Lido, the largest liquid staking protocol, is winding down its staking services on the Polygon PoS chain due to limited adoption and ecosystem challenges. Following a community-approved vote in November, the phase-out began on Monday, with users able to withdraw funds until June 16, 2025. After this deadline, withdrawals will only be possible through explorer tools.
Challenges Behind the Decision
The decision stems from several factors, including limited user adoption, low staking rewards, and high resource maintenance costs. Lido also noted evolving ecosystem dynamics and a shift in token holders’ focus toward Ethereum staking. This mirrors Lido's 2023 decision to sunset Solana staking services after losses outweighed revenue.Focus on Ethereum and New Initiatives
Lido is redirecting resources toward Ethereum staking, including its "community staking module," aimed at making Ethereum solo staking more inclusive. As the top liquid staking protocol for ETH, Lido currently ranks as the largest DeFi protocol by total value locked (TVL), with approximately $39.3 billion.Polygon Ecosystem Faces Shifts
Lido’s exit comes as Polygon’s ecosystem undergoes transformations. Aave, the largest dApp on Polygon by TVL, is also considering discontinuing lending services on the chain. Polygon itself is proposing the use of bridged stablecoins for yield generation, reflecting broader strategic shifts. Lido’s move signals a continued focus on Ethereum, while the Polygon PoS chain faces a pivotal moment in retaining developer and user interest amid these ecosystem changes.
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