Lido’s buybacks won’t fix the bigger problem

Lido recently introduced a buyback plan valued at approximately $4 million per year and aims to expand beyond just staking. As the market faces pressure, with BTC and tech stocks declining, scrutiny has emerged around companies using treasury models for BTC accumulation. Specifically, Strategy (MSTR) and similar entities have seen their market valuation drop below their net asset value (mNAV), raising questions about the sustainability of this model. BTC purchases by treasury firms have significantly reduced, reflecting a broader skepticism among investors. In this context, Lido's buyback mechanism, which is contingent on favorable conditions regarding ETH pricing and revenue, might lack effectiveness, especially in downturns. However, Lido plans to evolve into a multi-product liquidity platform with a roadmap to enhance its offerings. Nevertheless, concerns remain about Lido's profitability, with its recent quarterly income reflecting a loss, leading to doubts about the impact of the buyback strategy. Overall, while Lido's efforts signify a shift, the broader challenges in the crypto market and the structural issues facing Lido could hinder its success.

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