Lido, the dominant Ethereum liquid staking protocol managing $31 billion in assets, has reduced its workforce by 15% across core contributor organizations including Lido Labs, Ecosystem, and Alliance. Co-founder Vasiliy Shapovalov confirmed the strategic restructuring via X, emphasizing it was driven by cost management needs rather than performance issues.
The move aims to enhance protocol sustainability by reallocating resources toward technical development and community engagement. Shapovalov stated: "This decision was about costs — not performance. It affects incredibly talented people... Lido is building for the decades ahead — and this change helps reinforce that foundation." Despite occurring during a market upswing, the reduction reflects alignment with LDO tokenholder priorities.
Immediately following the announcement, Lido's governance token LDO surged 4.3%, though it remains down 21.6% weekly amid broader staking sector volatility. The protocol generates $90 million in annualized revenue and recently implemented its Lido v3 upgrade with customizable "stVaults."
The restructuring follows a contained May security incident where a compromised oracle key led to a 1.46 ETH loss, though user funds and protocol integrity remained unaffected. This cost-cutting mirrors similar bear-market measures by protocols like MakerDAO, often resulting in short-term volatility but potential long-term stabilization.