As Lido bids goodbye to Solana, SOL rallies

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On 16 October, Lido announced its plan to exit Solana.
SOL rallied by over 5% in the past 24 hours.

Leading decentralized liquid staking protocol Lido Finance [LDO] has announced that it will cease operations on the Solana [SOL] blockchain. The decision was made following a community vote and will be implemented in a phased approach over the next few months.

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

Realistic or not, here’s SOL’s market cap in ETH terms

Lido’s brief stint on Solana

Lido launched on Solana in September 2021 and allowed the chain’s users to stake their SOL coins in return for Staked Solana [stSOL] tokens.

Two years into its operation on the chain, Yuri Mediakov, who leads P2P Validator, the development team overseeing Lido on Solana since March 2022, put forth a funding proposal to the Lido DAO.

As noted by Mediakov, P2P Validator took over the operation of Lido on Solana from Chorus One and has since operated it.

According to Mediakov, P2P Validator has made significant progress, some of which included growing the protocol’s TVL from 954,000 SOL in December 2021 to 4.1 million SOL in October 2022.

This marked a remarkable 330% growth and growing its market share in Q2 2022 and growing the same till FTX’s unexpected collapse in the same year.

Mediakov added further that decentralized finance (DeFi) protocol integrations have increased from four to 22 after P2P Validator took over control, and stSOL has secured listings in 12 major wallets.

The development team has also forged partnerships with entities such as Hubble, Kamino, Francium, Solend, and Aldrin since March 2022.

During the 2022-2023 fiscal year, the development team invested approximately $700,000 in Lido on Solana. However, the proposal highlighted,

“Revenue so far was around $220,000 (developer fee + milestone reward), resulting in a loss of $484,000.”

To sustain Lido’s operations on the chain, Mediakov requested $1.5 million from the Lido DAO Treasury.

He added that in the event of the DAO refusing the request, Lido on Solana would be discontinued, mirroring the previous instances of Lido on Polkadot [DOT] and Kusama [KSM], which also turned out to be financially unviable.

Voting on the proposal commenced on 28 September and ended on 5 October. According to information from the open-source voting platform Snapshot, 93% of all votes cast favored discontinuing Lido on Solana.

Source: Snapshot

Next steps

During the ongoing sunsetting process, holders of the stSOL tokens will continue to receive rewards. However, by 4 February 2024, all token holders must have unstaked their SOL coins through the protocol’s command-line interface. Staking on Lido on Solana ceased on 16 October.

Also, node operators will receive voluntary off-boarding guidance from P2P Validator, and Lido NOM contributors using Lido community channels. The onboarding process is scheduled to commence on 17 November.

By 4 February, Lido on Solana frontend support will be discontinued, and unstaking will exclusively be possible through the Command Line Interface.

Read Solana’s [SOL] Price Prediction 2023-2024

SOL records gains

Interestingly, despite Lido’s decision, SOL’s value climbed by 5% in the past 24 hours. According to data from CoinMarketCap, the altcoin exchanged hands at $24.09 at press time.

Its price movements observed on a 12-hour chart revealed increased accumulation. As of this writing, buying activity outpaced sell-offs, with key momentum indicators spotted above their respective center lines.