Lido's decentralized autonomous organization is considering a one-off $20 million buyback of its LDO governance token. The proposal aims to address what the DAO calls a historic price dislocation, with LDO trading at depressed levels relative to Ether.
The DAO seeks permission to swap 10,000 Lido Staked Ether (stETH) tokens from its treasury for LDO, arguing the token is undervalued. LDO is currently trading at a steep discount to ETH, roughly 63% below its two-year median ratio.
This comes despite Lido holding the top spot in the Ethereum liquid staking market, with a 23.2% share of staked Ether. LDO's price has fallen roughly 96% from its all-time high of $7.30.
The DAO proposed buying the stETH in smaller batches of 1,000, using strategies like limit orders to avoid volatility. Each batch would require separate approval from tokenholders. The proposal follows a year where Lido's revenue fell 23%, mostly due to declining staking fees.