Lido DAO Proposes $20M LDO Token Buyback

Lido DAO, Ethereum's leading liquid staking protocol, has proposed a one-time buyback of its governance token, LDO, valued at approximately 20 million, to address a significant undervaluation relative to Ether and the protocol's underlying performance. The governance proposal, submitted on Friday, calls for swapping up to 10,000 stETH tokens from the DAO's treasury for LDO in a series of controlled batches.

The plan aims to close a persistent gap between LDO's market price and Lido's strong position in the Ethereum ecosystem. Currently, LDO trades at around 0.31, reflecting a decline of about 96 percent from its peak of 7.30 in August 2021. Its market capitalization stands at roughly 260 million, ranking it as the 141st largest token by value. The LDO-to-ETH ratio has fallen to 0.00016, approximately 63 percent below its two-year median, marking one of the token's most pronounced dislocations from protocol fundamentals in its history, according to the proposal.

To execute the buyback, the Lido Growth Committee would acquire LDO in increments of 1,000 stETH each, using strategies such as limit orders or dollar-cost averaging to minimize market volatility and slippage. Venues...