Lido begins phasing out staking service for Polygon PoS chain

Quick Take

  • Lido is winding down its staking service on Polygon due to various challenges, including limited user adoption.

Lido, the leading liquid staking protocol by total value locked, initiated the phase-out of its staking services for the Polygon PoS chain following a community-approved vote in November.

Its implementation on the Polygon PoS network allowed users to stake Polygon's MATIC tokens for liquid staking tokens called stMATIC. 

The protocol discontinued the Polygon staking service on Monday and notified users that they could withdraw funds until June 16, 2025. After this date, withdrawals will be available through explorer tools, the announcement said.

The announcement said that a combination of various factors led Lido to reevaluate and eventually initiate the sunsetting of Lido on Polygon. 

“Lido on Polygon has faced significant challenges in achieving its intended impact,” the Monday announcement said. “Several factors have contributed to this situation: limited user adoption, insufficient rewards, resource-intensive maintenance requirements, and evolving ecosystem dynamics.”

Furthermore, Lido said it had observed LDO token holders’ shift of focus to Ethereum. Earlier this year, Lido DAO approved an initiative to launch its “community staking module,” designed to make Ethereum solo staking more inclusive.

Last year, Lido DAO voted to discontinue its Solana staking service for similar reasons, as losses of $484,000 outweighed its revenue of $220,000.

Lido is the largest liquid staking protocol for ETH and currently ranks as the top DeFi protocol by total value locked, with around $39.3 billion in TVL at the time of writing.

Lido's sunset on Polygon takes place as Aave, the largest dApp on Polygon by TVL, received a proposal from a contributor group to withdraw its lending services from Polygon’s PoS chain in response to a Polygon proposal aiming to use bridged stablecoins for yield generation.


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About Author

Danny Park is an East Asia reporter at The Block writing on topics including Web3 developments and crypto regulations in the region. He was formerly a reporter at Forkast.News, where he actively covered the downfall of Terra-Luna and FTX. Based in Seoul, Danny has previously produced written and video content for media companies in Korea, Hong Kong and China. He holds a Bachelor of Journalism and Business Marketing from the University of Hong Kong.

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