Lido DAO Proposes $10M Annual Automated LDO Buybacks Using 10% Staking Revenue
Lido DAO’s finance arm Steakhouse has proposed an automated LDO buyback mechanism funded by staking revenue. The plan allocates 10% of total staking rewards to repurchase LDO tokens through an LDO/wstETH liquidity pool managed by an Aragon Agent. Buybacks trigger only when ETH trades above $3,000 and annualized protocol revenue exceeds $40 million. The system caps annual repurchases at $10 million, though current revenue suggests about $4 million in yearly buybacks. If governance approves, the mechanism could launch in Q1 2026. The automated LDO buyback is designed to boost on-chain liquidity, reinforce token value and strengthen DAO governance. Traders should note the revenue and price triggers, as the move mirrors MakerDAO’s Smart Burn Engine and aims to support LDO’s market price during strong ETH performance.
Bullish
Automated buybacks funded by staking revenue reduce circulating supply and add consistent liquidity support for LDO. The revenue and ETH price triggers ensure buybacks coincide with strong market conditions, potentially underpinning token value. With a $10 million annual cap and an expected $4 million in repurchases at current revenue levels, the mechanism signals robust protocol health and governance discipline. In the short term, traders may see increased buy-side pressure around trigger thresholds. Long term, the consistent demand for LDO should bolster market stability and encourage positive momentum.