Lido DAO plans to spend 20 million to buy back LDO; strong agreement but hard to save the coin price downturn.

Lido DAO officially proposed on March 28 to exchange 10,000 Lido Staked Ether (stETH) held in its treasury for LDO tokens, with a current market value of approximately $20 million, as a one-time buyback action. The background of the proposal is that LDO is currently priced at $0.30, down 95.9% from its historical high of $7.30 in August 2021.

Buyback Execution Mechanism: Batch Authorization, Token Holders Retain Veto Power Throughout

(Source: Lido DAO)

The Lido DAO proposal adopts a strict batch execution framework rather than making a large purchase in the market all at once:

Batch Size: A total of 10 batches, with each batch executing the exchange of 1,000 stETH (approximately $2 million)

Order Strategy: Utilizing limit orders or dollar-cost averaging (DCA) to reduce market impact

Batch Approval: Each batch transaction must independently receive DAO approval, and token holders can vote to block any batch

Transparency Mechanism: A results report must be submitted after each batch is completed, and the next batch can only be initiated after confirming the targets are met

It is noteworthy that in November last year, a Lido DAO member proposed an automatic buyback mechanism for LDO, but that proposal has yet to be implemented. This proposal takes a more cautious batch authorization approach, indicating the DAO’s attitude toward promoting the token buyback issue is becoming pragmatic, but the execution timetable still depends on the results of subsequent governance votes.

LDO Price Performance: Protocol Leadership Not Reflected in Valuation

According to CoinGecko data, LDO currently has a market capitalization of approximately $255 million, ranking 141st in the cryptocurrency market. Meanwhile, Lido, based on Dune Analytics data, still holds the top position in the Ethereum liquidity staking market with a 23.2% share of staked ETH.

This “strong protocol performance, weak token pricing” structural divergence is the core argument for Lido DAO’s proposed buyback. The current exchange rate of LDO relative to ETH is 0.00016, at 37% of the median level over the past two years, which the DAO believes cannot be explained by normal market fluctuations.

However, Lido’s 23.2% share of the staking market has also been seen by Ethereum ecosystem researchers as a potential risk of network centralization, and this long-term controversy may continue to exert structural downward pressure on LDO’s valuation.

Protocol Financial Overview: Revenue Under Pressure but Cost Control Improving

Lido DAO anticipates that total revenue will decline to $40.5 million in 2025, representing a year-over-year decrease of approximately 23%; staking fee revenue is expected to be around $37.4 million, also down 23%, primarily reflecting the overall downward trend in staking reward rates.

In the face of revenue pressure, the DAO emphasizes that the underlying operational health is improving: operating costs in 2025 are expected to decrease by 13% compared to 2024; during the overall market pullback, protocol rewards only declined by 20%, outperforming the overall market decline; the fee rate has also increased from 5% to over 6.1%, continuously strengthening fee acquisition capabilities. The DAO stated, “This adjustment is not due to a corresponding decline in protocol performance,” asserting that the decline in token price is not linked to the protocol’s fundamentals.

Frequently Asked Questions

Why did Lido DAO choose to propose the LDO buyback plan at this time?

Lido DAO points out that the exchange rate of LDO relative to ETH is approximately 63% lower than the median level over the past two years, reaching historically abnormal levels. The buyback plan aims to correct this discount through proactive buying rather than relying on natural market recovery. The previous automatic buyback proposal from November of last year was not implemented, and this time a more flexible batch authorization method is being pursued.

Can the $20 million buyback scale effectively support the price of LDO?

$20 million is approximately 7.8% of LDO’s current market cap of $255 million. In terms of scale, if executed smoothly, it theoretically has a certain buy-side support effect. However, the ultimate price trend still depends on the overall market environment, the selling dynamics of token holders, and whether each batch buyback can successfully pass the DAO governance vote.

Will Lido’s dominant position in the Ethereum staking market affect LDO’s long-term valuation?

Lido’s 23.2% staking share has long faced criticism regarding “Ethereum network centralization risk.” This controversy may continue to give LDO a certain valuation discount in the market, even if the protocol’s revenue and cost structure continue to improve; concerns about centralization risk are unlikely to be fully alleviated in the short term.