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Lido's staking machine is still the biggest in Ethereum$1,686.33, it is just making less money doing it. Because of course that is how "market leadership" looks in 2026.
Lido's 2025 annual report put protocol revenue at $40.5 million, down from $52.4 million in 2024, a 23% year over year decline. [1] The foundation pinned the drop on rewards compression, meaning lower staking yields across the network, plus net withdrawals from Lido as the staking market reshuffles toward bigger distribution pipes like exchanges and institutional wrappers. [2]
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The numbers: share intact, flows not so much
Ethereum$1,686.33 staking demand has not exactly collapsed. Recent figures show a record 30.7% of Ethereum$1,686.33 supply staked, about 38.2 million ETH. [2] The driver, per Lido's commentary and market data, is the steady institutionalization of staking: spot Ethereum ETFs and treasury-style vehicles increasingly route staking through regulated, bundled products that can "turn on yield" for end investors.
Lido, however, is not capturing that marginal demand the way it used to. Dune dashboards tracking validator deposits and exits show Lido leading staking outflows in March 2026, with roughly 310,000 ETH leaving the protocol that month. [2]
And yet the crown stays on. Lido still holds about 24% of the staking market, roughly 8.8 million staked ETH, keeping it the largest single staking provider even while capital rotates elsewhere.
Why revenue fell even as staking hit records
Two forces can be true at once:
- Network-wide APR fell. When baseline staking yields compress, Lido's fee take shrinks even if headline staked ETH remains large.
- The "simple liquid staking token" lane got crowded. Lido explicitly called out a shift away from straightforward liquid staking toward exchange staking and institutional channels, which compresses growth in the exact segment where Lido historically dominated.
Translation: Ethereum staking expanded, but the easiest on-ramps increasingly belong to venues that already own the customer relationship.
Lido's 2026 plan: distribution and product mix
Lido says it will lean harder into segments where it can still win flows, not just mindshare. Priorities flagged for 2026 include: [3]
- Institutional distribution, including productized exposure such as WisdomTree Physical Lido Staked Ether$2,048.77.
- Expansion of Lido Earn, positioned as a lower-risk staking route for certain users.
- Scaling the validator marketplace, which is Lido's attempt to broaden the operator set and improve resilience while keeping its staking UX sticky.
LDO's problem: protocol success has not meant token success
Lido also signaled renewed focus on tighter economic alignment between protocol performance and Lido DAO$0.3362, the governance token. The most concrete mechanism under discussion is an automated buyback funded by a "treasury surplus fund." The concept was floated in late 2025 with an annual buyback budget of about $10 million, with a formal plan expected in Q2 2026. [4]
Markets are not handing out participation trophies here. Lido DAO$0.3362 traded around $0.299 at the time of reporting, down roughly 80% from its H2 2025 peak near $1.50.
Takeaways
- Lido remains Ethereum's largest staking provider by share (24%), but it is battling persistent outflows and tougher distribution economics.
- Revenue fell 23% in 2025 as staking yields compressed and flows shifted toward exchange and institutional staking routes.
- Token mechanics are back on the table, with a buyback structure expected to be clarified in Q2 2026.
What to watch next
- Q2 2026 details on buybacks: size, triggers, and whether "surplus" is defined in a way that survives bad quarters.
- Net flow trendline: whether Lido can slow or reverse outflows as ETFs and institutions scale staking allocations.
- Share stability vs. slow bleed: a 24% share is huge, but month-by-month exits (like March's 310,000 ETH) will matter more than brag charts if yields stay compressed.
