Lido DAO has proposed a $20 million one-time buyback of its native token LDO, a move that combines long-term strategic goals with opportunistic capital allocation. The idea raises serious concerns regarding market mispricing vs protocol fundamentals at a time when LDO is trading close to all-time lows in relation to ETH. This initiative is more than just a standard treasury move; it is a deliberate reaction to what the DAO perceives as a significant valuation discrepancy.

• Deep Value Opportunity: LDO's Sharp Disconnect with Fundamentals
• Execution Framework: Controlled, Transparent, & Flexible
• Multi-Venue Strategy to Minimise Market Impact
• Risks & Safeguards in a Volatitle Environment

The proposal intends to utilise up to 10,000 stETH from the DAO treasury to acquire LDO tokens. The Lido Growth Committee will implement this as a one-time project rather than using the automatic NEST format.

Depending on the state of the market, the Lido Ecosystem Foundation is in charge of execution. Following the acquisition, the committee will provide a thorough execution report and return all LDO tokens to the Treasury.

Importantly, the Liquid Buybacks: NEST execution with LDO/wstETH liquidity idea is not replaced by this proposal. This project aims to seize current market opportunities, whereas NEST concentrates on long-term automatic accumulation based on the ETH price and protocol performance.

Deep Value Opportunity: LDO's Sharp Disconnect with Fundamentals

The idea is primarily driven by LDO's unsatisfactory historical results in comparison to ETH. The current LDO: ETH ratio is approximately 0.00016, representing a 70% decrease from the ~0.0005 level that characterised most of the previous two years and a 63% discount to the two-year median of 0.00043.

Source: LIDO

A corresponding decline in fundamentals does not accompany this drop. The LDO: ETH ratio has decreased by approximately 50% over the same period, whereas net protocol incentives have decreased by about 20%. In the meantime, costs have decreased 13% year over year (2025 vs. 2024), and operational efficiency has improved.

Furthermore, despite general market conditions, the protocol's take rate has grown from 5% to 6.11%, improving fee capture. With steady fee output and a robust network of node operators, Lido is the top liquid staking middleware by total value locked (TVL).

Source: LIDO

Execution Framework: Controlled, Transparent, & Flexible

The buyback will be carried out in 1,000 stETH fragments, each of which will be initiated by Easy Track governance motions. Token holders continue to have the authority to reject any motion, so regulating the program's pace and continuity.

Predefined execution caps, such as a maximum ETH/LDO ratio (e.g., 0.0001x) and an execution window of up to a predetermined number of months, will be included in every batch. There will be a three-day objection period following a two-day notice to the forum before execution commences.

The procedure is designed with strict precautions. Trades are conducted within reasonable price variations thanks to a 3% tolerable slippage limitation. Additionally, if market conditions are favourable, the Growth Committee may expedite implementation by exercising its discretion over timing and pacing within predetermined limitations.

The DAO-share-holding wallets will only store enough stETH for the subsequent batch plus a 5% operational buffer to preserve discipline. Before the next drawdown is started, each batch needs to be finished and reported.