The Lido decentralized autonomous organization (DAO) has submitted a pivotal governance proposal to execute a one-off $20 million buyback of its native LDO token. The move aims to address what the DAO describes as a severe "price dislocation," with LDO trading at "historically depressed levels" relative to Ethereum (ETH).
The proposal, submitted on Friday, March 30, 2026, seeks permission to swap 10,000 Lido Staked Ether (stETH) tokens from the DAO's treasury for LDO on the open market. The DAO argues this action is justified because LDO is "undervalued" despite strong protocol fundamentals. "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 proposal states.
The buyback plan comes as LDO has fallen roughly 96% from its all-time high of $7.30 set in August 2021. At the time of the proposal, LDO was trading at $0.30 with a market capitalization of $255 million, ranking it as the 141st largest token. The DAO highlighted that LDO is trading at a steep discount to ETH at a ratio of 0.00016, which is approximately 63% below its two-year median.
This price decline persists even though Lido maintains its dominance in the Ethereum liquid staking market, holding a 23.2% share of all staked Ether according to Dune Analytics data. The protocol's revenue, however, fell 23% to $40.5 million in 2025, primarily due to a 23% drop in staking fees to $37.4 million. Despite this, the DAO contends fundamentals remain strong, noting that rewards declined only 20% amid a broader market pullback, costs improved by 13% in 2025, and Lido's take rate—the percentage of staked ETH rewards kept as fees—rose from 5% to over 6.1%.
The proposed execution strategy involves buying stETH in smaller batches of 1,000, using limit orders or a dollar-cost averaging approach to mitigate market volatility. Each batch would require separate approval from tokenholders, and results must be reported before proceeding further. The acquired LDO tokens would be deposited into decentralized exchange liquidity pools to enhance liquidity.
This proposal follows a previous pitch in November from a Lido DAO member for an automated buyback mechanism, which was not implemented. The current vote serves as a significant test of decentralized governance and active treasury management, potentially setting a precedent for other DAOs with large treasuries and underperforming governance tokens.
