Lido, a leading Ethereum staking solution, has submitted a new treasury diversification proposal on its governance forum. The proposal aims to address short-term operational challenges while securing stable funding for the next two years.
Key Details of the Proposal
- Token Sale Volume: 20 million LDO (2% of total supply)
- Price Per Token: $1.452153 in DAI stablecoin
- Total Transaction Value: 29,043,051.43 DAI
- Buyers: Dragonfly Capital and other strategic participants
- Voting Rights: Immediate full voting power upon completion
- Execution Timeline: Proposed for next week pending DAO approval
Allocation Breakdown
- Dragonfly Liquid receives 10 million LDO (1% of supply)
- Other strategic participants receive remaining 10 million LDO
- Exact distribution to be approved by DAO
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Context Behind the Proposal
The crypto market turmoil during May-June 2022 significantly impacted Lido:
- Massive stETH sell-offs by institutions including Three Arrows Capital
- Sharp decline in LDO token value
- Emergency sale of 10,000 ETH to address liquidity concerns
- Ongoing community concerns about treasury management
With Ethereum's Merge approaching, Lido's community appears proactive in managing assets. Despite some concerns about the lack of lock-up periods for purchased tokens, preliminary sentiment suggests broad support for the measure.
Remarkable LDO Price Performance
The proposal comes amid exceptional market performance:
- July 12 Price: $0.5858
- Current Price: $1.4957
- 7-Day Growth: 154.35%
This unprecedented surge likely contributes to the timing urgency behind the proposal.
Frequently Asked Questions
Why is Lido selling treasury tokens now?
The sale aims to stabilize operations during market volatility while capitalizing on current favorable pricing to secure long-term funding.
Who benefits from this token sale?
Both the protocol (through treasury diversification) and participating institutions (through governance influence) stand to benefit.
What happens to the voting rights?
Purchased tokens will carry immediate full voting power, which has drawn some community discussion about potential governance impacts.
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How will this affect LDO's market price?
While difficult to predict, such large institutional purchases could create buying pressure, though the market has already partially priced in this news through the recent surge.
What safeguards exist for community interests?
The DAO maintains approval authority over final buyer selection and distribution specifics.
Why no lock-up period?
The proposal argues for immediate liquidity to address pressing operational needs, though some community members suggest adding vesting schedules.
Final Considerations
This strategic move represents Lido's proactive approach to:
- Treasury management
- Institutional partnerships
- Long-term protocol sustainability
The coming week's DAO vote will determine whether this ambitious proposal moves forward as the Ethereum ecosystem prepares for its historic transition to Proof-of-Stake.