Lido launches $10M LDO buyback – But NEST may remain idle until…

Staking protocol Lido has finally activated its long-awaited automatic LDO token buyback program. The programme, also known as NEST (Network Economic Support Token), was first floated last year. 

According to the project, the program is now live on the mainnet with a daily limit set at $50K and annual purchases capped at $10M. 

It seeks to ensure automatic, dynamic LDO buybacks, taking into account prevailing market conditions. Under the NEST design, only 50% of the daily staking revenue exceeding $109K will be directed to the buyback program. 

That translates to a $40 million annual revenue baseline. Anything below that ($109K daily) means there will be no buyback. 

That said, the bought LDO tokens won’t be burned but will be owned by the DAO treasury. The program was previously criticized for being too low compared to other protocols.  

For comparison, Hyperliquid is doing about $100M in annual buyback. Aster and Uniswap run a $40M annual program while PUMP eyes $35M. Compared to LDO’s $10M annual plan, it was 3-10x smaller than other ongoing programs. 

Lido’s bumpy buyback start

That said, the current staking rewards were still below the daily average of $109K to trigger the buyback program. According to DeFiLlama, the protocol has been making around $75K in daily revenue in August.