The team behind the Lido on Solana project is struggling to meet its initial objectives and is looking to the community to fund the project with $1.5 million for growth and development.
However, its staking solution on the Solana network could cease if the project does not get financial assistance.
A proposal by Yuri Mediakov of P2P — the company managing Lido on Solana — suggested two different scenarios to the Lido DAO community, with votes either determining the continued operation of Lido on Solana or the sunsetting of the project.
One of the suggested scenarios requires the Lido DAO community to inject $1.5 million for the next 12 months into Lido on Finance to sustain and grow the project. The budget includes $200,000 dispensed quarterly for development expenses, $600,000 set aside as a marketing budget annually, and $100,000 annually channeled toward customer support.
Within the 12 months, Mediakov said the P2P team will be able to achieve over 1% of Solana’s staking market share. With this, the team could generate an income of 10,191 SOL annually worth $200,000 at current prices.
The proposal believed that Lido could play a significant role in the growth of the Solana ecosystem, provided the P2P team has the financial backing of the Lido DAO.
“We firmly believe in the potential of the Solana ecosystem and are confident that Lido on Solana can play a pivotal role in its growth. The Solana network has shown remarkable promise in scalability, speed, and innovation, making it a fertile ground for DeFi projects and beyond. We are committed to leveraging these advantages to make Lido on Solana a cornerstone in the ecosystem.”
The second option, meanwhile, proposes winding down the project in the absence of financial aid. According to Mediakov, the ‘sunsetting process’ will start in September 2023 and end in February 2024. If the community opts for this scenario, the proposal seeks support of $20,000 monthly from the Lido DAO to cover technical maintenance for five months starting from Sept. 4, 2023.
The option of Lido on Solana winding down would follow a similar move that saw the winding down of Lido on Kusama and Polkadot. While Lido Finance may be struggling with liquid staking on other networks, the entity has the highest amount of staked Ethereum (ETH), controlling 32.4% of the staking market share, according to data from Dune Analytics.
P2P acquired the Lido on Solana project from Chorus One in March 2022, and since then, has made some product and business developments, which included growing its total value locked (TVL) by 330% from 954,000 SOL in December 2021 to 4.1 million SOL in October 2022.
However, Mediakov stated that an investment of around $700,000 generated a revenue of only $220,000, causing a huge loss of nearly $500,000. Since P2P’s ownership, SOL, Solana’s native token, has dropped more than 92% from its all-time high of nearly $260 in November 2021.
As stated in the proposal, voting will commence in four weeks, with Mediakov stating:
“We are at a critical juncture where the decisions we make today will shape the future of Lido on Solana. We are optimistic about what we can achieve together and look forward to your constructive feedback. We aim to bring this proposal to a Snapshot vote as soon as possible, solidifying our shared commitment to the success and longevity of Lido on Solana.”