Lido captured just 5.7% of Ethereum's net staking growth in the first half of 2026, even as institutional capital moved into the network through rival routes. Its automated buyback mechanism, NEST, skipped a purchase on Sept. 9 after its cumulative budget turned negative, leaving a growing staking market without a matching lift for LDO.
Institutions are staking more ETH than ever, but much of that growth is bypassing Lido. At 00:00 UTC on Sept. 9, the contract that funds NEST's purchases recorded a negative cumulative budget of about $517,024 and skipped an allocation. The funding was in place, but the rules required more cumulative surplus before a purchase could go ahead.
A growing market, a smaller share
Lido's H1 operating and financial report puts total staked ETH at 43.1 million at June 30, up from 36.3 million at the start of the year. Lido itself added 386,000 ETH over the half, reaching 9.13 million ETH from a rounded opening balance of 8.74 million. That gave it about 5.7% of the network's 6.8 million ETH increase, and its market share fell from 23.93% to 21.18%.
Lido attributes much of that dilution to institutional capital entering other routes. Its institutional segment expanded from 25.9% to 35.3% of staking during H1, with Bitmine, Coinbase and Binance holding 11.5%, 10.9% and 7.9% respectively at June 30. An institution can earn staking rewards through another provider without generating a Lido protocol fee, so network growth can benefit a rival route while diluting Lido's share of the total.
Institutions still bring business through Lido, too. On Aug. 13, Lido announced that Sharplink was deploying $200 million of ETH through its protocol, with wstETH held with Anchorage Digital. But the product mix matters for revenue: qualifying stVaults retain a 0% Lido infrastructure fee through Oct. 31, a campaign aimed at node operators running stVaults with more than 250 ETH in total value locked, favoring adoption over near-term fee income.
DAO revenue climbs, but a loss remains
Lido's effective DAO share of staking rewards rose to 6.15%, up from 4.96% in December, within an unchanged 10% protocol fee. Its unaudited H1 accounts report $27.51 million in gross staking revenue, but $15.71 million in net staking revenue after ETH price weakness cut into the dollar figures. Total net DAO revenue, including Earn, was $15.94 million.
Across the DAO and foundations, $14.33 million in foundation expenses left a $1.61 million operating surplus before a $6.06 million Kelp-related one-off produced a $4.45 million total loss. More recently, DefiLlama's Sept. 9 snapshot showed Lido revenue of $101,935 over 24 hours and $2.71 million over 30 days.
Buyback capacity still waiting on surplus
Under LIP-36, NEST subtracts a $109,589 daily reserve from tracked revenue and applies a 50% surplus share to a signed cumulative budget; when that budget turns negative, later surplus must rebuild it before spending resumes. Allocations are capped at $50,000 a day and $10 million per fixed 365-day window, though actual spending stays subject to the budget.
The allocator held about 41 stETH in the Sept. 9 data, funded by a single transfer on Aug. 28 with no outbound allocation since. That leaves the growing Ethereum staking market coexisting with a funded buyback mechanism still waiting for spendable surplus.
Source: CryptoSlate
Trading involves risk.
Risk Disclaimer
