Lido Cuts 15% of Workforce to Boost Long-Term Sustainability

Lido, the largest liquid staking protocol on Ethereum, has announced a 15% reduction in its contributor base, a move its co-founder has described as essential for long-term sustainability. The layoffs span across the Lido DAO ecosystem, including Lido Labs and related service providers. The decision, though not uncommon in the crypto industry, has drawn attention given the broader market’s tentative recovery after a difficult two-year period[1].

Vasiliy Shapovalov, Lido’s co-founder, emphasized that the cuts were motivated by cost considerations rather than performance issues. “We want to direct more resources toward high-impact areas aligned with the long-term interests of LDO holders,” he stated in a message shared via community channels. This strategic shift follows the recent launch of Lido v3, a modular upgrade designed to enhance flexibility and decentralization. The update introduced "stVaults," which allow users to customize their staking exposure across various networks and validator sets[1].

Despite these innovations, Lido’s leadership acknowledges that the existing structure requires refinement. The protocol currently holds over $31 billion in total value locked (TVL), a significant portion of Ethereum staking. However, the team faces increasing pressures from competitors, regulatory scrutiny, and tokenholders who demand streamlined governance and clearer financial oversight[1].

Lido’s decentralized model complicates traditional workforce assessments, as most contributors operate independently or through affiliated service providers. Those affected by the layoffs were reportedly offered support in offboarding and referrals, though severance details were not disclosed. The DAO has committed to reallocating resources toward protocol development, validator decentralization, and foundational research[1].

The Lido DAO’s treasury remains robust, with annualized staking rewards nearing $90 million, based on data from DeFiLlama. Yet, critics argue that the protocol’s expansion has introduced governance complexities, and the layoffs are seen by some as a necessary correction to address these challenges. Earlier this year, a minor incident involving validator partner Chorus One underscored existing governance tensions[1].

The move reflects a broader trend in the crypto space, where firms are reevaluating operational structures to align with evolving market dynamics and stakeholder expectations. While the decision has sparked mixed reactions, it signals Lido’s commitment to adapting to a maturing ecosystem.

Source: [1] Lido Trims 15% Of Staff In Bid To Sharpen Focus Amid ... (https://financefeeds.com/lido-trims-15-of-staff-in-bid-to-sharpen-focus-amid-crypto-recovery/)