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- Lido has terminated its Polygon staking operations due to limited user adoption, resource demands, and a shift in DeFi towards zkEVM solutions.
- Users can withdraw staked MATIC until June 16, 2025, while Polygon’s POL token faces bearish pressure, dropping 1.41% post-announcement.
Lido, the liquid staking protocol, announced the termination of its staking operations on the Polygon network following a strategic decision driven by limited user adoption and evolving market conditions. This move marks a notable pivot as Lido refocuses its resources on Ethereum, a network it considers more aligned with its long-term goals.
The decision was finalized after an overwhelming 99% approval from Lido DAO Token (LDO) holders in a November vote. The vote considered two proposals: transitioning away from Polygon or reevaluating the economics of middleware services. The Lido team revealed the rationale in a blog post dated December 16, emphasizing the scalability challenges and resource-heavy maintenance requirements faced on Polygon.
Challenges of Operating on Polygon
Lido’s difficulties on Polygon stemmed from shifting dynamics within decentralized finance (DeFi). The emergence of zkEVM solutions led to declining demand for liquid staking services on Polygon’s proof-of-stake (PoS) network. In their statement, the Lido team acknowledged that alternative liquid staking protocols within the ecosystem gained traction, making Polygon’s market smaller than anticipated.
Shard Labs, the entity responsible for introducing Lido’s staking service to Polygon in 2021, also weighed in. They highlighted the DeFi sector’s migration towards zkEVM technologies, which diminished the role of Polygon PoS as a critical infrastructure piece.
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,
Staking requests on Lido for Polygon were officially discontinued on December 16. However, users can withdraw their staked MATIC tokens via the Lido interface until June 16, 2025. Withdrawals will be temporarily suspended from January 15 to January 22, 2025. After June 16, Lido will end front-end support, leaving users to rely on browser tools for processing withdrawals.
The gradual wind-down ensures users have adequate time to retrieve their assets. Nevertheless, all staking rewards have already ceased as part of the decommissioning process.
POL Token Price Under Pressure
Following the announcement, POL, the native token of the Polygon network, experienced a 1.41% decline over 24 hours, trading at $0.59. The token’s market capitalization now stands at $4.94 billion, reflecting broader concerns among investors.
The POL/USDT pair exhibits a bearish trend. The token is trading below critical resistance at $0.6104, aligned with the 100-day EMA. Analysts observe significant selling pressure around the $0.6135 mark, coinciding with the 50-day EMA.
The POL token recently tested a support level of $0.5468. Meanwhile, the RSI indicator hovers at 44.84, signaling weak momentum and limited bullish activity. Failure to break the $0.6100 resistance could see POL revisit the $0.5468 threshold, adding to short-term concerns.
Despite its earlier high of $1.2713 in March 2024, POL continues to struggle below the $0.80 resistance, casting doubts over its recovery potential. A sustained push above $0.6100 could pave the way for modest gains, potentially targeting $0.6517 or higher.
