I noticed an interesting move by Lido DAO. They are seriously considering spending around $20 million from the treasury to buy back their own governance token, LDO. At first glance, it sounds like a classic move to support the price, but there’s a deeper story behind it.

The fact is, the gap between how the token is traded and what’s actually happening with the protocol is simply huge. LDO has fallen more than 95% from its 2021 peak when it was worth $7.30. It’s now trading around $0.33 with a market capitalization of approximately $283 million. Meanwhile, Lido itself is the largest liquid staking protocol on Ethereum, controlling about 23% of all staked ETH, generating steady fees, and even improving the protocol’s efficiency.

The DAO proposal explicitly states: this is not an ordinary price fluctuation. It’s one of the largest discrepancies between market valuation and fundamental metrics in the token’s history. The LDO to ETH ratio has dropped 70% below levels maintained for most of the past two years, while the protocol’s net rewards have only decreased by 20%.

Technically, the plan looks like this: they want to buy tokens in batches of 1,000 stETH through major centralized trading platforms, since on-chain liquidity is minimal — only about $90,000 with a plus-minus 2% depth. A single large trade can easily shift the price by 2%, so the buyback needs to be dispersed. Each batch will require a separate vote via Easy Track — a mechanism for routine operations with a three-day objection period.

In the end, this could remove about 8% of the circulating token supply at current prices. It sounds like an attempt by the DAO to reframe dislocation as an opportunity to buy. The question is whether the market will ever start valuing DeFi governance tokens based on the protocol’s actual performance rather than just speculation. For Lido, that would be fair — the protocol clearly deserves a higher valuation.