Lido contributor requests $1.5 million funding to grow Solana liquid staking

Quick Take

  • The P2P team submitted a proposal, requesting Lido DAO $1.5 million in funding.
  • The funding would be used to sustain and grow Lido’s liquid staking service on Solana.

The P2P team, which manages Lido Finance’s deployment on Solana, has submitted a funding proposal to the Lido DAO community. The Lido contributor is requesting $1.5 million in funding to sustain and grow the project on the network and to avoid ceasing operations.

“We have made significant strides in both product and business development. However, to continue our efforts and take Lido on Solana to the next level, we seek financial support from the Lido DAO,” said Yuri Mediakov, senior product manager at P2P.

The P2P team is requesting a total of $1.5 million over the next 12 months. This includes a development retainer of $200,000 per quarter, an annual marketing budget of $600,000, and $100,000 annually for customer support. In return, P2P expects to capture more than 1% of Solana’s staking market share and further develop the product.

Alternatively, if the Lido DAO cannot provide the requested financial support, the proposal suggested initiating a sunsetting process, similar to what happened with Lido on Polkadot and Kusama. The plan would involve gradually discontinuing support for Lido on Solana by February 2024.

"We propose starting a sunset process if financial support from Lido DAO is unavailable, similar to Lido on Polkadot and Kusama," Mediakov wrote.

Requesting financial support from Lido DAO

P2P is an active participant in the Solana ecosystem, operating a validator on the network and supporting infrastructure for Solana-based projects.

After taking ownership of Lido on Solana from Chorus One in March 2022, the team released an updated version of the smart contract and reworked the frontend user experience.

The P2P team said it believed that continuing Lido operations on the Solana would be beneficial to the project as the Solana's DeFi ecosystem grows. However, it highlighted that with a 1% market share, Lido on Solana would only generate an annual income of 10,191 SOL ($200,000) at current prices.

Lido Finance is a liquid staking solution that enables users to earn staking rewards on an underlying asset while unlocking its utility and liquidity across various DeFi applications in the form of a liquid staking derivative token.

Lido currently dominates the liquid staking market on Ethereum with $14 billion in total value locked, according to DeFiLlama. However, its presence on Solana is smaller, with about $50 million in locked value. It also faces stiff competition from players like Marinade Finance and Jito within Solana's liquid staking niche.

© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.