Lido Community Proposes To Terminate Its Project on Polygon
Earlier today, Wu Blockchain announced on X that the Lido community released a proposal to terminate the Lido project on Polygon. According to the post, the current state of Lido on Polygon reveals several concerning issues.
The Lido community released a proposal to terminate the Lido project on Polygon, citing reasons including recent technical issues; uncertainty Polygon roadmap; no other staking providers on Polygon; it is recommended to focus on a native ETH liquid staking provider.…
— Wu Blockchain (@WuBlockchain) October 19, 2023
Despite Lido’s Total Value Locked (TVL) of approximately $86 million on Polygon, the annual revenue for Lido DAO is just $116,863. Furthermore, Lido awarded significant amounts of LDO tokens to Shard Labs as compensation, raising questions about the expensive compensation structure.
Additionally, a recent technical upgrade introduced a withdrawal bug, posing a brand risk to the protocol. The uncertainty surrounding Polygon’s roadmap, competition struggles, and the lack of interest in liquid staking providers on Polygon were also cited as reasons for Lido’s concerns about Polygon.
Wu Blockchain explained that Lido may now look to focus on a native Ethereum (ETH) staking provider to mitigate some of the risks associated with Polygon. Shard Labs has cut their already conservative incentives on Polygon by 75%, indicating the stasis of a blockchain that Polygon has already become.
LDO / Tether US 1D (Source: TradingView)
However, it does not seem like many traders are happy with the decision to sunset Lido on Polygon as LDO’s price has decreased by more than 3% in the past 24 hours of trading. CoinMarketCap indicated that, at press time, LDO was trading at $1.48, which was a new daily low price for the altcoin.
LDO’s 24-hour trading volume, however, jumped by just over 6% throughout the past day, and as a result, increased to $41,281,350. The losses suffered by LDO in the past day also ended up pushing its weekly performance into the red to -2.39%.
After its price slip, LDO’s market cap stood at $1,320,063,595, which ranked it as the 34th largest cryptocurrency in terms of market capitalization. This placed it right on the heels of Internet Computer (ICP) in the 33rd spot with its own market cap of $1,350,477,095.
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