Lido Proposes Development Of NEST Mechanism For LDO Buybacks
John: Hey everyone, I’m John, your go-to tech blogger at Blockchain Bulletin, where I break down Web3, metaverse, and blockchain topics into easy-to-digest pieces. Today, we’re diving into Lido’s recent proposal for the NEST mechanism, which is all about setting up a system for buying back LDO tokens using treasury assets. If you’d like a simple starter guide to exchanges, take a look at this beginner-friendly overview.
Lila: That sounds interesting, John—I’ve heard about Lido in the liquid staking world, but this NEST thing is new to me. Can you start by explaining what Lido is and why they’re proposing this?
The Basics of Lido and LDO
John: Absolutely, Lila. Lido is a decentralized protocol that lets people stake Ethereum (ETH) and get stETH in return, which is a liquid token that earns rewards while staying usable in DeFi. Their governance token, LDO, allows holders to vote on decisions within the Lido DAO.
Lila: Got it—DAO means Decentralized Autonomous Organization, right? So, how does this tie into buybacks?
John: Yes, exactly (DAO is like a community-run entity powered by smart contracts). In the past, Lido has discussed ways to use its treasury, which holds assets like stETH, to benefit LDO holders directly.
Background on LDO Buybacks
Lila: What kind of discussions happened before this NEST proposal?
John: Back in 2023-05-17, there was a proposal on Lido’s governance forum to introduce LDO staking with a buyback program, aiming to share DAO revenue with token holders. This built on earlier ideas, like the 2022 dual governance system that gave stETH holders veto power. Currently, the treasury has significant assets, including over $145 million in stables and stETH as noted in recent posts on X, which aren’t generating revenue otherwise.
Lila: So, it’s evolved over time. Why push for buybacks now?
John: The idea is to return value to holders by repurchasing LDO tokens, which could reduce supply and potentially support the token’s value—though remember, this isn’t financial advice.
Understanding the NEST Mechanism
Lila: Okay, break down NEST for me—what does it stand for, and how does it work?
John: NEST is a modular system proposed by Lido to enable programmatic buybacks of LDO using stETH from the DAO treasury. It formalizes how surplus assets are allocated, allowing swaps from stETH to LDO and redirecting those tokens back to the treasury. According to the proposal on Lido’s governance channels, it’s designed to be flexible with guardrails like caps and cadence for executions.
Lila: Modular system—does that mean it’s built in parts that can be updated?
John: Precisely, it starts with a minimum viable product (MVP) and can expand. If approved, the first real-world test is planned for December 2025.
Current Status of the Proposal
Lila: Where does the proposal stand right now? Any voting updates?
John: As of 2025-09-27, the NEST proposal is open for voting on Snapshot, with a deadline of 2025-09-30. Recent news from Bitget indicates 100% support so far, based on community votes. This follows the proposal’s launch on 2025-09-25, as reported by PANews and Metaverse Post.
Lila: That’s moving fast! What happens if it passes?
John: If approved, further votes on platforms like Aragon would fund and activate it. Currently, Lido’s total value locked (TVL) is at $41 billion as of 2025-08-15 reports, which underscores the scale here.
Potential Impacts and Use Cases
Lila: How might this affect LDO holders or the broader ecosystem?
John: Looking ahead, it could increase LDO’s utility by tying it more closely to DAO revenue. For example, up to 70% of new incoming assets might go toward buybacks, as discussed in X posts from August 2025. Use cases include rewarding long-term holders and stabilizing treasury management.
Lila: Sounds practical—any tips for someone interested in getting involved?
John: Sure, here’s a quick list of steps to participate in Lido governance:
- Acquire LDO tokens through a reputable exchange (check local regulations first).
- Visit the Lido governance forum at research.lido.fi to read proposals.
- Use Snapshot for voting if you hold LDO—it’s gas-free.
- Stay updated via official Lido channels on X or their website.
- Remember, compliance varies by jurisdiction; always verify with official docs.
Risks and Safeguards
Lila: Are there any downsides or risks to this?
John: In the past, buyback mechanisms have faced scrutiny for market manipulation concerns, but NEST includes safeguards like predefined caps and community oversight. One caution: regulatory rules on tokens and DAOs differ by country, so check official guidelines. Overall, it’s designed to be transparent with modular updates to address issues.
Lila: Good to know—better safe than sorry (ha, no pun intended on staking!).
John: Exactly, and humor aside, always prioritize verified info.
FAQs and Looking Ahead
Lila: Let’s tackle some common questions—what if the vote fails?
John: If it doesn’t pass by 2025-09-30, the proposal could be revised and resubmitted, based on historical patterns in Lido governance. Another FAQ: Is NEST only for LDO? Currently, yes, but its modular nature might allow expansions.
Lila: And what’s next after the test in December?
John: Looking ahead, successful implementation could lead to regular buybacks, potentially integrating with upcoming features like Ethereum ETFs discussed in Lido’s 2025-10-16 community call. We’ll watch for updates from official sources.
John: Wrapping this up, Lila, it’s exciting to see Lido evolving with proposals like NEST to make their ecosystem more rewarding for participants. It shows how DAOs can adapt over time while staying community-driven. And if you’d like a bit more background on exchanges, you might enjoy this global guide.
Lila: Thanks, John—that cleared up a lot! Readers, keep an eye on official updates to stay informed on these developments.
This article was created based on publicly available, verified sources. References:
- Lido Proposes Development Of NEST Mechanism For LDO Buybacks | Metaverse Post
- Lido: NEST proposals, a system designed to establish the technical foundation for LDO token buybacks, are now open for voting. | PANews
- The current support rate for Lido’s proposal on LDO buyback has reached 100%, with the deadline set for September 30. | Bitget News
- Proposal: Introducing $LDO Staking – Proposals – Lido Governance
- Lido Liquid Staking – Official Site