Sell or stake: Ethereum staking giant Lido mulls choices for its $30M ETH

Sell or stake: Ethereum staking giant Lido mulls choices for its $30M ETH

Feb 14. 2023

By Brayden Lindrea

While LidoDAO’s current inflows of about 1000 stETH a month are sufficient to cover operating costs for the time being, it’s worried that may not last.

The decentralized autonomous organization behind Lido — the largest Ethereum staking pool — is deliberating whether it should sell or stake the $30 million in Ether (ETH) from its treasury.

A proposal was submitted on Feb. 14 by the DAO’s financial unit, Steakhouse Financial, that considers four choices, one of which contemplates staking part or all of its ETH on Lido in the form of Lido Staked ETH (stETH).

Another would see LidoDAO selling a part or all of its 20,304 ETH for a stablecoin, with the purpose being to extend the DAO’s runway.

The proposal comes as ETH staking withdrawals will soon be enabled through Ethereum’s Shanghai and Capella upgrades, which are expected to take place sometime early this year, according to the Ethereum Foundation.

While converting the ETH to Staked ETH may lead to more protocol rewards, the DAO is wary that too much staking may risk it not having enough Ether on hand “in case of need.”

Regarding operating expenses, Steakhouse Financial said it may be necessary to swap Ether for a stablecoin in order to “preemptively secure additional runway.”