Appreciate the work on this, but I have some concerns 
I really appreciete the thought and detail you’ve put into this proposal. It’s definitley a step in the right direction when it comes to finding ways for the DAO to deliver more direct value to LDO holders.
A dynamic buyback program could help boost confidence in the token and send a strong signal to the market. That said, I’m not fully convinced this exact approach is the best path forward.
Potential for Volatility
Buybacks tied to treasury balance thresholds can cause the market to guess and front‑run when buybacks will start or stop. This can lead to “cliff” moments where price and liquidity swing sharply around those trigger points, especially in low‑liquidity enviroments. Instead of smoothing price action, it might create cyclical surges and drops driven more by speculation than organic demand.
Weak Link to Protocol Fundamentals
While buybacks reduce supply (which can lift price), they don’t directly tie LDO’s value to the actual success of Lido’s core business - staking ETH and earning fees.
Treasury size can fluctuate for reasons unrelated to performance - for example: changes in ETH market price affecting the value of stETH holdings, temporary deviations in the stETH/ETH peg, or planned DAO spending like grants, contributor payments, or investments. That means buyback triggers might not reflect the real operational health of the protocol, and could decouple LDO’s price from Lido’s actual growth.
Alternative: LDO Staking with Fee Sharing
Instead of (or alongside) buybacks, we could explore LDO staking where a dynamic % of protocol fees is distributed to staked LDO holders. The % could be based on multiple factors, including the state of the treasury.
Potential benefits:
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Direct alignment with Ethereum staking success: more ETH staked via Lido = more fees = higher rewards.
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Treasury‑light approach: rewards come from ongoing income, not from reserves.
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Market‑responsive: rewards naturally scale down in slower markets and up in bullish periods.
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Encourages long‑term holding & governance: holders are incentivised to lock LDO and stay engaged.
A buyback program can provide a quick confidence boost, but it’s episodic and potentially volatile. A fee‑sharing model ties value directly to protocol fundamentals, is self‑sustaining, and rewards long‑term community members consistently.
I’d love to see discussion on whether a hybrid approach (moderate buybacks + fee sharing) could give us the best of both worlds: near‑term market support and long‑term sustainability.
What do you think?
- Dynamic Buybacks
- Dynamic Percentage of Fees
- Both
- None