Key Highlights
- A $20 million buyback proposal for LDO tokens has been submitted to Lido DAO, utilizing 10,000 stETH from protocol reserves.
- The governance token currently trades at $0.30, representing a 95.9% decline from its August 2021 peak of $7.30.
- According to the DAO, the LDO/ETH price ratio sits approximately 63% beneath its two-year median, marking a historic valuation gap.
- Implementation would occur through incremental purchases of 1,000 stETH batches, with each requiring individual governance approval.
- Protocol revenue declined 23% to $40.5 million in 2025, while Lido maintains its position as Ethereum’s leading liquid staking provider with 23.2% market dominance.
Lido DAO has introduced a governance initiative seeking authorization to repurchase $20 million of its native LDO token. The measure was presented on Friday and has entered the community voting phase.
The initiative requests authorization to deploy 10,000 stETH — valued at approximately $20 million at current market rates — from the organization’s treasury reserves for open-market LDO acquisitions.
According to the DAO’s analysis, LDO is experiencing one of its most severe historical valuation dislocations relative to Ethereum. The current LDO/ETH trading ratio stands at 0.00016, positioned approximately 63% below the two-year median benchmark.
Current market data from CoinGecko shows LDO trading at $0.30, marking a 95.9% depreciation from its peak valuation of $7.30 recorded during August 2021.
With a current market capitalization hovering around $255 million, the token ranks as the 141st largest digital asset by market value.
“That dislocation is not justified by a proportional deterioration in protocol performance,” Lido DAO stated in the governance proposal.
Buyback Execution Framework
The repurchase program would not be executed as a single transaction. Instead, the DAO has outlined a phased approach involving incremental batches of 1,000 stETH each, accumulating to the proposed 10,000 stETH maximum.
Each individual batch would necessitate distinct governance approval from LDO tokenholders prior to execution. The organization has indicated plans to employ limit orders or dollar-cost averaging tactics to minimize market disruption and mitigate volatility exposure.
Following completion of each purchase tranche, performance metrics must be disclosed to the community before authorization can be sought for subsequent batches.
A comparable automated repurchase framework was introduced to the community in November 2024 but never progressed to implementation.
Revenue Contraction Amid Market Leadership
Lido’s annual revenue for 2025 totaled $40.5 million, representing a 23% year-over-year contraction. Staking fee income, which constitutes the primary revenue stream, decreased 23% to $37.4 million.
While the DAO recognizes the revenue decline, it highlights alternative performance indicators suggesting operational resilience. Operating costs improved by 13% compared to the prior year, and Lido’s fee capture rate — the percentage of staking yields retained by the protocol — increased from 5% to 6.11%.
Notwithstanding the token’s significant price deterioration, Lido retains its commanding position within Ethereum’s liquid staking ecosystem. Data from Dune Analytics indicates the protocol controls 23.2% of all staked Ether on the network.
This market concentration has previously attracted criticism regarding potential centralization vulnerabilities within the Ethereum infrastructure.
The governance proposal has now advanced to a tokenholder vote, where LDO holders will determine whether to greenlight the initial 1,000 stETH purchase batch.
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