Lido Finance, the leading liquid staking protocol, has announced its decision to discontinue staking services on the Polygon network. The move marks a strategic shift as Lido refocuses its efforts on Ethereum-based staking.

Why Lido is Exiting Polygon

Governance and ecosystem challenges

The decision, approved by Lido DAO token holders, follows a proposal from Shard Labs dating back to 2021. Lido cited several reasons for the move:

• Limited user adoption on Polygon’s platform.
• Changes in the decentralized finance (DeFi) ecosystem.
• Polygon’s shift to zkEVM, which has led to a decline in liquid staking activity.

Additionally, Lido DAO has resolved to concentrate its resources on Ethereum, where staking demand and adoption remain robust.

Transition Timeline

Key dates and user guidance

Lido’s sunsetting process begins on December 16, 2024, with the following milestones:

• No new staking: Effective immediately, new staking on Polygon is disabled via the Lido interface.
• Unstaking window: Users are advised to unstake stMATIC by June 16, 2025 to ensure a smooth experience.
• Temporary pause: From January 15 to January 22, 2025, Lido on Polygon operations will pause, and withdrawals will not be available.
• Frontend support ends: After June 16, 2025, staking and withdrawal will only be possible through explorer tools.

Lido’s Market Presence

Dominance in liquid staking

Despite exiting Polygon, Lido remains the largest liquid staking protocol in DeFi, with a total value locked (TVL) of $38.4 billion. For comparison, Rocket Pool and Jito, competitors in the liquid staking space, hold $2.9 billion and $3.1 billion in TVL, respectively.

Impact on Polygon Users

Unstaking and future staking options

The decision will impact Polygon-based stMATIC holders, who are encouraged to unstake their tokens before the June deadline to avoid complications. As Polygon continues its transition to zkEVM, alternative staking solutions may arise, but Lido’s exit underscores the challenges faced by DeFi protocols in evolving ecosystems.

What’s Next for Lido?

Ethereum-focused strategy

Lido’s exit from Polygon aligns with its goal to strengthen its presence in the Ethereum ecosystem, where liquid staking demand remains high. This strategic pivot ensures Lido’s resources are dedicated to its core user base and the most promising staking opportunities in DeFi.