$20M Token Buyback Plan Unveiled by Lido DAO Amid Dramatic LDO Price Decline
Despite Lido maintaining dominance with 23.2% of Ethereum's staked assets, the LDO token has plummeted 95.9% from peak levels and currently holds a market capitalization of $255 million.
The decentralized autonomous organization behind Lido is weighing a one-time $20 million acquisition of its governance token in response to what it describes as price dislocation, which has reached "historically depressed levels" when measured against Ether, the DAO states.
Submitted on Friday, the plan requests authorization to exchange 10,000 Lido Staked Ether (stETH) tokens, presently valued at $20 million from the treasury reserves, for Lido DAO (LDO), with the rationale being that LDO is trading below its true value.
"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."
A buyback program of this magnitude has the potential to elevate the token's price, which has experienced approximately a 96% decline from its peak value. Last November, a member of Lido DAO introduced the concept of an automated repurchase system for LDO designed to enhance the token's valuation. That suggestion, however, remains unexecuted.
Lido DAO highlighted that LDO is currently exchanging at a significant markdown compared to Ether (ETH) at a ratio of 0.00016, approximately 63% beneath its median over the past two years.
This situation persists even though the protocol maintains leadership in the Ethereum liquid staking sector, controlling a 23.2% portion of staked Ether, as shown by data from Dune Analytics. The protocol's market share has previously been identified as a potential centralization concern for the network.
LDO is presently valued at $0.30, representing a 95.9% decrease from its $7.30 peak reached in August 2021, based on CoinGecko data. With a $255 million market cap, LDO ranks as the 141st largest token by market value as of this writing.
"That dislocation is not justified by a proportional deterioration in protocol performance," Lido DAO said.
Lido DAO proposes buying stETH in batches
Lido DAO has recommended acquiring up to 10,000 stETH through smaller increments of 1,000 to purchase LDO.
According to Lido DAO, the organization would utilize limit orders or implement a dollar-cost averaging approach to mitigate market volatility.
Nevertheless, each increment would require authorization and could be halted by tokenholders.
Following each increment, outcomes would also require documentation before moving forward with additional execution.
The buyback proposal emerges as Lido's revenue decreased 23% to 40.5 million in 2025, primarily driven by staking fees dropping 23% to $37.4 million.
Lido DAO maintained the protocol's core fundamentals remain robust, highlighting that rewards fell only 20% during the wider market downturn, operating costs improved 13% in 2025 versus 2024 and Lido's take rate increased from 5% to above 6.1%, strengthening fee capture.
Take rate refers to the percentage of staked ETH rewards the protocol keeps as fees.