SOL Stakers Hit Hard by Unintended Token Lockout

$24 million worth of staked Solana (stSOL) has become unintentionally locked due to a malfunctioning smart contract on the liquid-staking platform Lido. Lido on Solana, which allowed users to stake Solana for a yield, discontinued the service in October 2023. Users could previously unstake their Solana through a user-friendly interface, but this feature was also discontinued, leaving users with the manual option of unstaking via Solana's command line interface (CLI).

Solana Stakers Face Unintended Lockout, Prompting Concerns Among SOL Holders

March 31, 2024

Concerns have surfaced among Solana (SOL) holders who have staked their tokens on the liquid-staking platform Lido, as approximately $24 million worth of tokenized staked SOL (stSOL) has become unintentionally locked due to a malfunctioning smart contract.

Lido on Solana, which allowed users to stake any amount of SOL for a 5% yield, was discontinued in October 2023 due to financial sustainability issues and minimal fees. Users were given the option to unstake their SOL through a user-friendly interface until February, but this feature was subsequently discontinued, leaving users with the manual option of unstaking via Solana's command line interface (CLI).

However, the CLI process has proven to be too complex for some users, leading to numerous complaints on Lido's Discord channel in March. Data from Solscan indicates that approximately $24 million worth of stSOL remains locked across 31,588 holders.

Multiple users have reported encountering difficulties, with some stating that the provided instructions have not resolved their issues.

"Cannot unstake stSOL because none of the 2 solutions provided on the Lido site actually works," user ericxtang posted on the Discord channel on March 15.

"I tried unstaking StSOL about a month ago, but it's still stuck with a validator and never went back to SOL, despite being [burned]," wrote another user, "Number9guy."

Pavel Pavlov, a product manager at P2P Validator, the team formerly associated with Lido on Solana, identified a flaw in the smart contract responsible for the withdrawal function as the root of the problem. Pavlov suspects that the issue may be related to changes in the Rent-Exempt Split logic.

P2P lacks direct control over the situation but has initiated communication with the Lido DAO to explore the potential amendment of the smart contract.

In an update on the Lido Solana Discord page, Pavlov announced that the P2P team had successfully resolved the issue and launched an updated maintainer bot. Users are now able to withdraw stSOL using CLI, with further guidance provided in an official guide.

Lido has yet to issue an official statement on the matter, but it is expected to provide further updates as the situation develops. The incident serves as a reminder of the potential risks associated with liquid staking, where users entrust their assets to third-party platforms for yield optimization.