Lido Finance has made a significant decision to discontinue its staking services on the Polygon network, following a pivotal vote by its community. The outcome reflects the preferences of token holders, who supported the move to exit operations on this layer-2 blockchain.
The process kicked off on December 16, 2023, as Lido put an immediate stop to stMATIC rewards for current stakeholders. Users who have staked MATIC tokens via Lido’s platform will have up to June 16, 2025, to withdraw their assets through the platform’s frontend interface. After this date, access will only be possible through blockchain explorer tools.
Lido’s journey with Polygon started back in 2021 when Shard Labs introduced the concept of liquid staking. The aim was to provide liquid staking solutions that allowed users to stake their MATIC tokens while retaining liquidity through stMATIC tokens. However, the initiative faced hurdles that hindered its growth. User adoption remained low, and the reward structure was insufficient, leading to disappointing engagement levels.
With the broader shift in the decentralized finance (DeFi) landscape, especially the rise of zkEVM solutions, traditional staking products on Polygon saw a significant drop in demand. This evolution in technology shifted the focus away from liquid staking options, making it increasingly difficult for Lido to justify the resources spent maintaining infrastructure on Polygon.
To facilitate a smooth transition for its users, Lido has structured a withdrawal process. Until June 16, 2025, users can easily access their staked assets via Lido’s Polygon frontend. After this date, while withdrawals remain possible, they will divert to the use of explorer tools, which may require more technical know-how.
Lido has assured users that all funds will stay secure during this transition. The generous withdrawal window is intended to provide ample time for individuals to make informed decisions regarding their assets. This shift reflects Lido’s strategy to concentrate efforts on Ethereum-based services, where it has made significant strides and established a formidable presence.
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The withdrawal process prioritizes user accessibility, ensuring a straightforward experience for reclaiming MATIC tokens. Users only need basic knowledge of blockchain interaction to navigate this process. For those who might miss the withdrawal window, Lido has confirmed that it will still be possible to access funds through explorer tools indefinitely.
The move has garnered support from early advocates of Lido on Polygon. Acknowledging the various challenges encountered, stakeholders had hoped for more favorable market conditions. The vote that led to this decision showcased the commitment of the community towards prioritizing operations in networks where Lido has thrived.
Financial analysis revealed that sustaining operations on Polygon demanded continuous investment, which could be better allocated toward advancing other areas of Lido’s development. Ultimately, the community recognized the importance of streamlining operations to enhance Lido’s overall success.
In summary, this decision marks a new chapter for Lido as it shifts its focus and resources, directing greater energy toward the thriving ecosystem of Ethereum, while ensuring members can smoothly transition their assets during this process.
