Lido DAO Proposes $20 Million LDO Token Buyback amid 96% Price Decline

Lido DAO, the decentralized governance body behind the largest liquid staking protocol on Ethereum, proposed a one-off $20 million buyback of its LDO governance token on March 28, 2026, citing a significant price dislocation between the token’s market value and the protocol’s underlying fundamentals.

The proposal seeks authorization to swap 10,000 Lido Staked Ether (stETH) tokens from the DAO treasury for LDO, which is trading at $0.31 and has fallen 95.9% from its all-time high of $7.30 in August 2021.

Lido DAO Cites Price Dislocation as LDO Trades at 63% Discount to Two-Year Median

The buyback proposal argues that LDO is undervalued relative to Ethereum (ETH) and the protocol’s performance metrics. LDO is currently trading at an ETH ratio of 0.00016, approximately 63% below its two-year median, even as Lido’s staking protocol maintains the largest share of staked Ether at 23.2%, according to Dune Analytics data.

Lido DAO stated that the current price dislocation is not justified by a proportional deterioration in protocol performance. The DAO noted that while LDO has declined nearly 96% from its peak, the protocol’s fundamentals remain strong. Lido’s revenue fell 23% to 40.5 million in 2025, primarily due to staking fees declining 23% to $37.4 million, but the DAO pointed to improved cost efficiency and an increased take rate from 5% to more than 6.1%.

LDO has a market capitalization of $255 million as of March 2026, ranking as the 141st largest token by value. The token’s decline reflects broader market conditions that have compressed staking yields, with base APRs on Ethereum now ranging between 3% and 5%.

Lido DAO Proposes Staged stETH Swap with Batch Approvals and Dollar-Cost Averaging

The Lido DAO proposal outlines a structured approach to executing the $20 million buyback, using up to 10,000 stETH from the DAO treasury. The DAO proposed purchasing LDO in smaller batches of 1,000 stETH to minimize market impact, utilizing limit orders or a dollar-cost averaging strategy.

Each batch would require separate approval from LDO token holders, and the program could be halted at any point. Results from each batch would need to be reported before subsequent batches proceed. The proposal follows a November 2025 governance discussion about implementing an automated buyback mechanism for LDO, though that mechanism has not been adopted.

The proposal comes as Lido’s protocol dominance in the Ethereum liquid staking market has been previously flagged by industry observers as a potential centralization risk to the network. Despite this concentration, Lido’s governance argues the current token valuation does not reflect the protocol’s market position or operational improvements.

Lido DAO Approves $60 Million 2026 Budget and Expands into Institutional Products

Lido DAO formally approved a $60 million operating budget for 2026, allocating $43.8 million for core operations and growth and $16.2 million in discretionary funds for high-impact initiatives including liquidity incentives and institutional product development. The budget supports a three-year strategic plan known as GOOSE-3, which outlines priorities beyond Lido’s core liquid staking business.

The protocol launched Lido V3 and its stVaults product on Ethereum mainnet on January 30, 2026, replacing the previous single-product staking model with modular infrastructure that allows institutional operators to customize vaults for specific custody, compliance, or yield requirements. Two Lido Earn products, EarnETH and EarnUSD, are also live, offering structured yield strategies with daily compounding.

On the infrastructure side, Lido plans to deliver Curated Module v2, Staking Router v3, and ValMart, a validator routing system designed to optimize for performance, cost, and decentralization. The protocol currently operates with more than 683 unique node operators.

VanEck stETH ETF Filing and WisdomTree ETP Launch Signal Institutional Demand

VanEck filed an S-1 registration with the U.S. Securities and Exchange Commission on October 20, 2025 for a Lido Staked ETH exchange-traded fund (ETF), marking the first U.S. ETF proposal directly referencing stETH. The application remained pending as of March 2026.

In Europe, WisdomTree launched a Physical Lido Staked Ether exchange-traded product (ETP) in December 2025. The product is 100% stETH-backed and listed on Xetra, SIX, and Euronext exchanges, opening with assets under management between $36 million and $50 million. Lido’s participation in the Crypto Council for Innovation and the Proof of Stake Alliance has supported both regulatory filings.

The GOOSE-3 proposal calls for additional ETF and ETP partnerships to package stETH and stVaults for traditional capital markets. Key performance indicators for 2026 include stVaults total value locked, Lido Earn revenue contribution, ETF and ETP approvals, and early traction from real-business pilots.

FAQ

What is Lido DAO proposing with the $20 million LDO buyback?

Lido DAO proposed a one-off $20 million buyback of LDO tokens using 10,000 stETH from the DAO treasury, citing that the token is trading at historically depressed levels relative to Ethereum and the protocol’s fundamentals. The buyback would be executed in batches with token holder approval required for each stage.

How much did Lido DAO approve for its 2026 operating budget?

Lido DAO approved a $60 million operating budget for 2026, divided into $43.8 million for core operations and growth and $16.2 million in discretionary funds for liquidity incentives, institutional product development, and other high-impact initiatives.

Is there a Lido stETH ETF pending in the United States?

VanEck filed an S-1 registration with the SEC on October 20, 2025 for a Lido Staked ETH ETF, the first U.S. ETF proposal referencing stETH. The application remained under review as of March 2026. In Europe, WisdomTree launched a Physical Lido Staked Ether ETP in December 2025.

What new products has Lido launched beyond liquid staking?

Lido launched V3 with stVaults on Ethereum mainnet in January 2026, enabling institutional operators to create customized staking vaults. The protocol also introduced Lido Earn products, EarnETH and EarnUSD, which offer structured yield strategies with daily compounding.