The Lido DAO project was once at the center of liquid staking innovation, especially during Ethereum’s transition to Proof of Stake. It allowed users to stake without locking up tokens, and by 2024, it was managing billions in staked assets.
But beneath the surface of steady Total Value Locked (TVL) growth, the LDO token itself has faced persistent challenges. Price action, governance issues, and broader market pressures have pulled it into a long-term slump, despite new upgrades and a growing user base.
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What is Lido DAO (LDO)?
Lido DAO is a decentralized autonomous organization focused on providing a liquid staking option for major Proof of Stake blockchains. Since its launch in December 2020, it has been central to Ethereum’s staking ecosystem, while also supporting networks such as Solana, Polkadot, Polygon, Kusama, and Terra.
At its core, Lido allows users to stake assets while retaining access to a tokenized version of those holdings. These representative tokens are issued on a 1:1 basis and can be used across other decentralized finance platforms. For example, ETH stakers receive stETH, which acts like regular ETH but accrues staking rewards daily.
The DAO structure handles governance and decision-making. It includes members from established firms such as P2P Capital and Semantic Ventures. This structure helps to decentralize decision-making, though questions remain about real participation and centralization risks.
How the Protocol Delivers Staking Liquidity
The system works by routing user deposits through a staking pool smart contract. That contract handles deposits, withdrawals, and delegation to node operators. Once tokens are staked, Lido issues tokenized versions – like stETH – which can be used to earn additional rewards in the decentralized finance space.
There is no minimum deposit, and users are not required to lock their tokens for a fixed time. Lido collects a 10% fee from staking rewards, which helps fund development and maintenance. This model removes many barriers associated with traditional staking methods, such as illiquidity and complexity.
The tokenized rewards are usable across many dapps, creating multiple revenue opportunities for users who are active in decentralized finance. It’s a flexible alternative to standard staking that’s helped the platform grow rapidly, particularly on Ethereum.
Lido DAO Protocol Updates
In March 2025, Lido proposed a broader set of changes to expand node participation. The SSV Labs team suggested a decentralized staking module, which could open the platform to more independent operators and reduce reliance on existing groups. This follows an emergency vote earlier in the year to replace a compromised oracle.
On July 2, 2025, the DAO approved a shift to a dual-governance model. From now on, a council will manage proposals and technical changes, while token holders retain voting control over wider decisions. According to protocol advisor Hasu, the new setup “aims to improve proposal quality and guard against hostile proposals”.
Meanwhile, testing of the v3 upgrade is underway. The update introduces “stVaults” – a modular staking structure that lets users build and manage personalized staking strategies. These changes aim to improve scale and flexibility. A mainnet launch will follow once testing is complete.
Token Price Lags Behind Asset Growth
Market Behavior Suggests a Disconnect Between Platform Use and Token Value. Lido’s Total Value Locked (TVL) rose significantly over the last two years, according to DefiLlama.
Despite this, the LDO token dropped from a December 2024 high of roughly $2.23 to the current level of $0.72 at the time of writing. If that support level breaks, technical patterns suggest a possible slide toward $0.55.
Part of the problem is token dilution. Since LDO’s peak of $18.62 in 2021, the circulating supply has quadrupled. This expansion has diluted demand pressure, making it harder for prices to recover even as platform metrics improve.
Long-Term Weakness Tied to Structural Issues
Governance fatigue, regulatory uncertainty and market trends add to the trouble. Participation in Lido’s DAO governance has weakened over time. Low voter turnout has led to outcomes dominated by large early holders, raising concerns about vote centralization and reduced accountability.
Outside pressures have grown, too. In October 2024, LDO dropped 20% during a wider altcoin correction. That happened even as it launched new staking options. The broader market’s performance has had an outsized effect on LDO compared to other projects.
Uncertainty from regulators in both the United States and Europe is also clouding the outlook. Ongoing enforcement from the SEC and new rules under MiCA could limit the appeal of token-based protocols. A negative ruling could slow adoption and raise compliance costs.
