Lido’s decentralized autonomous organization is considering a one-off $20 million buyback of its governance token to address so-called price dislocation, which is at “historically depressed levels” relative to Ether, according to the DAO.
The proposal, submitted Friday, seeks permission to swap 10,000 Lido Staked Ether (stETH) tokens, currently worth $20 million from the DAO’s treasury for Lido DAO (LDO), arguing that LDO is undervalued.
“This is not a routine fluctuation. It represents one of the most significant dislocations between LDO’s market price and its underlying protocol fundamentals in the token’s history.”
A token buyback of this size could influence the price of the token, which has fallen roughly 96% from its all-time high. In November, a Lido DAO member pitched an automated buyback mechanism for LDO to improve the token’s price. However, that proposal hasn’t been implemented.
Lido DAO pointed out that LDO is trading at a significant discount to Ether (ETH) at a ratio of 0.00016, roughly 63% below its two-year median.
This is despite the protocol holding the top spot of the Ethereum liquid staking market, with a 23.2% share of staked Ether, according to Dune Analytics data. The protocol’s dominance has even been flagged as a centralization risk to the network in previous years.
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LDO is currently trading at $0.30, down 95.9% from its $7.30 high set in August 2021, according to CoinGecko data. LDO’s $255 million market cap makes it the 141st largest token by value at the time of writing.
“That dislocation is not justified by a proportional deterioration in protocol performance,” Lido DAO said.
Lido DAO proposes buying stETH in batches
Lido DAO proposed buying up to 10,000 stETH in smaller batches of 1,000 to buy LDO.
Lido DAO said it would use limit orders or adopt a dollar-cost averaging strategy to avoid market volatility.
However, each batch would need approval and could be stopped by tokenholders.
After each batch, results would also need to be reported before continuing execution further.
The proposal also comes as Lido’s revenue fell 23% to 40.5 million in 2025, mostly due to staking fees falling 23% to $37.4 million.
Lido DAO argued the protocol’s fundamentals remain strong, noting that rewards declined just 20% amid the broader market pullback, costs improved 13% in 2025 compared with 2024 and Lido’s take rate rose from 5% to more than 6.1%, enhancing fee capture.
Take rate refers to the percentage of staked ETH rewards the protocol keeps as fees.
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