Lido’s decentralized autonomous organization is weighing a one-time $20 million buyback of its governance token, LDO, in response to what it describes as a significant price dislocation relative to Ether. A formal proposal submitted on Friday requests authorization to exchange 10,000 Lido Staked Ether (stETH) tokens from the DAO’s treasury for LDO. The DAO contends that LDO is currently undervalued and that the gap between its price and Ether is not warranted by the protocol’s actual performance.
According to the proposal, LDO is trading at a ratio of 0.00016 relative to ETH, approximately 63% below its two-year median. Data from CoinGecko shows LDO is currently priced at $0.30, representing a decline of roughly 95.9% from its all-time high of $7.30 reached in August 2021. The token’s market capitalization stands at approximately $255 million, placing it 141st among all tokens by value.
The DAO stated that the price weakness is not proportional to any deterioration in the protocol’s underlying fundamentals. Lido holds the leading position in the Ethereum liquid staking market, commanding a 23.2% share of all staked Ether, according to Dune Analytics. That dominant market position has previously drawn scrutiny from observers who flagged it as a potential centralization risk to the broader network.
Under the proposed structure, the buyback would be executed in smaller batches of 1,000 stETH rather than all at once. The DAO says it would use limit orders or a dollar-cost averaging strategy to reduce exposure to market volatility. Critically, each individual batch would require separate approval from tokenholders and could be halted at any point during execution.
Transparency measures are also built into the proposal, with results from each batch required to be reported before the next tranche proceeds. This is not the first time a buyback mechanism has been floated within the organization. In November, a Lido DAO member proposed an automated buyback system for LDO, though that initiative was never implemented.
The proposal arrives against a backdrop of declining revenue for the protocol. Lido’s total revenue fell 23% to $40.5 million in 2025, with staking fees dropping 23% to $37.4 million. Despite this, the DAO highlighted several indicators it views as positive, including a 13% improvement in costs compared with 2024 and a rise in the protocol’s take rate from 5% to more than 6.1%. The take rate refers to the share of staked ETH rewards retained by the protocol as fees.
The DAO also noted that staking rewards declined just 20% during a broader market pullback, which it presented as evidence of relative resilience. Whether tokenholders will approve the buyback and its subsequent batches remains to be seen, as each stage of the process is subject to a separate governance vote. The outcome could have meaningful implications for LDO’s price trajectory given the scale of the proposed purchase.
Originally reported by CoinTelegraph.
