Lido faces growth difficulties: the future of the ETH staking market is uncertain

Lido has recently gone through a series of changes, first shutting down the Solana staking service, and now the community is proposing to shut down the Polygon service. The main reason is that the community believes that the return rate of these two services is too low, no longer cost-effective, and brings unnecessary complexity. Some people in the community have proposed that Lido should focus on becoming the native staking service provider of Ethereum.

Lido’s development prospects are becoming less clear. Although Ethereum staking services are its largest source of income, it faces some challenges. Some key figures, such as Ethereum co-founder Vitalik Buterin and Ethereum core developer Tim Beiko, have expressed their opposition to Lido’s further growth. This is because the 33% staking rate has become the consensus red line of the entire industry, and exceeding this ratio will cause security and political issues.

Lido is currently in a very difficult situation because its staking rate is close to 33% and cannot continue to grow. At the same time, the interest rate of ETH staking services has dropped to 3%, there are a large number of validators, and the amount of new ETH entering is insufficient, so there is no sufficient profit.

Lido's future development path becomes less clear, unless the following two possibilities occur:

1. The ETH spot ETF is approved, attracting a large amount of funds into ETH staking, but this will also reduce the staking interest rate again.

2. Ethereum’s on-chain transactions are booming again, and Ethereum maintains its dominant position, thereby driving the growth of validators.

Lido needs to face these challenges and find strategies for continued growth.