Lido’s buybacks won’t fix the bigger problem

Lido has introduced a $4 million/year buyback plan to enhance value for LDO holders, coinciding with its expansion beyond staking. However, the effectiveness of this buyback strategy is in question, especially given that Lido operates at a loss and only plans to buy back tokens when ETH prices and revenues are high. The current buyback amount is significantly lower compared to other protocols like Aave and Uniswap. There are ongoing concerns about BTC treasury companies, particularly Strategy, which is trading below its market net asset value (NAV), raising doubts about this investment strategy's sustainability. The slowing pace of BTC purchases by these companies has led to skepticism about their long-term viability as effective means to gain BTC exposure. Lido's roadmap aims to transition from a single-product staking business to a broader multi-product liquidity platform, acknowledging that staking is a low-margin activity. Despite these changes, serious questions remain about the immediate impact of the buyback and whether these adjustments are too late to reverse its fortunes.

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