Lido DAO Deploys NEST Program to Revive Stabilize Failing Governance Token

Lido DAO has launched the NEST (Network Economic Support Tokenomics) program to stabilize its LDO governance token, which has lost over 95% of its value since 2021. The program is an automated mechanism that will buy back LDO with excess income from stETH. If the protocol earns more than $109,000 in a day, 50% of the extra income goes into NEST.

The annual revenue benchmark for NEST is set at $40 million, and it can only buy up to $10 million worth of LDO per year. However, there's currently barely enough liquidity on decentralized exchanges to execute this plan, so Lido will also use centralized venues like Binance to purchase LDO.

The market has reacted positively to the NEST program, with LDO rallying by 30% in a month where it resisted a broader downturn in the DeFi market. However, there's still concern about the limited liquidity on-chain and the impact of large-scale purchases on the market price.