Lido interprets the NEST mechanism: in the initial phase, it will adopt the "financial treasury model," and in the future, it will switch to the LP model through on-chain voting

The Ethereum staking protocol Lido DAO officially interprets the NEST (Network Economic Support Tokenomics) mechanism, which binds the protocol's revenue to the value of LDO tokens through an on-chain automated method, achieving continuous LDO buybacks. The aim is to allow LDO holders to more directly share in the protocol's growth profits. This mechanism is supported by the surplus funds of the DAO treasury. When Lido's staking business revenue exceeds the set benchmark, a portion of the excess revenue will be automatically exchanged for LDO through CoW Swap.

According to the initial parameters set by Lido DAO, the NEST revenue benchmark is an annualized $40 million (approximately $109,000 daily), with 50% of the excess allocated for LDO buybacks, a daily buyback limit of $50,000, and a cumulative limit of $10 million over 365 days. Buybacks are executed daily using a permissionless on-chain process.

In the initial phase of NEST, a "Treasury-only mode" will be adopted, where purchased LDO will go directly into the DAO treasury. In the future, when market conditions are favorable, the DAO can switch to LP mode through on-chain voting, using half of the funds to purchase LDO and converting the other half into wstETH to provide Curve liquidity.