@LidoFinance ($LDO) is DeFi’s largest protocol by assets held, but its governance token ranks much lower by market cap. The gap highlights how little of a protocol’s activity may accrue to the token that governs it.
According to DefiLlama data, Lido holds close to $20 billion in staked assets, more than any other DeFi protocol.
Among liquid staking protocols tracked by DefiLlama, Lido ranks #1 by TVL.$LDO trades at $0.31, giving it a market cap of about $257 million and a rank of 144th. The protocol’s assets are worth more than 75 times the value of its token.
Most Rewards Go to Stakers
The protocol’s size does not translate into large earnings for Lido itself. In the third quarter, Lido received $128 million in staking rewards and paid $121 million to stakers and node operators, leaving about $7 million in earnings.
The structure explains part of the gap.
$LDO is Lido’s governance token. Holders vote on how the protocol operates and spends its fees. It is separate from stETH, has a supply of 1 billion and earns no staking rewards.Staking rewards go to holders of stETH, the token Lido issues for staked ETH, rather than to $LDO holders.
DefiLlama’s current figures point to continued pressure on fees.
Over the past 30 days, Lido generated $55.96 million in fees, including $3.4 million in protocol revenue.Buybacks Step Up, but Remain Small
Lido spent $5.1 million buying back $LDO in the third quarter, up from about $2 million in the previous quarter. The purchases are small relative to the token’s market value. The DAO has also considered larger measures.
In March, it proposed spending up to 10,000 stETH, worth roughly $20 million at ether prices near $2,000, to buy its own governance token, which it described as historically depressed in value.That proposal was reported by CoinDesk.
A separate automated buyback, called NEST, is linked to protocol revenue.
It buys only when annual fees exceed $40 million.That threshold limits how much revenue can flow back to the token when fees are low.
For $LDO holders, the key question is whether buybacks can grow enough to narrow the gap between the protocol’s scale and the token’s valuation. For now, the data show a protocol with substantial assets but low retained earnings.
Sources
DefiLlama: Lido protocol TVL, revenue and fees
CoinDesk: Lido DAO proposes a $20 million $LDO buyback
Phemex Academy: What Is Lido DAO ($LDO)?
