The Lido decentralized autonomous organization is considering a $20 million buyback of its LDO token to address what it calls “historically depressed levels” compared to Ether. A proposal seeks to swap 10,000 stETH tokens from the treasury for LDO, arguing the token’s market price suffers from a significant dislocation not justified by protocol fundamentals.
The Lido DAO is weighing a one-off $20 million buyback of its LDO governance token, according to a proposal submitted Friday. It aims to swap 10,000 Lido Staked Ether (stETH) tokens for LDO, stating the token is trading at a steep discount relative to Ether.
Lido DAO contends this is not a routine fluctuation. “This is not a routine fluctuation. It represents one of the most significant dislocations between LDO’s market price and its underlying protocol fundamentals in the token’s history,” the proposal stated.
The token has fallen roughly 96% from its August 2021 all-time high of $7.30. Data from CoinGecko shows LDO is currently trading near $0.30 with a $255 million market capitalization.
LDO trades at a ratio of 0.00016 to Ether, roughly 63% below its two-year median. This dislocation occurs despite Lido holding a 23.2% share of the Ethereum liquid staking market, according to Dune Analytics data.
The buyback plan involves purchasing up to 10,000 stETH in smaller batches of 1,000 to acquire LDO. The DAO said it would use limit orders or a dollar-cost averaging strategy to mitigate market volatility.
Each batch would require separate approval from tokenholders and could be halted. Results would need to be reported before further execution could continue.
The proposal emerges as Lido’s annual revenue fell 23% to $40.5 million in 2025. A report indicates this decline was mostly due to staking fees dropping 23% to $37.4 million.
Lido DAO argued the protocol’s fundamentals remain strong, noting costs improved 13% and its take rate on staking rewards rose from 5% to over 6.1%. This comes after a member pitched an automated buyback mechanism in November, which was not implemented.
