Lido DAO seeks to reverse LDO's 95.9% drop from its all-time high through a $20 million buyback, highlighting the token's discount to Ether amid strong protocol fundamentals.
Lido DAO, a decentralized autonomous organization, has submitted a proposal to buy back up to $20 million worth of its LDO governance tokens. The plan involves swapping 10,000 Lido Staked Ether (stETH) tokens from the DAO's treasury for LDO, aiming to address the token's historically low price relative to Ether.
The LDO token has fallen 95.9% from its all-time high of $7.30 in August 2021, leaving it at a current price of $0.30 and a market capitalization of $255 million. This decline represents one of the most significant price dislocations in the token's history, according to the DAO.
LDO's Undervaluation Compared to Ether
Lido DAO noted that LDO is trading at a ratio of 0.00016 to Ether, which is about 63% below its two-year median. Despite this, Lido's staking protocol maintains a dominant 23.2% share of staked Ether on the Ethereum network, as reported by Dune Analytics.
The buyback would occur in smaller batches of 1,000 stETH tokens, with each batch requiring separate approval from tokenholders. Lido DAO plans to use limit orders or a dollar-cost averaging strategy to minimize market volatility and will report results after each batch.
In 2025, Lido's revenue decreased by 23% to $40.5 million, primarily due to a 23% drop in staking fees to $37.4 million. However, the DAO emphasized that protocol fundamentals remain strong, with rewards declining only 20%, costs improving by 13%, and the take rate rising to over 6.1%.
This proposal follows an earlier suggestion in November for an automated buyback mechanism, though that plan has not been implemented. The move comes as Lido continues to hold the largest share in Ethereum's liquid staking market.
