Lido’s decentralized autonomous group is contemplating a one-off $20 million buyback of its governance token to deal with so-called value 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, presently 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 probably the most vital dislocations between LDO’s market value and its underlying protocol fundamentals within the token’s historical past.”
A token buyback of this dimension may 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 value. Nonetheless, that proposal hasn’t been carried out.
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% beneath 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 presently buying and selling at $0.30, down 95.9% from its $7.30 excessive set in August 2021, in response to CoinGecko knowledge. LDO’s $255 million market cap makes it the 141st largest token by worth on the time of writing.
“That dislocation will not be justified by a proportional deterioration in protocol efficiency,” Lido DAO mentioned.
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 mentioned it might use restrict orders or undertake a dollar-cost averaging technique to keep away from market volatility.
Nonetheless, every batch would want 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 on account of 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 price rose from 5% to greater than 6.1%, enhancing price seize.
Take price refers back to the proportion of staked ETH rewards the protocol retains as charges.
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