Key Highlights
- A $20 million one-time buyback of LDO governance tokens has been proposed by Lido DAO, utilizing 10,000 stETH from treasury reserves.
- The LDO token currently trades at $0.30, representing a 95.9% decline from its peak price of $7.30 reached in August 2021.
- The current LDO/ETH price ratio sits approximately 63% beneath its two-year median level, representing what the DAO describes as unprecedented market dislocation.
- Implementation would occur through incremental purchases of 1,000 stETH batches, with each tranche requiring individual tokenholder authorization.
- Protocol revenue for 2025 declined 23% to $40.5 million, despite Lido maintaining its dominant 23.2% share of staked Ethereum.
Lido DAO has introduced a governance proposal calling for a $20 million repurchase program of its native LDO governance token. The initiative, submitted last Friday, is currently undergoing a community vote among tokenholders.
The initiative seeks authorization to allocate 10,000 stETH from the organization’s treasury — presently valued at approximately $20 million — for open market purchases of LDO tokens.
According to the DAO, LDO is experiencing one of its most severe historical undervaluations relative to Ethereum. The current LDO/ETH exchange rate stands at 0.00016, representing a discount of roughly 63% compared to its two-year median value.
According to CoinGecko data, LDO is currently valued at $0.30 per token. This represents a dramatic 95.9% decrease from its historical peak of $7.30, established in August 2021.
With a current market capitalization hovering around $255 million, the token ranks as the 141st largest cryptocurrency by total market value.
“That dislocation is not justified by a proportional deterioration in protocol performance,” Lido DAO stated in the proposal documentation.
Execution Strategy for the Buyback Program
The repurchase program has been structured to avoid immediate, large-scale market impact. Rather than executing a single large transaction, the DAO intends to implement the buyback through incremental purchases of 1,000 stETH each, ultimately totaling 10,000 stETH.
Each individual batch would necessitate separate tokenholder approval prior to execution. Additionally, the DAO indicated plans to employ limit order strategies or dollar-cost averaging techniques to minimize exposure to price volatility.
Following the completion of each tranche, comprehensive results must be documented and shared with the community before the subsequent batch can commence.
A comparable automated repurchase framework was introduced in November 2024 but ultimately was not put into action.
Financial Performance and Market Position
Lido’s total revenue for 2025 reached $40.5 million, marking a 23% decrease compared to the previous year. Revenue from staking fees, which constitutes the protocol’s primary income source, dropped 23% to $37.4 million.
While acknowledging the revenue contraction, the DAO highlights several metrics that it believes demonstrate continued operational resilience. Operating costs improved by 13% year-over-year, while Lido’s take rate — representing the protocol’s portion of staking rewards — increased from 5% to 6.11%.
Despite the substantial decline in token valuation, Lido continues to maintain its leading position within Ethereum’s liquid staking ecosystem. Data from Dune Analytics shows the protocol controls 23.2% of all staked Ether on the network.
This market dominance has previously attracted criticism from community members concerned about potential centralization threats to Ethereum’s decentralized infrastructure.
The proposal has now advanced to the tokenholder voting phase, where LDO holders will determine whether to authorize the initial 1,000 stETH buyback tranche.
