Lido NEST Mechanism Enables Automated LDO Buybacks Up To $10M Annually

Lido DAO launches NEST to auto-buy back LDO using surplus revenue, capping annual spend at $10M with treasury-only initial mode.

Woofun AI reports that Ethereum staking protocol Lido DAO has detailed the NEST (Network Economic Support Tokenomics) mechanism, which links protocol revenue to LDO token value via on-chain automation. Funded by DAO treasury surpluses, the system automatically converts excess revenue into LDO through CoW Swap once a specific threshold is met. Initial parameters set a yearly revenue target of $40 million, with 50% of excess funds allocated for buybacks, capped at $50,000 daily and $10 million annually.

In its early phase, NEST operates in "Treasury-only mode," directing acquired tokens to the DAO treasury. Future governance votes may enable an LP mode, splitting funds between LDO purchases and wstETH conversions to provide liquidity on Curve. The mechanism incorporates risk controls including daily limits, oracle attack protection, and emergency suspension. Backtesting from 2024 to 2025 indicates potential buybacks of approximately $7.09 million, aligning with expenditure targets.