Ethereum staking protocol Lido reported Tuesday that its annual revenue declined significantly in 2025. The organization attributed the drop to user withdrawals and a compression in network-wide staking yields. This financial result marks a challenging period for the decentralized finance infrastructure provider.
According to the annual report published by the protocol, total revenue fell to $40.5 million. This figure represents a 23% decrease compared to the $52.4 million recorded in 2024. The financial performance reflects broader trends affecting the liquid staking sector during the year.
Lido stated that gross revenues dropped 18.2% due to net staking outflows and lower returns. The organization highlighted that capital rotation away from Simple Liquid Staked Tokens impacted their primary segment. Network-wide APR compression further reduced the profitability of staking activities.
The protocol noted that its market share shrank as the competitive environment evolved. Historically, the Simple LST segment served as Lido’s strongest category before contracting in 2024. This decline continued as a share of total staking throughout 2025.
Competitors included exchange staking platforms and institutional low-risk staking providers. Liquid restaking providers also emerged by heavily incentivizing demand with protocol token subsidies. These factors intensified competition and reduced the size of the segment where Lido holds category leadership.
To address financial pressures, Lido is exploring a token buyback program potentially launching in the second quarter. The proposed design would use protocol-generated staking rewards to acquire LDO from the open market. These tokens would then deploy into an LDO/wstETH liquidity position held by the DAO.
Cost management measures included reducing headcount by 15% last August. The protocol implemented this reduction to ensure long-term sustainability amidst the revenue decline. Lido debuted on Ethereum in 2020 to allow users to maintain liquidity with staked ETH.
Strategic goals for the coming year involve expanding beyond the core staking product. Management aims to launch new offerings targeting institutional investors and users seeking higher yields. WisdomTree recently introduced an Ethereum-based exchange-traded product using the decentralized Lido protocol in Europe.
The broader implications suggest a maturation of the Ethereum staking ecosystem. Investors will watch how Lido adapts to shifting capital flows and regulatory environments. Future developments in institutional adoption will likely dictate the protocol’s trajectory in the next fiscal year.
