Lido Unveils NEST: Automated Buyback Program for Struggling LDO Token
Lido DAO has introduced an automated program called NEST to buy back its governance token LDO. The move is in response to LDO's significant decline in value, losing over 95% since 2021.
The Network Economic Support Tokenomics (NEST) program aims to bridge the gap between what the protocol earns and what its token is worth. An annual revenue benchmark of $40 million has been set, with 50% of excess income going towards buying LDO through NEST. However, there's a daily cap of $50,000 on LDO purchases, totaling $10 million annually.
The buyback mechanism uses a combination of on-chain and centralized exchanges to execute purchases. The available liquidity is limited, but the program allows for multiple batches of 1,000 stETH (worth around $2 million) to be bought at regular intervals, with each batch requiring its own governance step.