Lido’s decentralized autonomous group is contemplating a one-off $20 million buyback of its governance token to deal with so-called worth dislocation, which is at “traditionally depressed ranges” relative to Ether, in response to the DAO.
The proposal, submitted Friday, seeks permission to swap 10,000 Lido Staked Ether (stETH) tokens, at the moment price $20 million from the DAO’s treasury for Lido DAO (LDO), arguing that LDO is undervalued.
“This isn’t a routine fluctuation. It represents some of the important dislocations between LDO’s market worth and its underlying protocol fundamentals within the token’s historical past.”
A token buyback of this dimension might increase the worth of the token, which has fallen roughly 96% from its all-time excessive. In November, a Lido DAO member pitched an automatic buyback mechanism for LDO to enhance the token’s worth. Nevertheless, that proposal hasn’t been applied.
Lido DAO identified that LDO is buying and selling at a steep low cost to Ether (ETH) at a ratio of 0.00016, roughly 63% under its two-year median.
That is regardless of the protocol holding the highest spot of the Ethereum liquid staking market, with a 23.2% share of staked Ether, in response to Dune Analytics knowledge. The protocol’s dominance has even been flagged as a centralization threat to the community in earlier years.
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LDO is at the moment buying and selling at $0.30, down 95.9% from its $7.30 excessive set in August 2021, in accordance to CoinGecko knowledge. LDO’s $255 million market cap makes it the 141st largest token by worth on the time of writing.
“That dislocation just isn’t justified by a proportional deterioration in protocol efficiency,” Lido DAO stated.
Lido DAO proposes shopping for stETH in batches
Lido DAO proposed shopping for as much as 10,000 stETH in smaller batches of 1,000 to purchase LDO.
Lido DAO stated it might use restrict orders or undertake a dollar-cost averaging technique to keep away from market volatility.
Nevertheless, every batch would wish approval and might be stopped by tokenholders.
After every batch, outcomes would additionally have to be reported earlier than persevering with execution additional.
The proposal additionally comes as Lido’s income fell 23% to 40.5 million in 2025, principally resulting from staking charges falling 23% to $37.4 million.
Lido DAO argued the protocol’s fundamentals stay sturdy, noting that rewards declined simply 20% amid the broader market pullback, prices improved 13% in 2025 in contrast with 2024 and Lido’s take fee rose from 5% to greater than 6.1%, enhancing price seize.
Take fee refers back to the share of staked ETH rewards the protocol retains as charges.
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