Lido Revenue Drops 23% as Staking Outflows and Yields Fall

• Total revenue for Lido fell to $40.5 million in 2025, representing a 23% year-over-year decline from the $52.4 million recorded in 2024.
• The protocol faced a 18.2% drop in gross revenue driven by net staking outflows and a network-wide compression of Ethereum staking yields (APR).
• Lido is preparing to launch an LDO token buyback program in the second quarter of 2025 to stabilize its ecosystem and enhance liquidity.

Financial Downturn and Market Shifts

Lido reported a significant contraction in its financial performance for 2025, citing a structural shift in the Ethereum staking landscape. The protocol's total revenue slid to $40.5 million, down from $52.4 million the previous year. This downturn was primarily attributed to two factors: users withdrawing their funds from the platform and a general decline in the rewards generated by the Ethereum network, known as APR compression.

According to the organization’s annual report, the market for Simple Liquid Staking Tokens (LST), where Lido has historically been the dominant leader, began to shrink in 2024. This trend accelerated throughout 2025 as capital rotated toward alternative options, including exchange-based staking and institutional low-risk products.

Rising Competition and Restaking

The protocol noted that its market share was impacted by the emergence of high-yield competition. Specifically, investors shifted funds toward the APR-maxis segment, where liquid restaking providers utilized protocol token subsidies to attract demand. This intensified competitive environment forced Lido to re-evaluate its position as institutional and exchange-based staking services gained ground.

In response to these pressures, Lido has undergone internal restructuring. In August 2024, the organization reduced its staff by 15% to ensure its long-term financial sustainability. The protocol, which launched in 2020, aims to maintain its relevance by evolving beyond its original staking model.

Strategic Initiatives for 2025

To counter the revenue decline, Lido is focusing on institutional expansion and new product offerings. A key part of this strategy involves a partnership with WisdomTree, a global asset manager with $140 billion in assets. WisdomTree recently launched an Ethereum-based exchange-traded product (ETP) in Europe that utilizes the Lido protocol to generate staking rewards for investors.

Furthermore, Lido is proposing a token buyback program slated for Q2 2025. Under this plan, the protocol would use generated staking rewards to purchase LDO tokens from the open market. These tokens would then be paired with wstETH to provide liquidity for the DAO, potentially creating a more robust economic foundation for the protocol's governance token.