Lido DAO Mulls $20M Token Price to Increase LDO Returns
Lido, a decentralized autonomous organization, is considering a one-time $20 million purchase of its management token in order to offset the price collapse at “historically depressed levels” relative to Ether.
The proposal, presented Friday, seeks approval from the DAO treasury to exchange 10,000 Lido Staked Ether (stETH) tokens, currently worth $20 million, for Lido DAO (LDO).
“This is no ordinary exchange, it represents one of the most significant differences between the market value of LDO and the underlying protocol foundations in the token's history.”
A token buyback of this magnitude could impact the token's price, which has fallen 96 percent from its all-time high. In November, a member of Lido DAO developed an auto-buying mechanism for LDO to improve the token price. However, that idea was not implemented.
Lido DAO is trading at a steep discount to Ether (ETH) at a ratio of 0.00016, which is 63% below its two-year average.
Although the protocol holds the top spot in the Ethereum liquid staking market with a 23.2% share of Ether, according to data from Dune Analytics. Protocol dominance has been pointed out over the years as a centralizing risk to the network.
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According to CoinGecko data, LDO is currently trading at $0.30, down 95.9% from its August 2021 high of $7.30. LDO's market cap of $255 million makes it the 141st largest ticker at the time of writing.
“This displacement is not justified by a proportional degradation in protocol performance,” Lido Dao said.
Lido DAO proposes to buy stETH as a group
Lido DAO proposes to buy LDO up to 10,000 stETH in small batches of 1,000.
Lido DAO says it uses limit orders or follows a dollar cost averaging strategy to avoid market volatility.
However, each batch needs approval and can be stopped by token holders.
After each group, the results should be reported before proceeding with further execution.
The proposal comes as Lido's revenue is expected to drop 23 percent to $40.5 million in 2025, largely due to a 23 percent drop in stock payments to $37.4 million.
Lido DAO stated that the fundamentals of the protocol remain strong, the reward has decreased by only 20% in the midst of market returns, the cost has improved by 13% in 2025, and compared to 2024, Lido's acceptance rate has increased from 5% to 6.1%, which will increase the payment.
Tiering refers to the percentage of ETH rewards that the protocol reserves as payouts.
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