Lido Revenue Drops 23% to $40.5 Million as Staking Outflows and Lower Yields

Ethereum staking protocol Lido reported total revenue of $40.5 million for 2025, a 23% decline from $52.4 million in 2024, attributing the drop to user withdrawals (net staking outflows) and lower staking yields driven by network-wide APR compression.

The protocol noted that its market share also declined amid a structural shift in Ethereum staking, with capital rotating away from simple liquid staking tokens (LSTs) toward exchange staking, institutional low-risk products, and restaking segments where competitors have heavily incentivized demand. Lido is exploring a token buyback program using protocol-generated staking rewards, with a potential launch in the second quarter of 2026.

Revenue Decline and Market Share Shifts

Key Drivers of Revenue Drop

Lido’s gross revenues declined 18.2% in 2025, with the organization citing two primary factors:

User withdrawals: Net staking outflows reduced the protocol’s revenue-generating base

Lower staking yields: Network-wide APR compression across Ethereum staking reduced per-unit returns

The protocol’s annual report stated: “2025 unfolded under a structural shift in Ethereum staking. Network-wide APR compression, capital rotation away from Simple LST toward exchange and institutional staking, and intensified competition reduced the size of the segment where Lido holds category leadership.”

Market Share Contraction

Lido acknowledged that its market share shrank as the Simple LST segment—historically the protocol’s strongest category—continued to decline as a share of total staking. Capital rotated toward:

• Exchange staking platforms

• Institutional low-risk staking products

• APR-focused segments where liquid restaking providers used protocol token subsidies to heavily incentivize demand

Strategic Initiatives and Token Buyback Plans

LDO Buyback Program

Lido is exploring a treasury token buyback program that would use protocol-generated staking rewards to acquire LDO tokens from the open market. Under the proposed design, purchased tokens would be deployed into an LDO/wstETH liquidity position held by the DAO. The program could launch in the second quarter of 2026.

Workforce Reduction

In August 2025, Lido reduced its headcount by 15% as part of a broader effort to “ensure long-term sustainability” and improve cost efficiency.

Product Expansion Beyond Core Staking

Institutional and High-Yield Offerings

Lido stated that its main goal for 2025 was to expand beyond its core staking product and launch new offerings targeting:

Institutional investors: Seeking low-risk, compliant staking solutions

High-yield strategies: Users seeking greater returns through restaking and other yield-generating products

WisdomTree Partnership

At the end of 2025, asset manager WisdomTree—which Lido says has approximately $140 billion in assets under management—launched an Ethereum-based exchange-traded product (ETP) in Europe that earns staking rewards using Lido’s protocol infrastructure.

Frequently Asked Questions

Why did Lido’s revenue decline 23% in 2025?

Lido attributed the revenue drop to two main factors: net staking outflows as users withdrew funds, and lower staking yields due to network-wide APR compression across Ethereum staking. The protocol also noted that its market share shrank as capital rotated toward exchange staking, institutional products, and restaking segments where competitors used token subsidies to attract users.

What is Lido’s proposed token buyback program?

Lido is exploring a program that would use protocol-generated staking rewards to purchase LDO tokens from the open market. Under the proposed design, the purchased tokens would be deployed into an LDO/wstETH liquidity position held by the DAO, with a potential launch in the second quarter of 2026.

How is Lido responding to increased competition?

Lido has reduced its headcount by 15% to improve cost efficiency and is expanding beyond its core staking product into offerings aimed at institutional investors and users seeking higher yields. The protocol has also partnered with asset manager WisdomTree, which launched an Ethereum ETP in Europe using Lido’s staking infrastructure.