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Lido Proposes 8.5% LDO Buyback Amid Price Dislocation

Lido Proposes 8.5% LDO Token Buyback – DAO Aims to Address Price Dislocation

Key Takeaways

• Lido has proposed a one off buyback of around 8.5% of the circulating LDO supply.
• The plan would use 10,000 stETH from the Lido DAO treasury, worth about 20 to 21 million dollars at current prices.
• The buyback could cover roughly 70 million LDO tokens if approved.
• Lido cites a historically low LDO to ETH ratio and a 97% price decline from the 2024 high.
• Large holders have offloaded nearly 80 million LDO since October, according to Santiment data cited in the proposal coverage.

Lido DAO Plans One Off Buyback Funded With 10,000 stETH

Lido, a leading Ethereum staking platform, has put forward a proposal to repurchase approximately 8.5% of the circulating supply of its native LDO token. The plan is described as a one off initiative and would be financed with 10,000 stETH from the Lido DAO treasury.

At current stETH prices of around 2,000 to 2,100 dollars, the allocated amount represents roughly 20 to 21 million dollars in value. Based on current market conditions referenced in the proposal coverage, this amount would be sufficient to buy about 70 million LDO tokens, equivalent to around 8.5% of the token’s circulating supply.

If the proposal receives approval, the buyback would be executed in batches of 1,000 stETH. Transactions would take place across liquid venues including Cow Swap, 1inch, Uniswap, Binance, and other platforms. According to the plan, this approach is designed to reduce slippage during execution.

The proposed measure is separate from an earlier long term buyback framework discussed in 2025.

LDO to ETH Ratio at New Lows in 2026

Lido attributes the proposed intervention to what it describes as a significant dislocation between LDO’s market price and the protocol’s underlying fundamentals. The protocol points to the LDO to ETH ratio, which measures LDO price performance relative to Ethereum.

According to the information cited, the ratio has reached a new low in 2026. This indicates that LDO has continued to underperform ETH over a two year period. Lido characterizes the situation as more than a routine fluctuation and describes it as one of the most significant divergences between the token’s market valuation and protocol performance in its history.

The token’s absolute price performance reflects this trend. LDO has fallen 97% from its 2024 high of 3.7 dollars to around 0.30 dollars at present levels referenced in the report. Over the same period, Lido states that its staking dominance and operational improvements have not been reflected in the token’s valuation.

The proposal therefore frames the buyback as a targeted response to the prolonged relative weakness of LDO compared with Ethereum.

Separate Long Term Buyback Framework Under Consideration

The one off buyback proposal is distinct from a previously floated long term plan. That draft framework, introduced last year and expected to be formalized in the second quarter of 2026, outlines an automatic annual buyback mechanism.

Under the long term draft, LDO buybacks would be activated using half of any protocol revenue above 40 million dollars. An additional condition would require ETH to trade above 3,000 dollars before triggering the mechanism.

While both initiatives involve repurchasing LDO, the current proposal focuses solely on deploying 10,000 stETH from the treasury as a single allocation. The long term structure, by contrast, links buybacks to revenue thresholds and ETH price conditions.

The coexistence of these two frameworks indicates that the DAO is evaluating both immediate and conditional approaches to influencing token supply dynamics.

Whale Activity Shows Reduced Large Holder Exposure

Token holder data referenced in the coverage adds further context to current market conditions. Since the October price crash, wallets holding between 10 million and 100 million LDO, as well as those holding between 100 million and 1 billion LDO, have collectively offloaded nearly 80 million tokens.

This reduction in large holder positions has occurred over the past several months. The data source cited is Santiment. The reported selling activity aligns with the broader decline in LDO’s price and its continued underperformance against ETH.

The proposal coverage notes that renewed conviction from large holders would be necessary for a sustained rebound. However, the current figures show a net reduction in whale exposure during the recent downturn.

For market participants, including users evaluating crypto based services and platforms, large holder behavior can influence liquidity and short term price movements. The proposed buyback, if executed, would represent a sizable demand event relative to circulating supply.

Implications for LDO Supply and Market Structure

If fully implemented, the buyback would remove around 70 million LDO tokens from the market, corresponding to approximately 8.5% of the circulating supply. The execution across multiple liquid venues in 1,000 stETH increments indicates a phased approach rather than a single large transaction.

Because the plan is funded directly from the DAO treasury, it represents an internal capital allocation decision rather than an external financing event. The use of stETH also ties the initiative directly to Ethereum based assets held by the protocol.

The proposal arrives at a time when the LDO to ETH ratio has reached a multi year low and after a 97% decline from the token’s 2024 peak. The DAO’s stated objective is to address what it describes as a structural price dislocation rather than a short term fluctuation.

Our Assessment

Lido’s proposal outlines a one off buyback of approximately 8.5% of the circulating LDO supply, funded with 10,000 stETH from the DAO treasury. The initiative follows a prolonged period of underperformance relative to ETH, a 97% decline from the 2024 high, and reported net selling of nearly 80 million LDO by large holders since October. The plan is separate from a longer term buyback framework tied to revenue and ETH price conditions that is expected to be formalized in the second quarter of 2026.