DeFi Platform Lido Votes Against Supporting New Terra Blockchain

Don't miss CoinDesk's Consensus 2022, the must-attend crypto & blockchain festival experience of the year in Austin, TX this June 9-12.

Decentralized finance (DeFi) project Lido Finance voted overwhelmingly against supporting the new Terra blockchain, with less than 5.5% voting in favor. The revival plan was approved by Terra’s network validators today.

• Lido, a liquid staking protocol, is the fourth-largest DeFi platform, with $8.43 billion in total valued locked according to DeFi Llama.

• Kwon's proposal is to carry out a hard fork of the blockchain, with the original chain continuing as Terra Classic. The new one will focus on attracting DeFi applications.

• A hard fork involves splitting the chain on which a protocol runs into two, with the new branch using a different set of rules. It represents an opportunity for Terra to perform a reset on its failed project, which saw native stablecoin UST and sister token LUNA collapse to near zero earlier this month.

• However, initial reaction to Kwon's plans was largely negative with some 92% of 6,220 Terra community members voting against the change.

• Goldman Sachs flagged Lido as illustrative of how decentralized finance can amplify systemic risk in a note released Friday, citing the protocol's links to Terra's Anchor protocol.