TL;DR
The proposal seeks to authorize the Lido Growth Committee to execute the accumulation of LDO using up to 10,000 stETH from the Lido DAO Treasury outside of the automated NEST format. The execution will be managed via the Lido Ecosystem Foundation, provided current market conditions prevail. Once acquired, the LDO will be returned to the Treasury, and the Growth Committee will provide a full execution report.
Disclaimer
This proposal is not an addition, specification or replacement for Liquid Buybacks: NEST execution with LDO/wstETH liquidity proposal. NEST aims to establish a long-term automated solution when to acquire LDO based on protocol performance and ETH price, and to improve on-chain liquidity, if approved, while the current proposal is an one-off initiative to utilize market opportunities.
Motivation
LDO is trading at historically depressed levels relative to ETH. The LDO:ETH ratio currently sits at approximately 0.00016, a 63% discount to the 2-year median of 0.00043, and a 70% discount to the ~0.0005 that characterized most of the prior two years.
This is not a routine fluctuation. It represents one of the most significant dislocations between LDO’s market price and its underlying protocol fundamentals in the token’s history.
LDO:ETH ratio over past two years from Coingecko
Source: https://dune.com/steakhouse/lido-safu
Critically, that dislocation is not justified by a proportional deterioration in protocol performance. Net protocol rewards are down approximately 20% over the same period in which the LDO:ETH ratio has fallen ~50%. Costs improved 13% year-over-year (2025 vs. 2024), while the protocol’s take rate increased from 5% to 6.11%, improving fee capture despite a market backdrop. Lido continues to lead as the dominant liquid staking middleware by TVL, with consistent fee generation and a resilient node operator network.
This is ultimately a capital allocation decision: whether to deploy resources in a way that balances potential upside with associated risks, while also supporting the protocol’s long-term development.
Implementation Details
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Budget: Up to 10,000 stETH
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Execution Trigger
Execution of 1k stETH batches with pre-defined caps on the execution price published prior to the Easy Track motion on the forum (in this proposal thread). Each batch will pull funds via Easy Track from treasury with tokenholders being able to reject a motion and decide when to stop. Example: “1. motion to draw 1k stETH to buy LDO with (st)ETH over the Execution Window up to an ETH/LDO ratio of 0.0001x. Execution Window: ≤ x months” published on the forum on (t). After t+2 days, an Easy Track motion with a three day objection period can be started by the Growth Committee. -
Tolerable Slippage Threshold: ≤ 3%, i.e. worst acceptable execution price below reference price
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Execution Window: The execution window will be specified prior to each Easy Track drawdown. The Growth Committee retains discretion over execution pace and timing, within the defined parameters, and it is possible that execution happens much quicker than the full length of the window’s full budget within that period.
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DAO-Share-Holding Assets: Address is the Liquidity Observation Lab multisig, Rewards Share multisig, or any other new wallet created by the members of the Growth Committee that receives Treasury assets after the Liquidity Observation Lab mutisig drawdown via Easy Track holding stETH or LDO. Sending part of those funds to Centralized Exchanges (CEX) is explicitly permitted under this mandate.
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General Execution Strategy:
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Given that on-chain liquidity remains thin (approx. $90k depth at +/- 2% at the day of writing), a single-batch market order would result in massive slippage and is objectively inefficient. The Growth Committee may primarily utilize limit orders and Dollar Cost Averaging (DCA) to avoid market movements.
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The DAO-Share-Holding Assets address will not hold more stETH for the purpose of this proposal than is needed for the very next batch, +5% tolerance for operational reasons. LDO acquired will be sent to the Lido DAO treasury before another batch is pulled from the treasury.
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Growth Committee may also utilize the overall deeper off-chain liquidity on CEX such as Binance or OKX (>$100k +/- 2% depth each at the moment of writing) to execute trades or ask existing relationships with market makers to execute on Lido Ecosystem Foundation’s behalf.
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Swap execution shall consider the Tolerable Slippage Threshold
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Treasury assets may be used only for:
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transfers to/from Centralized Exchanges or Market Makers
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conversion/swaps to execute the mandate
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necessary execution costs (e.g. swap fees / gas)
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Venues: On-chain (CoW Swap, 1inch, Uniswap) and Off-chain (Binance, Bybit, OKX, Gate, or Bitget). The Growth Committee may also engage existing market-maker partners, in Lido Ecosystem Foundation’s name, to facilitate the swap.
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Funding: The Growth Committee instructs through one of its wallets (e.g. Liquidity Observation Lab multisig on Ethereum mainnet) to pull funds via Easy Track from the Lido DAO Treasury. Each batch shall be limited to 1k stETH. After execution of each batch, and before a new batch of up to 1k stETH can be pulled, a report about execution of the previous batch needs to be published on the forum and a new Easy Track motion shall be initiated.
Roles, Governance & Reporting
| Role | Party | Responsibilities | Constraints |
|---|---|---|---|
| Executor | Growth Committee | Executes trades directly through instructing the Liquidity Observation Lab multisig or Rewards Share multisig, or any DAO-Share-Holding Asset address or engages third-party market makers on behalf of the Lido Ecosystem BORG Foundation. Has discretion within parameters to prevent front-running. Sending part of those funds to Centralized Exchanges (CEX) is explicitly permitted under this mandate. | Must remain within the Budget, Execution Trigger threshold, and Tolerable Slippage Threshold at all times. Execution is only permitted through the Venues mentioned in this proposal. |
| Custodian | Lido Ecosystem Foundation | Holds treasury assets during execution, interfaces with CEX venues, and engages market maker relationships in a capacity on behalf of Lido DAO. | May only deploy assets for permitted uses: CEX deposits/withdrawals, swaps, and necessary execution costs. No other use of funds is authorized under this mandate. |
| Asset Owner | Lido DAO | Retains full beneficial ownership of all stETH deployed and all LDO acquired. Exercises ultimate governance authority over this mandate. | LDO acquired under this mandate may not be used for voting in any Snapshot or on-chain governance process while held by the Growth Committee or its execution addresses. |
| Oversight / Termination Authority | Lido DAO (via Snapshot / Easy Track) | May modify, pause, or terminate this mandate at any time through a Snapshot vote or object the next tranche via an Easy Track motion objection. | No minimum notice period is required, Lido DAO retains the right to recall funds at any point during the execution window. |
| Reporting Obligation | Growth Committee | Publishes on the Lido Research forum report after sale of each 1k stETH batch and before requesting another 1k stETH and confirmation that execution trigger conditions remain met. Publishes a full completion report within 14 days of program end (full execution of end of Execution Time). |
Reporting must include: total LDO acquired to date, average execution price (LDO/ETH and LDO/USD), and remaining budget. |
Potential Risks / Concerns
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Front-Run Risk
Publicly detailing the exact timing and size of a large-scale swap exposes this operation to predatory market actors.
- Mitigation: This proposal balances the need for transparency with the discretion necessary for viable execution. By allowing the Growth Committee a degree of operational flexibility, Lido DAO can execute the swap without signaling its exact moves to the market, ensuring the best possible price.
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Smart Contract / Counterparty risk
The use of various on-chain and off-chain venues introduces potential technical or vendor-related vulnerabilities.
- Mitigation: Execution will be managed by the Growth Committee, which has a proven track record of fulfilling DAO mandates. Furthermore, all venues and contracts will undergo rigorous technical due diligence by the Lido Labs BORG, Ecosystem BORG, and Alliance Foundations prior to any capital deployment. Further, the Growth Committee will negotiate terms with vendors to minimize counterparty risk where possible.
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Market Volatility
Markets are inherently volatile and the favorable LDO:ETH ratio identified in this proposal may shift during the execution window.
- Mitigation: The Growth Committee is bound by strict price and slippage thresholds defined in this mandate. If market conditions deteriorate beyond these tolerable levels, the execution will be paused to protect the treasury.
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CEX Funds Freezing / Blocking Risks
Centralized exchanges may freeze, block, or delay withdrawals of treasury assets due to compliance reviews, regulatory pressure, exchange-side operational issues, or asset-specific restrictions. This could temporarily or permanently impair access to funds deposited for execution purposes.
- Mitigation: The Growth Committee will distribute execution across multiple CEX venues rather than concentrating funds on a single exchange, reducing single-point-of-failure exposure. Batch sizing further limits the maximum amount at risk at any one time. However, it should be acknowledged that the risk of freeze cannot be fully eliminated, as it is ultimately subject to the policies and regulatory environment of each venue.
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Regulatory & Tax Compliance
Large-scale swaps can sometimes be misconstrued as market signaling or create tax liabilities.
- Mitigation: All transactions will be conducted at arm’s length and within tight spread tolerances (see Tolerable Slippage Threshold) to maintain market integrity. All transactions will be structured in accordance with applicable legal and regulatory requirements in relevant jurisdictions.
Options
Option 1: Trade stETH for LDO: Authorize the Growth Committee to accumulate LDO over a pre-defined period and under a given mandate.
Option 2: Do Nothing: Retain the stETH in the Treasury.