Key Highlights
- Lido plans a 10,000 stETH LDO buyback as the token trades near multi-year lows amid market weakness.
- The Growth Committee will split LDO purchases across exchanges with strict 3% slippage control.
- Buyback aims to realign LDO valuation with protocol strength despite falling market sentiment.
Lido’s decentralized autonomous organization plans a one-time buyback of its governance token, LDO, using up to 10,000 stETH from its treasury. The move comes as LDO trades at historically low levels, aiming to support tokenholders during a weak market.
According to the proposal, the Growth Committee will manage the purchases across on-chain and off-chain platforms, including Binance, OKX, and Uniswap. Trades will happen in smaller batches to avoid moving the market too much, with a 3% maximum price deviation.
As per CoinMarketCap data, LDO is currently trading around $0.3201, up 4.66% in the past 24 hours, about 63% below its two-year average versus ETH. The committee plans to buy in 1,000 stETH batches, each approved through the Easy Track governance process.
After completing a batch, a forum report must be published before the next purchase. All LDO bought will go back to the treasury, keeping control with the DAO. This buyback is separate from Lido’s ongoing NEST program, which focuses on automated token purchases based on protocol performance.
Rationale behind the buyback
The reasoning behind the buyback is straightforward. LDO’s market price has fallen faster than the protocol’s actual performance. Net rewards from the protocol dropped about 20%, while the LDO-to-ETH ratio fell roughly 50%.
At the same time, operational costs improved by 13% year-on-year, and the fee capture rose from 5% to 6.11%. Experts say these numbers suggest LDO is undervalued, creating a potential opportunity for the DAO.
One of the members, Kuzmich, commented that “I like this idea for the following reasons—buying your own token when it’s cheap… It could also help support the price and show confidence to the market about project.”
Execution and oversight
The Growth Committee can manage the buyback within set limits, using limit orders and dollar-cost averaging to avoid shaking up the market. On-chain liquidity is thin, so large single trades could move prices too much.
Nansen supports the plan, noting that buying tokens now ties LDO’s value more closely to protocol performance rather than just past averages. The DAO can pause or stop the buyback at any time, keeping strict oversight. Spreading trades across multiple platforms also reduces risks like exchange freezes or regulatory delays.
In the end, the proposal is a careful capital decision. It aims to support the market in the short term while maintaining long-term governance and showing confidence in Lido’s role in liquid staking.
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