The governance token of decentralized staking protocol Lido Finance, Lido DAO (LDO), has surged an impressive 227% in just two weeks — rising from $0.63 on July 13 to $2.065 by July 28. This remarkable rally positions LDO as one of the top-performing cryptocurrencies during a period still widely regarded as a crypto bear market. Behind the price surge lies a combination of market anticipation, strong fundamentals, and a pivotal governance proposal that could shape Lido’s long-term sustainability.
As a leading Ethereum 2.0 (PoS) staking protocol, Lido currently manages over 4.26 million ETH — valued at approximately $6.9 billion — with participation from 89,961 unique addresses. Users who stake through Lido earn an estimated 3.9% annual yield, making it one of the most attractive and trusted liquid staking solutions in the ecosystem.
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Why Is LDO Rising Now?
While much of the broader crypto market remains subdued following the collapse of major players like 3AC and the prolonged bearish sentiment, LDO’s resurgence stands out. Several key factors contribute to this momentum:
- Anticipation of Ethereum’s Merge: The long-expected transition of Ethereum to proof-of-stake (PoS) continues to build momentum, with expectations pointing toward a September 2025 completion. As the largest liquid staking provider, Lido is poised to benefit significantly from increased network participation and validator demand post-Merge.
- Recovery of stETH Peg: After months of trading below ETH due to market stress, stETH — Lido’s staking derivative — has stabilized and regained its peg, restoring investor confidence in the protocol’s stability and liquidity.
- Governance Activity & Market Sentiment: A major governance proposal introduced by Lido’s business lead, Jacob Blish, has sparked renewed interest in the project’s long-term vision and treasury management strategy.
Lido DAO’s Treasury Diversification Proposal
On July 19, Jacob Blish submitted a governance proposal titled "Treasury Diversification for Long-Term Sustainability". The core objective? To ensure Lido Finance remains financially resilient over the next two years by converting part of its treasury holdings into stable assets.
Original Proposal Highlights:
- Sell 20 million LDO tokens via a 7-day TWAP (Time-Weighted Average Price) with a 50% premium.
- Target price at proposal: $1.452153 per LDO.
- Proceeds to be converted into DAI, a decentralized stablecoin, to fund operations and reduce exposure to token volatility.
- Split sale: 10 million LDO to Dragonfly Capital, a prominent crypto venture firm, and the remaining 10 million to other strategic investors.
- No lock-up period initially proposed; full voting rights granted upon acquisition.
This plan aimed to strengthen Lido’s operational runway while aligning with top-tier institutional partners.
Updated Proposal (July 27)
Following community feedback and market movement, the proposal was revised:
- Only 10 million LDO will be sold — exclusively to Dragonfly Capital; the second tranche is postponed indefinitely.
Purchase price will be the higher of:
- The original $1.452 price, or
- A 5% premium over the 7-day TWAP preceding the vote approval.
- If LDO trades above $2.25 during the voting period, Dragonfly reserves the right to withdraw its commitment.
- Crucially, all acquired LDO tokens will now be subject to a one-year lock-up period, addressing concerns about immediate sell pressure.
The vote commenced on UTC July 28 at 10 PM (Beijing Time July 29, 6 AM), marking a critical moment for Lido’s decentralized governance.
Addressing Community Concerns
Some community members expressed skepticism, questioning whether Dragonfly would gain an unfair advantage by purchasing LDO at a discount relative to current market prices. In response, Dragonfly emphasized its regulated status and long-standing support for decentralized protocols, stating that the intent is purely strategic — to deepen collaboration with Lido and support its growth, not to exploit pricing mechanisms.
The addition of a one-year lock-up significantly alleviates fears of short-term dumping, reinforcing trust in both the buyer’s intentions and the DAO’s governance maturity.
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Core Keywords Driving Visibility
To align with search intent and improve discoverability, the following keywords have been naturally integrated throughout this article:
- Lido DAO
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- Ethereum 2.0 staking
- LDO governance proposal
- liquid staking protocol
- stETH peg recovery
- DeFi treasury management
- Dragonfly Capital investment
These terms reflect high-interest topics among crypto investors, developers, and analysts tracking protocol sustainability and market-moving events.
Frequently Asked Questions (FAQ)
What caused LDO’s 227% price increase?
The surge was driven by multiple factors: renewed optimism around Ethereum’s upcoming Merge, stabilization of stETH’s price peg, strong protocol metrics (over $6.9B in staked ETH), and a high-profile treasury diversification proposal that signaled long-term planning by the Lido team.
Is selling LDO tokens to Dragonfly a good move for the protocol?
Yes — if approved, the sale provides Lido with stable funding for future development while partnering with a reputable investor. The one-year lock-up ensures no immediate sell pressure, aligning Dragonfly’s incentives with long-term success.
How does TWAP pricing protect the sale process?
Time-Weighted Average Price (TWAP) prevents manipulation by averaging the token price over seven days. This ensures fair valuation and protects both the DAO and buyer from short-term volatility spikes during execution.
Why convert LDO to DAI instead of holding native tokens?
By acquiring DAI, Lido reduces reliance on its own volatile token for operational expenses. This diversification strengthens financial resilience — a best practice in decentralized treasury management.
What role does liquid staking play in Ethereum’s future?
Liquid staking enables users to stake ETH while retaining liquidity via derivatives like stETH. As Ethereum transitions fully to PoS, protocols like Lido enhance capital efficiency, boost network security, and lower entry barriers for retail participants.
Could this set a precedent for other DAOs?
Absolutely. Lido’s approach — combining institutional partnerships with transparent governance and risk-mitigated treasury strategies — may serve as a model for other decentralized organizations seeking sustainable funding without centralized control.
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Final Thoughts
Lido Finance’s recent rally isn’t just speculative noise — it reflects growing confidence in its protocol strength, governance maturity, and strategic foresight. The proposed treasury diversification marks a pivotal step toward institutional-grade resilience while maintaining decentralization principles.
As Ethereum inches closer to its final Merge phase in 2025, liquid staking protocols like Lido are likely to play an increasingly central role in shaping the network’s security and accessibility. For investors and participants alike, LDO’s journey offers valuable insights into how well-designed incentives, community governance, and adaptive strategy can drive value even in challenging markets.