Lido Finance to Cease Support for Solana Without Funding Agreement

The team behind the DeFi protocol Lido on Solana is considering halting operations if a funding agreement cannot be reached.

Lido Finance to Cease Support for Solana Without Funding Agreement

According to a proposal on September 4th, the Lido team on Solana P2P has requested $1.5 million in funding from Lido DAO to sustain operations on Solana over the next 12 months.

Specifically, these funds would cover development costs, establish marketing channels, and support the community. In return, the team commits to bringing in 1% of the staking market share on Solana, as well as developing new features and enhancing user experience.

Before proposing this funding request, the P2P team listed several achievements since beginning support in March 2022, ranging from technological aspects such as building source code, validator vision, launching v2 smart contracts, UI improvements, and generating network revenue.

The team is outlining a scenario where, if the $1.5 million funding is not secured, Solana will gradually be removed from the DeFi protocol, similar to previous proposals for Polkadot and Kusama.

The proposed timeline for discontinuing support for the Solana ecosystem is as follows:

• October 9, 2023: Staking functions will no longer be available on Solana.
• October 10, 2023: Validator nodes will be shut off from the network.
• February 10, 2024: Support for the network on the user interface will cease, and unstaking functions will only be available via CLI (command-line interface).

Under this plan, the team requests Lido DAO to provide $20,000 monthly for technical maintenance during the 5-month removal period, starting from September 4th.

The proposal will be put to a vote over a 4-week period, allowing Lido DAO to choose between two options, though outcomes may change if the development team identifies a better solution.

Lido Finance is one of the early liquid staking solutions dominating the sector with approximately $14 billion in Total Value Locked (TVL) across its platform. The protocol expanded to Solana in September 2021, and the current proposal could impact approximately $50 million worth of SOL currently staked on Lido, according to DefiLlama.

Amount of SOL staked on Lido Finance. Source: DefiLlama