Lido DAO Proposes $20M LDO Buyback Amid 'Historic Dislocation'

Lido DAO is proposing a one-time $20 million buyback of its governance token LDO, citing a severe dislocation between the token's market price and the underlying protocol's performance.

The proposal calls for swapping 10,000 staked Ether (stETH) from the DAO treasury for LDO tokens. To limit market impact, purchases would be executed in batches of 1,000 $stETH using limit orders or a dollar-cost averaging strategy.

LDO is currently trading at around $0.30, down roughly 95.9% from its $7.30 all-time high set in August 2021. Its market cap stands at approximately $255 million.

The DAO argued that the revenue decline does not justify the scale of LDO's price drop relative to Ethereum. 'This is not a routine fluctuation. It represents one of the most significant dislocations between LDO's market price and its underlying protocol fundamentals in the token's history,' the DAO said.

Lido holds the largest share of staked Ethereum on the Ethereum network at 23.2%, according to Dune Analytics.