Lido DAO is stepping up to stabilize its governance token, LDO, by proposing a substantial buyback worth $20 million. This plan, submitted on Friday, is currently awaiting approval from tokenholders and involves using 10,000 stETH from the DAO’s treasury.
At the time of writing, LDO is trading at a mere $0.30, reflecting a staggering decline of 95.9% from its all-time high of $7.30 reached in August 2021. This drastic drop has raised concerns about the token’s valuation, particularly as the LDO/ETH trading ratio stands at approximately 0.00016 — about 63% lower than its two-year median. Lido DAO describes this situation as a historic dislocation, signaling that the current token price does not accurately reflect protocol performance.
“That dislocation is not justified by a proportional deterioration in protocol performance,” the DAO emphasized in its proposal. Following the approval of this buyback, Lido plans to execute it in smaller increments of 1,000 stETH at a time, ensuring market stability through limit orders or a dollar-cost averaging approach while requiring separate approvals from tokenholders for each batch.
Market Landscape and Financial Performance
The proposal emerges at a critical juncture in Lido’s financial trajectory. In its recent report, Lido’s revenue for 2025 fell to $40.5 million, showing a 23% decline from the previous year, with staking fees comprising the bulk of this revenue. However, the protocol remains robust in other areas; costs improved by 13% year-over-year, and Lido’s take rate — or the portion of staking rewards retained — increased from 5% to 6.11%. This performance hints at the underlying health of the protocol despite external market pressures.
Moreover, despite the LDO token’s price decline, Lido proudly retains its lead in Ethereum’s liquid staking arena, holding 23.2% of all staked Ether, according to Dune Analytics. This dominant position, although advantageous, has drawn criticism regarding potential centralization risks on the Ethereum network, raising questions about the future implications for both Lido and its stakeholders.
As the buyback proposal moves towards a vote, LDO holders will soon have the pivotal opportunity to influence the decision on whether to initiate this buyback plan, which aims to mitigate the impact of the ongoing market turbulence and strengthen the Lido DAO’s standing in the rapidly evolving cryptocurrency landscape.
