In Buffer Against Bear Market, Lido Opens New Door for DAO Money Management

Lido suggests selling 2% of its native token, LDO, to fund the DAO for two years

article-image

Lido LDO

share

key takeaways

  • Lido Finance has issued a new proposal to help fund the DAO for the next two years
  • Voting has not yet opened, but Dragonfly Capital could be the buyer of 2% of LDO’s total supply if the proposal passes

The Lido Finance DAO has rolled out a governance proposal to diversify the asset makeup of its treasury in an effort to serve as a buffer against current market conditions.

The plan ought to ensure the Lido DAO (decentralized autonomous organization) will have enough capital to fund operating expenses for roughly two years.

Lido suggested selling 2% of its native token, LDO, from the DAO treasury. The token will be priced at a 7-day time weighted average price (TWAP) under a 50% premium, roughly $1.45 per token. On Thursday, LDO traded around $1.50.

Digital asset-focused venture capital firm Dragonfly Capital is in the running to purchase a sizable number of tokens, according to Lido — although there are “a number of interested parties” the collective did not identify. 

Adam Cochran, general partner at venture capital firm Cinneamhain Ventures, told Blockworks he doesn’t “think the deal is adequately priced.”

“Whenever you’re buying a block of tokens from the team over the counter, you are both impacting the circulating supply and avoiding price slippage, so there is a baked-in price discount,” Cochran said.

If the proposal is approved and Dragonfly leads the buy, it could mark a new era for DAO treasury management. 

“This type of structure should have already been more common because it doesn’t make sense for your treasury to be fully in your own token,” said Mika Honkasalo, a digital asset researcher and investor. “You need to have proper runway and you can’t rely on the market always being on your side.” 

The majority of LDO’s treasury is at present made up of the organization’s native token — equating to some $237 million — according to data from Token Terminal. $366 is now held in stablecoin USD Coin. 

Despite being at odds when it comes to pricing, Cochran said the investment would be a smart move for Dragonfly as current volatile market conditions continue.

“Right now, after a collapse of a lot of speculation in the space, there is a huge incentive for investors to back projects that have a path to revenue and ownership of key infrastructure,” Cochran said. “Lido is one of a handful of projects that has both that opportunity and a product market fit, and I think the interest in these types of projects is going to continue to grow as we face uncertainty in macroeconomic conditions and as we see some of the froth come off the crypto space.” 

Voting for the proposal, which was released Monday, has not opened yet. 

“I think people are on board with a variation of [the proposal], for sure,” Honkasalo said. “If you have to raise, you have to raise. Some version of it will get passed.”


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the Forward Guidance newsletter.

Get alpha directly in your inbox with the 0xResearch newsletter — market highlights, charts, degen trade ideas, governance updates, and more.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 18 - 20, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

recent research

Research Report Templates.png

Research

An overview of the Base Ecosystem, with a focus on market leaders.

article-image

Although bitcoin hitting $120k by year’s end is looking unlikely

article-image

About 270 million HYPE has been claimed, valued around $7.6 billion

article-image

Stanford professors David Mazières and Dan Boneh will lead the lab alongside a cohort of graduate student researchers

article-image

With more companies holding BTC, bitcoin yielding strategies could become “a new corporate finance norm,” CoinShares posed

article-image

The proposal comes after Polygon governance considered a controversial use of bridged liquidity for yield

article-image

Can the community balance its decentralized ethos with the need for inclusivity and constructive debate?