Lido to Terminate Services on Polygon

Lido Finance has announced the winding down of its operations on the Polygon network, citing limited user adoption, evolving DeFi dynamics, and a strategic shift toward its core focus on Ethereum.

In a 16 December blog post, the Lido team confirmed the decision followed extensive discussions within the Lido DAO, a community vote, and overwhelming support from LDO token holders, with 99% favouring the proposal.

The team highlighted challenges on Polygon, including high maintenance demands, insufficient rewards, and the DeFi ecosystem's growing shift toward zkEVM solutions.

The team noted:

“This transition has led to reduced demand for liquid staking solutions on Polygon POS, affecting Lido on Polygon's potential as a foundational DeFi building block.”

They added:

“Additionally, alternative liquid staking solutions have been built within an ecosystem that proved smaller than initially anticipated.”

Shard Labs, which introduced Lido's staking service to Polygon in 2021, noted the declining demand for Polygon PoS staking amid a broader migration to zkEVM.

As of 16 December, new staking requests on Polygon have been halted, though users can still withdraw their staked MATIC via the Lido interface until 16 June 2025.

Staking rewards have been discontinued, and withdrawals will pause temporarily from 15 to 22 January 2024.

After 16 June, front-end support will end, and withdrawals will only be accessible through browser tools.

Lido First Ceased Operations on Solana, Now Polygon

Last year, Lido announced its decision to discontinue operations on the Solana blockchain following a community vote, citing unsustainable financials and low fee structures.

Lido's presence on Solana began on 8 September 2021, but challenges in maintaining profitability ultimately led to the protocol's exit.

Similarly, Aave, one of the leading lending protocols on Polygon, has proposed winding down its operations on the network due to concerns surrounding the risk profile of bridged assets ahead of an upcoming review.