Lido DAO emulates Uniswap by proposing a buyback plan, and the "anti-cyclical" design can enhance LDO liquidity.

Following Uniswap's announcement of a token buyback proposal of up to $450 million, Lido DAO has also proposed its own version. Although the scale is only about $10 million, Lido's combination of the “anti-cyclical (” buyback and a new mechanism for the “liquidity pool” is expected to find a balance between maintaining token value and improving trading depth.

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Uniswap fires the first shot in buyback, Lido DAO follows closely behind.

The DeFi protocols have sparked a trend of token buybacks in the past six months. Following yesterday's announcement by Uniswap of a buyback plan of up to $450 million for UNI per year, Lido DAO also released a proposal this week to buy back LDO tokens in the market using a portion of the protocol's revenue.

In contrast, Lido's project scale is relatively conservative, with an annual cap of only 10 million USD, and the estimated actual expenditure is about 4 million USD. This means it focuses more on mechanism design and capital efficiency, rather than simply large purchases.

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How to repurchase? The “counter-cyclical” model emphasizes long-term stability.

Lido's revenue comes from the transaction fees generated by users staking ETH, and this income mainly exists in the form of stETH.

The proposer Steakhouse Financial stated that buybacks will only occur when ETH prices are high and income is abundant, allowing the DAO to allocate more value during bull markets while automatically tightening expenses during bear markets to avoid overconsumption.

The conditions for initiating the buyback are as follows:

ETH price is above $3,000.

Annual income exceeds 40 million dollars

The impact of a single transaction on the LDO price must not exceed 2%.

12-month rolling cap of 10 million USD.

This makes Lido's buyback a “反循環 )anti-cyclical(” model: the stronger the bull market, the more buybacks there are; in a bear market, it automatically slows down.

Solve liquidity bottlenecks: Directly inject into LDO/wstETH liquidity pool after repurchase.

Compared to other projects that only “buy back and burn”, Lido's proposal goes further by combining liquidity supply )LP( mechanisms.

On a technical level, the DAO will utilize the NEST ) internal automation framework ( to regularly purchase LDO with stETH, and then pair it with an equivalent amount of wstETH, depositing it into the Uniswap v2 pool to form the LDO/wstETH LP.

There are three purposes for doing this:

Enhance on-chain liquidity depth, reduce slippage and market impact during DAO buybacks.

Lock the repurchased LDO in the liquidity pool, effectively reducing the market circulation.

Generate transaction fee revenue for the DAO, allowing buybacks to yield long-term benefits.

This design is inspired by MakerDAO's Smart Burn Engine, but emphasizes maintenance-free and automated execution, with the LP positions fully managed by smart contracts.

The proposal emphasizes that the goal of this strategy is not short-term trading, but to create an automated buyback mechanism that can operate long-term, with low intervention, and strengthen the stability of the Token value.

Lido DAO keeps up with the buyback trend, and the effectiveness of the strategy awaits evaluation.

The Keyrock report indicates that before July this year, the top 12 DeFi protocols invested a total of $800 million in buybacks and income distribution, which is an increase of over 400% compared to the beginning of the year. Now, the proposal from Lido DAO will also be included.

If the final DAO vote passes, Lido will launch this buyback mechanism in the first quarter of 2026, which is expected to provide stable support for the price of LDO Token.

This article discusses how Lido DAO emulates Uniswap by proposing a buyback plan, with the “anti-cyclical” design enhancing LDO liquidity, first appearing in Chain News ABMedia.