What is LDO? Lido governance rights versus stETH

LDO is the governance token of Lido DAO. It is used in decisions about protocol parameters and treasury management. Buying LDO does not stake ETH or give its holder a claim to withdraw ETH from Lido’s staking pool.

What decisions can it influence?

Lido’s description of LDO identifies protocol settings and the DAO treasury among its uses. The service provided by the Lido protocol is distinct from the token’s rights. Dual Governance also gives stETH holders a way to challenge decisions; LDO votes and stETH holdings serve different roles.

Example

Imagine Alex holds 100 LDO. Subject to the relevant vote’s rules, those tokens can contribute voting weight; they do not entitle Alex to withdraw 100 ETH. If Alex also holds stETH, the stake is represented by that separate asset. Two tokens associated with the same project need not confer the same rights.

Does protocol growth guarantee a holder return?

No automatic profit distribution follows merely from growth. Separate the governance rights described in DAO documentation from an expectation of investment returns. The Lido analysis examines revenue allocation and valuation limits; defining the token’s role is not a price forecast.