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 accordance to the DAO.
The proposal, submitted Friday, seeks permission to swap 10,000 Lido Staked Ether (stETH) tokens, at the moment 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 one of the crucial vital dislocations between LDO’s market value and its underlying protocol fundamentals within the token’s historical past.”
A token buyback of this dimension might enhance 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% under 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 accordance to Dune Analytics data. The protocol’s dominance has even been flagged as a centralization risk to the community in earlier years.
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LDO is at the moment buying and selling at $0.30, down 95.9% from its $7.30 excessive set in August 2021, according to CoinGecko knowledge. LDO’s $255 million market cap makes it the 141st largest token by worth on the time of writing.
“That dislocation shouldn’t be justified by a proportional deterioration in protocol efficiency,” Lido DAO stated.
Lido DAO proposes shopping for stETH in batches
Lido DAO proposed shopping for up to 10,000 stETH in smaller batches of 1,000 to purchase LDO.
Lido DAO stated it could use restrict orders or undertake a dollar-cost averaging technique to keep away from market volatility.
Nonetheless, every batch would want approval and could possibly be stopped by tokenholders.
After every batch, outcomes would additionally want 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, largely due to staking charges falling 23% to $37.4 million.
Lido DAO argued the protocol’s fundamentals stay robust, noting that rewards declined simply 20% amid the broader market pullback, prices improved 13% in 2025 in contrast with 2024 and Lido’s take fee rose from 5% to greater than 6.1%, enhancing charge seize.
Take fee refers to the share of staked ETH rewards the protocol retains as charges.
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