A new proposal within the Lido community governance forum has sparked significant discussion. It suggests introducing an LDO token staking module and a token buyback program. The core idea is to allow LDO holders to stake their tokens and receive a share of the Lido DAO's revenue through a structured buyback and distribution system. This initiative is fundamentally designed to enhance the LDO token's utility and its ability to capture value for its holders.
The proposal outlines a plan to allocate between 20% and 50% of the Lido DAO's future revenue—with the exact percentage to be determined by governance—to stakers on a weekly basis. Proponents argue that the DAO's estimated annual operational costs are around $16 million. Given the current depth of the Lido treasury, they estimate it has sufficient funds to operate for approximately 17.5 years, suggesting that redirecting revenue to stakers would have minimal to no impact on ongoing operations.
Data from Tokenterminal highlights Lido's dominant position as the largest liquid staking protocol within the Ethereum ecosystem. Its protocol revenue is substantial, even surpassing that of entire networks like BNB Chain and Polygon. Consequently, introducing a profit-sharing model for LDO is a highly anticipated development for many token holders.
Lido DAO Financial Team Highlights Treasury Concerns
It is important to note that this proposal is still in its early stages, and the community has not yet reached any preliminary consensus. In response to the initial post, Steakhouse Financial, the financial working group for Lido DAO, provided a critical comment. They pointed out that it is not realistic to consider the treasury's holding of 280 million LDO tokens as part of the future operational budget.
The treasury's liquid assets currently consist of:
- 20,000 ETH
- 10,700 stETH
- 10.3 million DAI
- 2.3 million USDT
This combines for a total value of approximately $68 million. Furthermore, the already approved budget expenditures for the remainder of the year have reached $24 million. A significant portion of these funds is allocated to auditing and further developing Lido v2, including critical upgrades like the Staking Router and Dual Governance. This indicates that the actual operational costs are considerably higher than what was initially suggested in the proposal.
Despite these concerns, Steakhouse Financial did not outright reject the idea. They concluded their remarks by stating:
"We look forward to a fruitful discussion on this interesting proposal. We will also give it some thought and come up with our perspective."
Broader Implications of Profit-Sharing Models
The introduction of a profit-sharing or token buyback model can significantly bolster a token's value narrative. However, this approach is often met with skepticism within governance forums across various protocols. Common concerns extend beyond potential regulatory risks.
Many community members argue that capital is better spent on strategic growth, especially while a protocol is still in its early expansion phase. Diverting profits to token holders too soon could potentially hamper future development, innovation, and the overall long-term health of the protocol. The debate often centers on finding the right balance between rewarding current stakeholders and investing in the ecosystem's future.
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Frequently Asked Questions
What is the core of the new Lido proposal?
The proposal suggests creating a system where LDO holders can stake their tokens to earn a share of the Lido DAO's revenue. This would be funded by using 20-50% of protocol income to buy back LDO tokens and distribute them to stakers.
Why are there concerns about this proposal?
The Lido DAO's financial team, Steakhouse Financial, has raised concerns about the realism of the financial assumptions. They note that the treasury's liquid assets are less than initially perceived and that approved development budgets are already high, meaning diverting revenue could impact funding for crucial upgrades.
What are the potential benefits of a token buyback plan?
A buyback and staking rewards plan could directly enhance the value and utility of the LDO token for holders. It provides a direct mechanism for value capture, potentially making the token more attractive to long-term investors.
Does this mean LDO stakers will get payments soon?
No, this is only a proposal in the very early discussion phase. It has not been voted on or approved by the Lido DAO. The community must first debate the details, and a formal governance vote would be required for implementation.
What is the main argument against implementing this now?
The primary counter-argument is that protocol funds should be prioritized for growth and development, especially for a leading protocol like Lido that is still innovating. Some believe distributing profits too early could slow down expansion and technological advancement.