Lido Activates LDO Auto-Buyback with $10M Annual Limit

Lido launches NEST mechanism, allocating 50% of earnings over $40M to buy LDO via CoW Swap. Initial phase stores tokens in DAO treasury rather than burning them.

Woofun AI reports that Lido has activated the NEST mechanism for automatic LDO buybacks, linking protocol revenue to token value. When annual staking earnings surpass $40 million, 50% of the excess funds are directed to NEST for purchasing LDO through CoW Swap. The system imposes a daily cap of $50,000 and a rolling 365-day limit of $10 million. Buybacks pause if cumulative balances turn negative due to insufficient earnings. Currently operating in Treasury mode, acquired LDO is stored in the DAO treasury rather than being burned. Future DAO votes may enable LP mode, splitting funds between LDO purchases and wstETH conversions for Curve liquidity pools. Backtesting indicates this mechanism would have generated approximately $7.09 million in buybacks from $94.18 million in rewards between 2024 and 2025.