Due to limited user adoption and a renewed focus on Ethereum, Lido Finance, the largest liquid staking protocol in DeFi, is winding down its operations on the Polygon network.
This decision came following a request from L Token (LDO) holders, discussions within the DAO forum, and a community vote where the majority (99%) favored the proposal.
The decision was made after a November vote that considered two options: either transitioning away from Polygon or reassessing the middleware’s economics.
The rationale behind the wind-down is the challenges Lido faced on Polygon, such as high maintenance costs, insufficient rewards, and a changing DeFi landscape, with a growing emphasis on zkEVM solutions (zero-knowledge Ethereum Virtual Machine).
According to the Lido team, this transition has resulted in decreased demand for liquid staking solutions on Polygon PoS, impacting Lido’s potential as a key DeFi building block on the network. Additionally, other liquid staking options have emerged in a smaller-than-expected ecosystem.
