LidoDAO is considering selling or staking its $30 million
Zach Anderson Feb 17, 2023 09:21
LidoDAO, the decentralized autonomous organization behind Lido, is considering staking or selling its $30 million ETH treasury to meet unexpected market swings.
The decentralized autonomous organization that is responsible for Lido, which is the biggest Ethereum staking pool, is now debating whether or not it should stake the $30 million in Ether (ETH) that is currently in its treasury or sell it.
Steakhouse Financial, the financial arm of the DAO, put out a proposal on February 14 that examines four potential courses of action. One of these options is the possibility of the DAO staking some or all of its ETH to Lido in the form of Lido Staked ETH (stETH).
Another possibility involves the LidoDAO selling some or all of its 20,304 ETH in exchange for a stablecoin. This would be done with the intention of extending the DAO's runway.
The suggestion comes at a time when ETH staking withdrawals will soon be possible via Ethereum's Shanghai and Capella upgrades. According to the Ethereum Foundation, both upgrades are scheduled to take effect at some point in the beginning of this year.
Although changing the ETH to Staked ETH might result in an increase in the number of protocol awards, the DAO is mindful of the possibility that excessive staking could result in the organization not having sufficient Ether on hand "just in case."
Steakhouse Financial said that in order to "preemptively secure more runway," it may be required to exchange Ether for a stablecoin. This statement was made with reference to operational expenditures.
With the price of ETH fluctuating between $1,100 and $1,700 over the last few months, Steakhouse Financial observed that with LidoDAO's current inflows at roughly 1000 stETH each month, the DAO is producing about $1.3 million to 1.5 million per month.
According to Steakhouse Financial, the numbers should be "sufficient to pay monthly operating expenditures" on their own.
However, they are currently considering whether or not it would be beneficial to convert their surplus of stETH into a stablecoin in order to better prepare themselves for any changes in market circumstances that may result in higher operational expenditures.
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