Lido Finance (LDO) had announced its withdrawal from the Solana network. Following this, a new idea emerged among community members. A proposal was made to abandon the liquid staking protocol on the leading Layer-2 blockchain, Polygon (MATIC).
Is Matic Coming to an End After Solana?
The proposer, Kentie, emphasized multiple points about the proposal. According to the data presented by Kentie, the total value locked (TVL) on Polygon is at $86 million. Additionally, the network generates an annual fee of $166,863 for Lido DAO. Kentie highlighted the significant LDO token incentives spent over a year and expressed the opinion that the return on investment (ROI) is inadequate.
Kentie also referred to past bad experiences. Reminding that the protocol halted withdrawals on Polygon for 25 days, Kentie stated that Lido carries a reputational risk and added:
Although we were lucky to not have any FUD during this period, it seems to pose a reputational risk for a protocol with $15 billion worth of assets.
In addition, Kentie shared the uncertainties in Polygon’s roadmap and stated:
In short, I propose sinking Lido on Polygon to be a local ETH liquid staking provider and avoid taking risks from smaller pockets of TVL.
Matic Price and Future
According to data obtained from 21milyon.com, at the time of writing, MATIC coin was trading at $0.5232. The price movements observed on the daily chart indicated that spot market traders had been short-selling the cryptocurrency since October 11. Furthermore, the True Strength Index (TSI) was also confirming this trend.
The data obtained from the indicator showed that the TSI line touched the lower zone of the signal line on October 11 and has remained below the signal line since then.
The negative momentum in MATIC has led to significant sell-offs in the past ten days. The Relative Strength Index (RSI), an important indicator for cryptocurrencies, was showing 48.04 at the time of writing. The Money Flow Index (MFI) was close to the oversold zone at 34.90.
Similarly, at the time of writing, MATIC’s Chaikin Money Flow (CMF) indicator was showing a negative value of -0.19, indicating a downward trend. The decrease in the CMF indicator suggests a liquidity outflow and a decline in the market.
