Lido to prepare for the bear market

Let’s do a short back-of-the-envelope analysis.

Holdings, income & costs:

  1. Treasury holds notch less than 21,000 ETH & 3900 stETH.
  2. Protocol revenue depends on Ethereum staking APR, protocol TVL & the protocol fee percent. Lido generates about 500 ETH/day in staking rewards, making it for 25 ETH / day in protocol fees (10% of the staking rewards, 50% of the fees), or 750 ETH/month, 2250 ETH/quarter, 9000 ETH/year. The TVL can’t get lower until Withdrawals (~half a year+ after the Merge), and the APR is expected to grow after the Merge.
  3. We’re working on properly detailed budget rn, but let’s consider 50-strong team with $200,000/year gross comp. RCC budget for this year calls for ~$2,500,000/year on marketing & ops costs on top of team comp, making it for $12,500,000 / year, $3,125,000 / quarter budget, nominated in stables.


  1. Have we reached the bottom at ~$1800/ETH, the costs of $3,125,000/quarter is ~1750 ETH and is fully covered by the protocol fees.
  2. Have the price drop to $1500/ETH, the quarterly cost is ~2100 ETH, taking almost entire new protocol income.
  3. $1000/ETH makes costs at 3,125 ETH/quarter, calling for ~1000 ETH / quarter extra from the Treasury.
  4. $800/ETH makes up for 3,900 ETH/quarter costs and requires 1,650 ETH/quarter from the Treasury. That’s 6,600 ETH from the Treasury a year, or 3.8 years of runway with Lido DAO’s 25,000 ETH+stETH Treasury & current rewards rate.
  5. $400/ETH makes costs at 7,800 ETH/quarter. Those would require 5550 ETH/quarter from Treasury, and the total runway would be a year and 1.5 months.

The market has seen the 4-year bear already, and the drop wasn’t 2x or 5x — it was ~15x. Selling 10,000 ETH would allow to secure ~1.5 years of runway while having the chance to accumulate rewards in a meantime. Would took less ETH have we done it earlier for sure, but we’re making next moves from the situation we’re currently in.