Lido has unveiled NEST, an automated LDO buyback mechanism that ties protocol revenue more directly to token accumulation. Under the framework, once Lido’s annualized staking revenue rises above a $40 million baseline, 50% of the excess will be allocated to NEST and used to buy LDO automatically through CoW Swap. The system starts with a daily repurchase cap of $50,000 and a rolling 365-day cap of $10 million, calculated on a cumulative basis. If protocol revenue falls short and the running balance turns negative, buybacks will stop automatically until future revenue restores the surplus. At launch, NEST will run in Treasury mode, meaning purchased LDO will go to the DAO treasury rather than being burned. Lido also said the mechanism could later switch to an LP mode through DAO voting, where half of the funds would buy LDO and the other half would be converted into wstETH before both are deposited into a Curve liquidity pool. Backtesting by Lido showed that applying the mechanism to roughly $94.18 million in total reward revenue from 2024 to 2025 would have produced about $7.09 million in cumulative buybacks.
Lido has introduced NEST, an automated LDO buyback mechanism designed to tie protocol revenue more closely to LDO value.
Under the setup, once Lido’s annualized staking revenue exceeds a $40 million baseline, 50% of the amount above that threshold will flow into NEST and be used to buy LDO automatically through CoW Swap.
How the buyback mechanism works
NEST starts with a maximum daily buyback limit of $50,000 and a rolling 365-day cap of $10 million. The cap is calculated on a cumulative basis. If protocol revenue weakens and the cumulative balance turns negative, buybacks will pause automatically until later revenue restores the surplus.
Treasury mode at launch
At launch, the mechanism will use Treasury mode. LDO purchased through the program will go directly to the DAO treasury and will not be burned.
Lido said the mechanism could later move to LP mode if approved through a DAO vote. In that version, half of the funds would be used to purchase LDO, while the other half would be converted into wstETH. The two assets would then be deposited into a Curve liquidity pool, with the LP tokens still owned by the DAO.
Backtest result
According to Lido’s backtest, if the mechanism had been applied to about $94.18 million in total reward revenue across 2024 and 2025, cumulative buybacks would have reached about $7.09 million.
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