Lido, a prominent Ethereum staking provider, has tabled a proposition for introducing a staking mechanism for its inherent LDO token. This move is geared towards enhancing the token’s utility and ensuring its fiscal sustainability.
Detailed on Lido’s governance forum on May 17, the proposed staking arrangement would allow LDO token possessors to commit their tokens into staking. In return, they would be entitled to a proportionate share of Lido’s prospective profits, estimated to fall within the range of 20-50%.
The author of this proposal, actively participating in the Lido community, identifies themselves as Lidomaxi.
Lido, a well-known Ethereum staking service, has put forth a new staking framework for its native LDO token. The initiative aims to amplify the token’s functionality and fortify its economic viability.
Unveiled on Lido’s governance forum on May 17, this staking blueprint proposes that LDO token holders stake their tokens. By doing so, they would secure a corresponding share of Lido’s future revenues, projected to be between 20-50%.
This proposal was presented by a Lido community enthusiast who goes by the pseudonym, Lidomaxi.
In the proposal’s overview, Lidomaxi highlighted Lido’s remarkable evolution over time. He noted its transformation “from an early-stage DeFi protocol to the dominant leader in the liquid staking arena.”
Lidomaxi pointed out a significant concern: “Even with Lido’s accomplishments, LDO token holders aren’t directly reaping the benefits from the revenue the protocol generates. Furthermore, the $LDO token lacks immediate utility.” This sentiment, he emphasized, stands as a major point of contention for both existing and potential token investors.
In advancing this proposal, Lidomaxi’s objective was not only to spotlight these challenges but to also “initiate a dialogue and suggest a tangible remedy to address the utility and value-appreciation challenges confronting LDO.”
Community in favor
Feedback from the community on the proposal was largely positive. Several voices from the forum expressed support, with one member stating, “there’s undoubtedly a solid argument for a model like this.”
Another member voiced their agreement, emphasizing, “It’s crucial to interlink the LDO token’s value with the success of the protocol. Adopting a revenue-sharing mechanism, as demonstrated by numerous other protocols, is the way forward.”
However, market reactions displayed some volatility. Following the unveiling of the proposal last Wednesday, LDO’s price experienced an upswing. Yet, this was short-lived, as it soon entered a downward trajectory.
From its pinnacle at $2.56 on the previous Wednesday, by Monday, LDO had plunged by nearly 20%, settling at about $2.06 at the time of reporting.