- Lido DAO published an overview of its NEST automated LDO buyback program.
- The token is trading more than 95% below its peak despite Lido controlling roughly 23% of staked Ether and billions in TVL.
- The buyback tests whether treasury capital can close the gap between LDO’s price and the protocol’s fundamentals.
Lido DAO has released a detailed overview of NEST, the automated program it is building to buy back its own LDO governance token.
The program is a direct response to LDO’s token, which has lost more than 95% of its value since 2021.
What is Lido’s NEST?
The Network Economic Support Tokenomics (NEST) program is Lido DAO’s long-term solution to the growing distance between what the protocol earns and what its token is worth, which it has been warning about for months.
Cryptopolitan reported that NEST is meant to run as an automated mechanism. It’s completely separate from the one-off proposal the DAO put forward in March to spend treasury funds directly on LDO.
An annual revenue benchmark of $40 million (about $109,000 per day) has already been set by the company. If the protocol earns more than this baseline in a day, 50% of that extra income is sent to the NEST program to buy LDO.
However, the program can only buy $50,000 worth of LDO per day, with a total annual cap of $10 million.
Cryptopolitan reported that the previous system proposed by Lido’s Growth Committee would use up to 10,000 stETH from the DAO treasury, worth roughly $20 million at ether prices near $2,000, to accumulate LDO.
The LDO-to-ETH price ratio was about 0.00016, representing a 70% decline from where it traded for most of the previous two years. During that same period, the protocol’s net rewards had only dropped about 20%. The DAO also said its costs went down by 13% compared to the year before, and its fee rate increased to 6.11% from 5%.
Lido holds the largest share of staked ether at around 23%. DefiLlama data also lists Lido’s total value locked near $17.8 billion against a market capitalization of roughly $252 million. Its annualized fees are around $693 million, and the annualized revenue is near $38 million.
No liquidity on decentralized exchanges
There is barely enough on-chain liquidity to execute the plan. Only about $90,000 worth of LDO is available to buy within 2% of the current price. This means a single batch purchase of 1,000 stETH (worth roughly $2 million) would use up all available liquidity several times over, causing the price to spike sharply.
To get around that, the proposal authorized buying LDO through centralized venues including Binance, OKX, Bybit, Gate, and Bitget, each offering more than $100,000 in depth, alongside on-chain routes such as CoW Swap, 1inch, and Uniswap. The purchases are made in 1,000 stETH batches, each requiring its own governance step (an “Easy Track” motion) with a three-day objection window and a slippage cap of 3% below the reference price.
The market reacted positively to the buyback scheme, with reports indicating that LDO rallied by roughly 30% in a month where it resisted a broader downturn in the DeFi market.
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FAQs
What is NEST?
NEST is the automated LDO buyback format Lido is developing as a long-term solution to its revenue and token-valuation issues, operating separately from the one-off treasury buyback the DAO proposed in March 2026, according to Cryptopolitan.
How much does Lido plan to spend buying back LDO?
The March proposal authorized up to 10,000 stETH from the DAO treasury, roughly $20 million at the time, executed in 1,000 stETH batches, which could retire about 8% of LDO's circulating supply.
Why does Lido have to buy LDO on centralized exchanges?
Onchain LDO liquidity is thin, with about $90,000 of depth within 2% of the price, so the DAO authorized routing trades through venues like Binance, OKX, Bybit, Gate and Bitget to execute at scale.
Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.
Hannah Collymore
Hannah is a writer and editor with nearly a decade of blog writing and event reporting experience in the crypto space. At Cryptopolitan, Hannah contributes to the news page, reporting and analyzing the latest developments in DeFi, RWA, crypto regulation, AI and frontier tech industries. She graduated from Arcadia university with a degree in Business Administration.
