Lido Finance LDO Falls as Partner Ends Polkadot Staking Support

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The Lido project’s LDO token has plummeted over the past week, down by 18%. Lido Finance is planning to stop the support of liquid staking on Polkadot and Kusama.

LDO, the governance token of the popular Ethereum staking solution Lido Finance, has experienced a sharp drop. The token is down by over 6% in the past 24 hours and about 18% in the past week. The token is currently priced at $2.37.

LDO Chart by TradingView

Most tokens in the market are down over the past 24 hours and have taken double-digit drops over the past week. The market is currently experiencing a downturn and is wrangling with its resistance and support levels.

SEC Notice Might Be Another Reason

One possible contributor to the sharp drop in the LDO token price is the fact that a partner firm is ending liquid staking on Polkadot and Kusama. Lido’s partner development firm for Polkadot and Kusama staking, MixBytes, has announced that it would stop supporting the network.

There is no consensus on why LDO, in particular, has tanked so much over the past week. However, one notable rumor that is floating around is the fact that Lido and a few other crypto projects have received a Wells Notice from the United States Securities and Exchange Commission (SEC).

Bankless’ David Hoffman first revealed this news, though it is important to note he later retracted it. This development has not yet had official confirmation.

MixBytes To Stop Supporting Polkadot

The decision for MixBytes to drop Polkadot and Kusama support was announced a few days ago. The team will no longer develop and technically support Lido on the two protocols from Aug. 1, 2023.

Users can no longer make staking deposits into Lido for the Polkadot and Kusama protocols from March 15. The official post noted that an alternative host for the UI will be set up by the community from Aug. 1.

MixBytes is also looking to garner $20,000 per month to support our technical maintenance efforts for the five months.

Lido To Allow Ethereum Withdrawals

The drop in price is still somewhat surprising, as liquid staking has become extremely popular over the past year. It has replaced DeFi lending as the second-largest sector in the DeFi space. Lido is the most popular of these liquid staking protocols.

LDO TVL: Dune
LDO TVL: Dune

In late February, it saw a record inflow for staking of 150,000 ETH. There were some reports that the assets belonged to TRON founder Justin Sun.

Lido is also all set to allow Ethereum withdrawals soon. Of course, this feature will only become available after Ethereum releases its Shanghai upgrade.

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Disclaimer

BeInCrypto has reached out to company or individual involved in the story to get an official statement about the recent developments, but it has yet to hear back.



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