Community Proposal: Discontinuing Polygon Staking on Lido
A community member, known as kentie, recently published a proposal suggesting the discontinuation of support for Polygon (MATIC) on Lido Finance. This decision comes months after the protocol paused MATIC’s staking and withdrawal functionality due to a bug affecting stMATIC withdrawals.
Kentie’s proposal, published on October 17, cites several reasons for sunsetting MATIC staking, including lackluster revenue generation, brand risks, and uncertainty surrounding Polygon’s roadmap. The proposal also advocates for Lido to become a native Ethereum (ETH) liquid staking provider, avoiding risks associated with smaller pockets of Total Value Locked (TVL).
According to kentie, Polygon has struggled to retain DeFi TVL in comparison to other Layer 2 solutions. This assertion is supported by data showing similar trends between Solana and Polygon TVLs since October 2022.
Addressing Concerns
Kentie highlighted a recent incident related to Polygon, stating that it posed a reputational risk to Lido. This incident involved a bug that halted tokenized MATIC withdrawals from Lido for over 20 days. However, Marin Tvrdić, the protocol relations contributor for Lido, contested this claim. Tvrdić clarified that the recent incident with Polygon should not be considered a valid reason for discontinuing support. He emphasized that no stakers were impacted during the incident, and services resumed after the code underwent rigorous auditing. Tvrdić also corrected the metric mentioned by kentie, stating that the Total Value Locked (TVL) should be measured in MATIC value, not USD value. He pointed out that Lido on Polygon protocol is at its peak in terms of staked MATIC, even though the USD value decreased due to market conditions.
Lido’s Strategic Moves
Kentie’s proposal follows Lido’s decision to shut down operations on the Solana network in the coming months. According to the Lido team, this decision was made to ensure the continued success of the broader Lido protocol ecosystem.
About Lido Finance
Lido Finance is a decentralized liquid staking platform supporting multiple sidechains and blockchain networks. Staking is a vital feature in public chains utilizing a proof-of-stake consensus mechanism. It enables users to participate in network security, with validators staking a specific amount of coins to validate networks and earn network rewards.
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