Polygon protocol it would be a really bad signal to anybody who wants to collaborate with the DAO as trust would be highly impacted. It removes the weight from voted-in proposals and drives to grant-driven collaborations and different type of environments,” said Marin, a member of the protocol relations team at Lido.
The proposal comes just days after the Lido community voted to sunset Lido on the Solana protocol. As of Oct. 16, Lido stopped accepting staking requests and all node operators off-boarding is scheduled to commence on Nov. 17, while users will have until Feb. 4, 2024 to unstake their assets from the Solana frontend.
After extensive DAO discussion followed by community vote, the sunsetting of Lido on Solana was approved by LDO holders and will begin shortly.
More information here: https://t.co/MyImL1qpap
— Lido (@LidoFinance) October 16, 2023