# Pragmatically Institutionalizing Lido DAO

**URL:** <https://research.lido.fi/t/pragmatically-institutionalizing-lido-dao/9945>\
**Category:** Proposals\
**Created:** [April 21, 2025, 5:05pm UTC](https://research.lido.fi/t/pragmatically-institutionalizing-lido-dao/9945 "2025-04-21T17:05:18Z")\
**Posts on this page:** 1\
**Showing post:** 2

<div class="post-metadata">

**Author:** ![steakhouse](https://dub1.discourse-cdn.com/flex013/user_avatar/research.lido.fi/steakhouse/32/1878_2.png) [@steakhouse](https://research.lido.fi/u/steakhouse)\
**Post date:** [April 21, 2025, 5:50pm UTC](https://research.lido.fi/t/pragmatically-institutionalizing-lido-dao/9945/2 "2025-04-21T17:50:16Z")

</div>

> [@BlockworksResearch](#):
>
> 1. **Further Diversify Treasury:** The treasury must evolve to adjust for market risk and reduce firm-specific risk for LDO holders.
> 
> - Lido should consider a token cancellation on authorized but not issued LDO in the treasury to signal confidence in its revenue streams.
> - Lido makes revenue in ETH and stores that revenue in stETH, resulting in concentration risk and posing concerns over Lido DAO’s operational longevity. Lido DAO should consider pursuing discriminatory selling of revenue into productive stable assets.

Thank you for the thoughtful suggestions. Just to address some of the proposals we can provide more helpful input on:

1: Token cancelation would not really matter from our POV as we consider it to be ‘unissued’. Whether it’s canceled or not does not limit the ability of the DAO to issue or repurchase tokens anyway.

2: This is quite orthodox. DAO grants are funded in USD stablecoins while revenues are in ETH. This obviously creates an exchange rate risk to the continuity of grant funding should ETH price decline.

There are relevant materials in the [Treasury Management Committee](https://research.lido.fi/t/proposal-to-approve-lido-dao-treasury-management-principles-and-authorize-the-formation-of-a-treasury-management-committee/) threads regarding the minimalist no-custody and automatable strategies in place and in development. [TMC-1](https://research.lido.fi/t/tmc-1-pipeline-to-sell-steth-at-regular-intervals-for-dai/) and tactical motions like [TMC-3](https://research.lido.fi/t/tmc-3-stsol-repatriation-proposal/) are relevant. So this is already taking place.

If we could draw an ideal endpoint where the DAO could fund its grants without regard to the price of ETH, it would look like an endowment-type stablecoin allocation in a simple product like sUSDS whose proceeds could effectively fund the grants in perpetuity. To achieve this on an illustrative $60m annual burn rate at 4.5%, the DAO would need $1.3bn in reserves. At time of writing the ETH balance of the surplus is ±$50m with stablecoins from TMC-1 on top ($22m today). Per [SAFU](https://dune.com/steakhouse/lido-safu) Lido DAO accrues ±300 ETH a week or ±$25m a year at today’s prices.

Unfortunately this is not a viable endpoint, though through motions like TMC-1 and others we hope to reach an end state that minimizes the risk to grant continuity in a more sustainable way. The fastest way to improve this outlook is, in order of sensitivity, ETH price rerating and market share gains in staking.

---

_[View the full topic](https://research.lido.fi/t/pragmatically-institutionalizing-lido-dao/9945)._