DeFi Platform Lido Finance Weighs Sunsetting Liquid Staking on Polkadot and Kusama Blockchains

Decentralized finance (DeFi) protocol Lido Finance proposed sunsetting liquid staking on the Polkadot and Kusama ecosystems, based on a proposal posted to Lido’s governance discussion board on Tuesday.

Within the proposal, decentralized finance functions developer agency and Lido associate MixBytes introduced it could cease growing and offering technical assist to Lido on Polkadot and Kusama liquid staking protocols as of August 1, 2023.

“The choice was made due to a number of challenges, together with market circumstances, protocol progress, restricted capability and precedence alignment,” Kosta Zherebtsov, chief product officer of MixBytes and the writer of the proposal, stated.

Lido has turn into the DeFi world’s largest protocol with some $9 billion price of digital property locked on the platform. Its progress has come as investor demand for liquid staking has grown steadily.

Staking is a well-liked yield-earning technique within the digital asset area, the place crypto holders can lock up and delegate their tokens corresponding to ether (ETH) to safe proof-of-stake blockchains in alternate for a reward. With liquid staking, buyers can maintain their capital liquid and use their staked tokens as collateral by receiving derivatives.

The proposal could have an effect on some $25 million of property. Knowledge aggregator DefiLlama reveals that buyers have staked $22.3 million price of DOT and $2.34 million of KSM, the native tokens of Polkadot and Kusama, on Lido.

Zherebtsov instructed halting acceptance of recent DOT and KSM for liquid staking by March 15, and robotically unstaking tokens later in June, based on his proposed timeline.

The proposal is in a preliminary dialogue stage but.