Lido DAO launches NEST automated LDO token buyback mechanism

Lido DAO has launched the Network Economic Support Tokenomics (NEST) automated buyback mechanism on its mainnet. The program is designed to address the valuation gap between the protocol’s earnings and the performance of its LDO governance token, which has seen a significant decline in value since 2021.

Under the new rule-based system, NEST monitors Lido’s annual staking revenue against a $40 million baseline. When revenue exceeds this threshold, 50% of the surplus is automatically allocated to purchase LDO tokens on the open market via CoW Swap. To prevent market distortion and protect treasury resources, the mechanism includes a daily purchase cap of $50,000 and a total annual limit of $10 million.

The program currently operates in “treasury-only mode,” meaning all acquired LDO tokens are held within the DAO treasury. While a future liquidity provider (LP) mode could allow these tokens to be paired with wstETH in liquidity pools, that remains a separate governance decision. The use of CoW Swap’s batch auctions is intended to provide MEV protection and prevent front-running during the automated purchases.