Market waits as Lido buyback gets green light and LDO hovers near record lows

Investors in Lido are weighing a new Lido buyback proposal as governance participants debate whether the token’s plunge has created a rare value opportunity.

$20 million LDO repurchase proposal and valuation backdrop

The Lido DAO governance community has introduced a one-time $20 million repurchase program for its LDO governance token, funded from protocol reserves. The plan, submitted on Friday, is now under active review by tokenholders and could reshape sentiment around the asset’s recent performance.

The initiative requests authorization to deploy 10,000 stETH from Lido’s treasury, currently valued at roughly $20 million, to purchase LDO on the open market. According to the DAO, this move targets what it calls an unprecedented valuation gap between LDO and Ethereum.

The current LDO/ETH price ratio stands at 0.00016, which the proposal notes is around 63% below its two-year median level. Moreover, the DAO argues that this discount is not explained by a comparable deterioration in underlying protocol fundamentals.

Market data from CoinGecko shows LDO trading at $0.30, representing a steep 95.9% decline from its all-time high of $7.30 reached in August 2021. That said, the token still commands a market capitalization of about $255 million, placing it as the 141st largest cryptocurrency by total value.

Existing and proposed token buyback mechanisms

The DAO’s documentation notes that LDO may ultimately operate with two distinct token repurchase mechanisms. One design links buybacks to Lido Finance profits when ETH trades above $3,000, with a ceiling of $10 million in purchases per year. However, that framework has not yet been fully implemented.

The second mechanism is the newly outlined manual program, which would rely on the release of 10,000 stETH from reserves as a stETH treasury repurchase tool. Under this structure, the DAO would conduct targeted LDO acquisitions using these tokens, subject to staged approvals.

Strategy for the manual ldo token buyback emphasizes flexibility rather than a single, large market order. Moreover, governance participants stress that transparent reporting and incremental execution are central to limiting adverse price impacts.

Phased execution and governance oversight

Instead of deploying the full 10,000 stETH at once, Lido plans a phased execution strategy. Each tranche would consist of 1,000 stETH converted and used to repurchase LDO, moving gradually toward the program’s maximum allocation.

Every individual phase must receive a separate on-chain authorization from tokenholders before execution. This structure, the DAO says, preserves community control and allows participants to reassess market conditions after each stage of the program.

To reduce slippage and avoid signaling pressure in the order books, Lido intends to rely on limit order execution or dollar-cost averaging techniques. Moreover, the proposal requires detailed reporting after each completed tranche before proceeding to the next set of purchases.

The DAO previously explored an automated, rules-based repurchase model in November 2024. However, that earlier lido dao proposal ultimately stalled before implementation, prompting the current push for a more hands-on, manual framework.

Revenue pressures and protocol performance in 2025

Lido’s financial update for 2025 indicates protocol revenues of $40.5 million, a decrease of 23% year over year. Staking fee income, which remains the main driver of revenues, also fell 23% to $37.4 million, reflecting a more challenging environment across the eth staking market.

Despite the revenue contraction, the DAO highlights several positive operational trends. Operating expenses declined by 13% on an annual basis, while Lido’s protocol fee rate rose from 5% to 6.11% of total staking rewards. Moreover, these metrics suggest the protocol has continued to optimize its cost structure even as headline income pulled back.

Lido’s governance notes in the proposal that the current LDO pricing does not match the scale of these fundamentals. In its words, the valuation gap reflects a market