Lido DAO's Contingent Repurchase May Set New Benchmarks for DeFi Treasury Management

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Lido DAO's Contingent Repurchase May Set New Benchmarks for DeFi Treasury Management

Bitget-RWA2025/11/12 07:02

By:Bitget-RWA

- Lido DAO proposes $10M conditional buybacks for LDO tokens to boost liquidity and stabilize value. - Buybacks activate when ETH exceeds $3,000 and Lido's annual revenue surpasses $40M, using NEST for small trades. - Repurchased LDO is reinvested into wstETH liquidity pools via Aragon Agent, avoiding permanent token burns. - The anti-cyclical design preserves treasury resources during downturns, aligning with decentralized governance principles.

Lido DAO, recognized as one of the leading decentralized staking platforms, has put forward a $10 million automated buyback scheme for its

LDO

governance token, with the goal of boosting liquidity and supporting the token’s price stability. This plan, crafted by the Steakhouse Finance team within the DAO, sets up a conditional trigger: buybacks will only occur if Ethereum trades above $3,000 and Lido’s yearly revenue exceeds $40 million. The annual buyback limit is set at $10 million, ensuring that treasury assets are used only when market conditions are advantageous, according to a

FinanceFeeds report

. The proposal is currently being discussed on Lido’s governance forum and, as mentioned in a

Lookonchain feed

, could be rolled out as soon as the first quarter of 2026.

Dubbed "Liquid Buybacks," this mechanism differs from conventional buybacks by channeling the repurchased LDO tokens into on-chain liquidity pools alongside wrapped staked

Ether

(wstETH).

Lido DAO's Contingent Repurchase May Set New Benchmarks for DeFi Treasury Management image 0

Managed through an Aragon Agent smart contract, this strategy is designed to strengthen LDO’s liquidity and decrease its circulating supply, but without permanently removing tokens from circulation, as

Coinfomania reports

. The liquidity pool will follow a

Uniswap

v2-style model, with the DAO maintaining oversight via the Aragon Agent to guarantee both transparency and decentralized asset management, as outlined in a

Blockonomi article

A key feature of the plan is its counter-cyclical approach: buybacks will be suspended during bearish markets to conserve treasury funds, only resuming when both Ethereum’s price and protocol income reach the set benchmarks, as explained in a

CryptoTimes piece

. This structure fits with Lido’s broader objective of reinforcing its tokenomics by strengthening the connection between staking services and governance. Experts suggest that this dual emphasis on liquidity and supply management could help Lido set a new standard for DeFi treasury operations, as noted by

CoinLaw

The execution of this program will utilize NEST, a decentralized trading platform, to carry out purchases in small batches of 350,000 LDO tokens, keeping each trade’s market impact below 2%. This incremental method helps manage both slippage and transaction costs, minimizing price fluctuations while maintaining efficiency, as highlighted in a

CryptoTimes piece

. Furthermore, half of the protocol’s revenue above $40 million will be allocated to buybacks, with the rest potentially funding other ecosystem projects, according to the

FinanceFeeds report

Lido’s approach takes inspiration from MakerDAO’s Smart Burn Engine, but tailors the concept to its staking-focused environment. By pairing LDO with wstETH, the DAO reinvests in its own ecosystem, increasing token utility and decreasing dependence on centralized liquidity providers, as described in the

Blockonomi article

. This proposal also mirrors a broader movement among DeFi projects, such as Uniswap, to implement treasury-based token management, as reported by

CoinLaw

Community involvement is at the heart of this initiative. Lido’s decentralized governance structure enables token holders to discuss and vote on the proposal via Snapshot, with ongoing conversations about potential parameter tweaks and alternative liquidity solutions, as detailed in a

Coinotag report

. Should the proposal pass, it could serve as a model for DAO-driven financial strategies, blending DeFi tokenomics with established treasury practices while upholding decentralized governance, according to the

FinanceFeeds report

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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