Lido Explains NEST Mechanism: Will Adopt "Treasury Mode" During Initial Launch Phase, Switch to LP Mode via On-Chain Voting in the Future

TechFlow News, August 14, Ethereum staking protocol Lido DAO officially published an article interpreting the NEST (Network Economic Support Tokenomics) mechanism, which binds protocol revenue with LDO token value through on-chain automation to achieve continuous LDO buybacks, aiming to allow LDO holders to share protocol growth revenue more directly. The mechanism is funded by DAO treasury surplus; when Lido staking revenue exceeds the set benchmark, part of the excess revenue will be automatically exchanged for LDO via CoW Swap.

According to the initial parameters set by Lido DAO, the NEST revenue benchmark is an annualized $40 million (approximately $109,000 per day). 50% of the excess portion will be used to buy back LDO, with a daily buyback limit of $50,000 and a 365-day cumulative limit of $10 million. Buyback execution is conducted daily using a permissionless on-chain process.

During the initial launch phase, NEST will adopt "Treasury-only mode", where purchased LDO will go directly into the DAO treasury. In the future, when market conditions are suitable, the DAO can switch to LP mode via on-chain voting, using half of the funds to purchase LDO and the other half to convert to wstETH and provide Curve liquidity.