The Solana project’s Lido faces potential closure due to financial challenges. These issues emerged post-completion of operations on Kusama and Polkadot.
Yuri Mediakov, who represents P2P, the organization responsible for managing Lido on Solana, has proposed to the Lido DAO community. This proposal outlines two potential scenarios. It’s up to the community members to vote on Lido Solana’s future: continue or cease operations.
In one proposed scenario, the Lido DAO community plans to invest $1.5 million into Lido on Finance over a year. This funding will support and expand the project in various ways. The allocated budget entails providing $200,000 quarterly for development expenses.
Additionally, $600,000 has been earmarked for marketing initiatives promoting the project’s growth. Furthermore, an annual grant of $100,000 is designated to enhance customer support services.
Furthermore, Mediakov anticipates that the P2P team could seize 1% of Solana’s market share within 12 months. This achievement could result in an annual income of 10,191 SOL, equivalently amounts to $200,000 based on the current prices.
The proposal strongly believes in Lido’s potential to make a significant contribution to the growth of the Solana ecosystem. However, this outcome relies on obtaining financial support from the Lido DAO.
The potential of the Solana ecosystem is deeply believed in, and it is strongly believed that Lido on Solana will play a significant role in its growth. The scalability, speed, and innovation showcased by the Solana network have been remarkable, establishing it as an ideal platform for DeFi projects and beyond. With utmost dedication, we aim to leverage these advantages to establish Lido on Solana as a cornerstone within this thriving ecosystem.
Lido’s Cross-Blockchain Liquid Staking Challenges
The voting process, as outlined in the proposal, is scheduled to begin in four weeks. Mediakov emphasized the critical nature of these decisions by stating:
At this critical crossroads, our decisions hold the power to shape the future of Lido on Solana. With unwavering optimism and anticipation, we greatly welcome your constructive feedback. We aim to swiftly present this proposal for a Snapshot vote, cementing our collective dedication to ensuring the enduring triumph of Lido on Solana.
Moreover, The potential winding down of Lido on Solana mirrors a similar decision taken for Lido on Kusama and Polkadot. Despite facing challenges in liquid staking on other networks, Lido Finance remains the largest player in the staking market. It has control over 32.4% of the staked Ethereum (ETH), as per data from Dune Analytics.
In March 2022, P2P acquired the Lido on Solana project from Chorus One. Since then, they’ve made changes, resulting in a remarkable 330% growth in Total Value Locked (TVL) through product and business improvements. The TVL increased from 954,000 SOL in December 2021 to 4.1 million by October 2022.
Mediakov’s disclosure revealed a $700,000 investment had led to a substantial $500,000 loss, exposing a financial setback. The generated revenue stood at only $220,000. Alongside P2P’s rise, Solana’s native token SOL plummeted over 92% from its November 2021 peak, reaching just $20.