Lido DAO is considering a $20 million buyback of its LDO governance token. The organization calls it a response to “price dislocation.” The proposal would swap 10,000 stETH from the DAO treasury for LDO tokens. Those tokens have plunged 95.9% from their all-time high of $7.30, according to Lido’s official blog.
LDO currently trades around $0.30. Market cap sits at $255 million. Its ratio against ETH is about 63% below its two-year median. The DAO maintains this steep discount doesn’t reflect any fundamental deterioration in the protocol. But Lido’s 2025 revenue fell 23% to $40.5 million. Staking fees dropped 23% to $37.4 million.
Lido wants to minimize market disruption. It proposes executing the buyback in batches of 1,000 stETH each. They’d use limit orders or dollar-cost averaging. Each tranche would require separate approval from tokenholders. The DAO could halt the process at any time. After completing each batch, Lido would report results to the community. Then they’d proceed with the next round. That creates ongoing oversight.
The proposal builds on a previous automated buyback concept floated in November. It was never implemented. Lido argues its fundamentals remain solid. Staking rewards declined only 20%. Operating costs improved 13% year-over-year. The protocol’s take rate increased from 5% to more than 6.1%. That’s the share of staking rewards it keeps as fees. It demonstrates stronger fee capture.
But the buyback arrives amid broader concerns about Lido’s market dominance. The protocol controls approximately 23.2% of all staked ETH. That raises centralization questions. Ethereum advocates have long worried about concentration in any single staking provider. They fear it could pose systemic risks to the network.
The buyback could provide near-term price support for LDO. It’d signal confidence in Lido’s long-term trajectory despite the challenging revenue environment. That’s if tokenholders approve it. But the move is likely to spark debate about capital allocation priorities. Some will ask whether treasury funds might be better deployed to address decentralization concerns. Or protocol development. Community discussions will need to balance the desire for price stability against Ethereum’s foundational commitment to distributed control.
