Lido Ends Support for Polygon Liquid Staking Protocol After Community Approval – CryptoMode

Lido, the largest liquid staking protocol on Ethereum (ETH), is ending liquid staking operations on the Polygon network due to low user adoption, challenges in maintaining operations, and a strategic decision to concentrate on Ethereum. 

The decision was made after extensive community discussions, a formal proposal, and a decisive vote where an overwhelming majority —99% of Lido DAO token (LDO) holders— supported the move.

The team detailed its reasoning in a December 16 blog post, explaining that maintaining operations on Polygon had become “resource-intensive” while delivering diminishing returns. 

Lido Discontinues Polygon Staking Pool: A Change in Direction

As of December 16, Lido has disabled new staking requests for MATIC tokens. Users will still have the option to withdraw staked MATIC using the protocol’s interface until June 16, 2025. 

The rewards for staked tokens have already been discontinued, and the protocol plans to temporarily suspend all withdrawals between January 15 and January 22, 2024.By June 16, 2025, Lido will end front-end support for withdrawals, requiring users to use browser tools to access their funds.

All of this comes as interest in Polygon’s PoS network has decreased. In contrast, zero-knowledge Ethereum Virtual Machine (zkEVM) solutions are gaining traction in DeFi. 

While complex technologies, zkEVMs These technologies are gaining attention for their ability to enhance scalability and privacy on Ethereum. They also address key network limitations, including interoperability and cross-chain operations, attracting developers and protocols seeking more robust solutions.

The decision to wind down on Polygon was expected. Lido did the same for the Solana blockchain last year when the protocol ceased operations after a community vote citing concerns over financial sustainability and low fees. 

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Lido is not the only protocol reevaluating its presence on Polygon. Aave, a leading lending platform, recently proposed halting operations on the network. 

Aave’s proposal, initiated by Aave Chain founder Marc Zeller on December 13, was triggered by concerns about the risk profile of bridged assets and Polygon’s governance plan to deploy over $1 billion in stablecoin reserves for yield farming on other protocols.