Lido DAO proposes $20M LDO buyback to reverse historic price fall

Lido’s decentralized autonomous enactment is considering a one-off $20 cardinal buyback of its governance token to code alleged terms dislocation, which is astatine “historically depressed levels” comparative to Ether, according to the DAO. 

The proposal, submitted Friday, seeks support to swap 10,000 Lido Staked Ether (stETH) tokens, presently worthy $20 cardinal from the DAO’s treasury for Lido DAO (LDO), arguing that LDO is undervalued.

“This is not a regular fluctuation. It represents 1 of the astir important dislocations betwixt LDO’s marketplace terms and its underlying protocol fundamentals successful the token’s history.”

A token buyback of this size could boost the terms of the token, which has fallen astir 96% from its all-time high. In November, a Lido DAO subordinate pitched an automated buyback mechanics for LDO to amended the token’s price. However, that connection hasn’t been implemented.

LDO’s alteration successful terms comparative to ETH since 2024. Source: Lido DAO

Lido DAO pointed retired that LDO is trading astatine a steep discount to Ether (ETH) astatine a ratio of 0.00016, astir 63% beneath its two-year median.

This is contempt the protocol holding the apical spot of the Ethereum liquid staking market, with a 23.2% stock of staked Ether, according to Dune Analytics data. The protocol’s dominance has adjacent been flagged arsenic a centralization risk to the web successful erstwhile years.

Share of Ethereum web validators. Source: Dune Analytics

Related: Ethereum builders suggest ‘economic zone’ to tackle L2 fragmentation 

LDO is presently trading astatine $0.30, down 95.9% from its $7.30 precocious acceptable successful August 2021, according to CoinGecko data. LDO’s $255 cardinal marketplace headdress makes it the 141st largest token by worth astatine the clip of writing.

“That dislocation is not justified by a proportional deterioration successful protocol performance,” Lido DAO said. 

Lido DAO proposes buying stETH successful batches

Lido DAO projected buying up to 10,000 stETH successful smaller batches of 1,000 to bargain LDO. 

Lido DAO said it would usage bounds orders oregon follow a dollar-cost averaging strategy to debar marketplace volatility. 

However, each batch would request support and could beryllium stopped by tokenholders.

After each batch, results would besides request to beryllium reported earlier continuing execution further.

The connection besides comes arsenic Lido’s gross fell 23% to 40.5 cardinal successful 2025, mostly owed to staking fees falling 23% to $37.4 million.

Lido DAO argued the protocol’s fundamentals stay strong, noting that rewards declined conscionable 20% amid the broader marketplace pullback, costs improved 13% successful 2025 compared with 2024 and Lido’s instrumentality complaint roseate from 5% to much than 6.1%, enhancing interest capture.

Take complaint refers to the percent of staked ETH rewards the protocol keeps arsenic fees.

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