Lido reported a 23% drop in annual revenue, falling to $40.5 million as the broader Ethereum staking landscape underwent significant changes. The decline was largely driven by users withdrawing funds and a reduction in staking yields across the network.
Gross revenues also decreased, reflecting what the protocol described as “network-wide APR compression,” which has reduced returns for participants. These conditions have made staking less attractive compared to previous years, contributing to capital outflows.
Lido highlighted a broader structural shift in staking behavior. The protocol’s core segment, liquid staking tokens, has been shrinking as users increasingly move toward alternative options such as exchange-based staking and institutional-grade solutions.
Competition from newer platforms offering higher incentives has also intensified. In particular, liquid restaking providers have drawn attention by offering additional rewards through token subsidies, further pressuring Lido’s market share.
As a result, Lido noted that its dominance in the liquid staking category has weakened, with capital rotating into segments that prioritize either higher yields or lower risk.
In response to these challenges, Lido is exploring new strategies to stabilize growth. One proposal includes a potential buyback program for its native token, LDO, which could launch in the coming months. The plan would use staking rewards to purchase tokens from the open market and deploy them into liquidity pools.
The protocol has also taken cost-cutting measures, including reducing its workforce, while focusing on expanding beyond its core staking product. Future efforts are expected to target institutional investors and users seeking diversified yield opportunities.
