Lido’s DAO is evaluating a one-time $20 million buyback of its governance token, LDO, aiming to address a marked valuation disconnect versus Ether, according to a proposal filed Friday. The plan would convert up to 10,000 Lido Staked Ether (stETH) held in the treasury into LDO, on the view that the token is significantly undervalued.
The proposal describes the current divergence between LDO’s market price and the protocol’s fundamentals as unusually wide. LDO has plunged about 96% from its August 2021 peak and is trading near $0.30, leaving market capitalization around $255 million. The token’s price-to-ETH ratio is roughly 0.00016, about 63% below its two-year median.
To reduce market impact, the DAO suggests carrying out the swaps in up to ten tranches of 1,000 stETH each. Each tranche would require separate tokenholder approval before execution and would be executed using limit orders or a dollar-cost-averaging approach to avoid sharp volatility. Results from each tranche would be disclosed before the next is approved, and tokenholders could halt the program at any time.
The proposed buyback follows earlier community conversations about automated buyback mechanisms that were not implemented. Lido remains the largest liquid staking provider on Ethereum, controlling roughly 23.2% of staked ETH — a concentration that has previously prompted centralization concerns.
Lido’s financial picture has softened along with broader market conditions. The protocol reported revenue down about 23% to $40.5 million in 2025, with staking fee revenue declining to $37.4 million. Staking rewards have fallen by roughly 20% amid the market contraction. The DAO highlights offsetting improvements: operating costs declined about 13% year-over-year, and Lido’s take rate — the share of staking rewards retained as fees — rose from about 5% to over 6.1%, increasing fee capture.
Supporters of the buyback argue it would help close a valuation gap that doesn’t reflect protocol performance, while critics may view treasury-funded purchases as risky or as treating symptoms of market sentiment rather than underlying issues. The staged, tranche-based approval process gives tokenholders repeated opportunities to evaluate the tradeoff between using treasury assets to support the token price and preserving reserves for other uses.