Lido DAO proposes $20M buyback, can LDO price recover?

Lido’s DAO is weighing a treasury deployment of up to $20 million to repurchase LDO tokens, as the protocol argues the asset is trading well below what its fundamentals justify.

A governance proposal submitted by the Lido Ecosystem Operations team seeks approval for the Lido Growth Committee to use as much as 10,000 stETH from the DAO treasury to accumulate LDO. 

Based on Ether prices near $2,000, the plan translates to roughly $20 million in potential buybacks.

The proposal frames the move as a response to what it describes as a “historically depressed” valuation.

LDO is currently trading at an LDO-to-ETH ratio of around 0.00016, a level roughly 70% below its typical range over the past two years. 

At current market prices, the buyback could absorb close to 65 million tokens, representing about 8% of the circulating supply.

Execution, if approved, would be gradual.

The DAO has proposed splitting purchases into batches of 1,000 stETH, using limit orders or dollar cost averaging to reduce market impact. 

Each tranche would require separate approval from tokenholders, and progress reports would be required before continuing further allocations.

Financially, the proposal arrives at a time when Lido’s revenue has come under pressure. 

The protocol reported $40.5 million in revenue for 2025, a 23% decline year over year, largely due to a similar drop in staking fees to $37.4 million. 

However, the DAO maintains that core performance has held up better than price action suggests. 

Net rewards fell about 20% over the same period, costs improved 13%, and the protocol’s take rate increased from 5% to over 6.1%, improving fee capture.

Take rate represents the share of staking rewards that the protocol retains as fees.

Meanwhile, Lido continues to dominate Ethereum’s liquid staking sector, holding around 23% of staked Ether, according to its February 2026 tokenholder update. 

The DAO argues that this position, alongside stable operational metrics, supports the case that the current valuation gap is not aligned with the protocol’s underlying activity.

Can LDO price recover?

A buyback of this scale could offer some short-term support by tightening the circulating supply and improving liquidity conditions; however, price reaction to the latest proposal has so far been modest. 

LDO surged from intraday lows around $0.29 to over $0.315 when writing, but continued upside would also depend on the broader market momentum that is being heavily influenced by Bitcoin’s price action.

LDO recently fell to an all-time low near $0.27 on March 7 and has since hovered around $0.30 to $0.31, giving it a market capitalisation in the $255 million to $260 million range.

However, the token remains down about 95.9% from its August 2021 peak of $7.30.

For now, LDO’s trajectory appears tied as much to external sentiment as it is to internal fundamentals, leaving the proposed buyback as a potential catalyst rather than a guaranteed turning point.