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, in accordance with a proposal posted to Lido’s governance discussion board on Tuesday.

Within the proposal, decentralized finance (DeFi) purposes developer agency and Lido associate MixBytes introduced it might cease creating and offering technical assist to Lido on Polkadot and Kusama liquid staking protocols as of Aug. 1, 2023.

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

Lido has change into the DeFi world’s largest protocol with some $9 billion price of digital belongings 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 house, the place crypto holders can lock up and delegate their tokens, resembling ether (ETH), to safe proof-of-stake blockchains in trade for a reward. With liquid staking, buyers can preserve their capital liquid and use their staked tokens as collateral by receiving derivatives.

The proposal might have an effect on some $25 million of belongings. Information aggregator DefiLlama exhibits 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 routinely unstaking tokens later in June, in accordance with his proposed timeline.

The proposal is in a preliminary dialogue stage but.