Lido on Solana to potentially wind down following financial drought
The fate of Lido on Solana now hangs in the balance, hinging on a community vote slated to take place in four weeks
Ebru-Omer/Shutterstock, modified by Blockworks
Lido on Solana could be on the verge of winding down its operations unless it secures financial backing from the Lido DAO community, according to a funding proposal on Monday.
The P2P team, which has been steering the project since acquiring it from Chorus One in March 2022, has laid out a critical funding ask aimed at sustaining and expanding its development, analytics and marketing initiatives.
Despite making considerable strides in both product and business development — growing its Total Value Locked from 954,000 SOL to 4.1 million SOL as of October 2022 — the team finds itself in a precarious financial position.
SOL, or Solana’s native token used to pay fees and staking, has fallen more than 92% from its all-time high of $259, witnessed Nov. 6, 2021, Coingecko data shows.
A reported investment of $700,000 by P2P has so far only yielded $220,000 in revenue, leaving a gaping deficit of $484,000, Yuri Mediakov, product manager at P2P said in the proposal.
In their call to the Lido DAO community, the P2P team is presenting two contrasting scenarios for the future of the project.
The first involves receiving a development retainer of $200,000 per quarter, an annual marketing budget of $600,000 and $100,000 for customer support — totaling $1.5 million over the next 12 months.
“We are at a critical juncture where the decisions we make today will shape the future of Lido on Solana,” Mediakov said. “We aim to bring this proposal to a Snapshot vote as soon as possible.”
Mediakov claims the funding would not only cover existing operational costs but also drive the project forward to capture more than 1% of the Solana staking market.
The second, more somber, option outlines a “sunset process” that would begin the gradual winding down of operations. Similar actions were taken last month when MixBytes, the team overseeing Lido on Kusama and Polkadot, ended technical and developer support.
Total liquid staked SOL currently amounts to about $203 million in TVL, of which about $50 million is Lido’s stSOL, per DeFi Llama.
The utility of staking derivatives on Solana was lower than on Ethereum prior to the Shapella upgrade, since Solana always allowed unbonding within about 2-6 days.
If financial backing isn’t secured, new staking deposits will cease beginning Oct. 10 and frontend support will be terminated by Feb. 10 of next year, the proposal reads.
In that instance, the team is seeking $20,000 per month from Lido DAO for technical maintenance over its sunset period.
Macauley Peterson contributed reporting.
Get the news in your inbox. Explore Blockworks newsletters:
- The Breakdown: Decoding crypto and the markets. Daily.
- 0xResearch: Alpha in your inbox. Think like an analyst.
