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Lido is Leaving the Polygon Ecosystem
Polygon's DeFi ecosystem is facing major headwinds.
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Lido has decided to leave the Polygon ecosystem due to “significant challenges in achieving its intended impact.” Lido leaving Polygon is coming from a community-approved vote that took place in November.
What’s the Scoop?
- Lido's Reasoning: Lido listed multiple reasons for leaving the Polygon ecosystem which included: limited user adoption, insufficient rewards, resource-intensive maintenance requirements, and evolving ecosystem dynamics.
- Leaving Ecosystems: Lido leaving an ecosystem is nothing new. Last year, Lido left Solana due to costs outweighing revenue generated from the chain.
- User Funds: Users will be able to withdraw their funds from Lido until June 16th, 2025. After that date, users will be able to withdraw their funds through explorer tools.
- Interesting Timing: While there are multiple factors that contributed to Lido leaving Polygon, the timing is interesting. Yesterday, Aave has put up a proposal to leave Polygon as well.
Bankless Take:
Lido leaving the Polygon ecosystem seems like a wake-up call for those active in the community. Multiple L2s have done very well during this bull cycle but Polygon has struggled to capture the growing crypto community and find their niche among the many L2s. Aave is threatening to leave due to a recent Polygon proposal. If that Polygon proposal were to go through, Aave ceasing operations in the ecosystem would be a huge loss.