Lido's community has voted in favor of selling 1% of the project's treasury (10 million LDO tokens, or roughly $25 million) to Dragonfly Capital.
The Lido community has voted to sell 10 million LDO tokens (roughly $25 million) to Dragonfly Capital.
Lido Will Sell 10 Million Tokens
Lido will sell a portion of its treasury funds to a third party.
Dragonfly Capital, a crypto investment fund, will buy 1% of the tokens contained in Lido’s DAO treasury.
The sale was approved almost unanimously. 60 million LDO were used to vote in favor of the plan, amounting to 99.09% support. Just 553,000 LDO were used to vote against the plan, representing 0.91% opposition to the proposal.
Dragonfly has committed to a purchase price based on a time-weighted average price (TWAP) plus a premium. There will be a one-year lockup before tokens become liquid.
Dragonfly had the ability to withdraw from the deal when LDO prices surpassed $2.50 during the voting period but did not do so. Jacob Blish of Lido said, “Dragonfly has committed to the terms and will not enact the veto clause.”
Tom Schmidt of Dragonfly also confirmed the deal will continue, noting that the firm is “excited to proceed with the proposal.”
The voting period ran between July 28 and August 4. It will now move to an on-chain vote on the DAO platform Aragon.
Last month, a similar vote was unsuccessful, as voters were not satisfied with the terms of the sale—namely quoted prices and a lack of a vestment requirement. That deal would also have seen Dragonfly buy 2% of the treasury’s supply instead of 1%.
The sale is intended to diversify Lido’s holding by raising funds in the form of stablecoins. The original proposal was expected to secure two years of operating runway for the Lido DAO.
The vote follows other high-profile decisions. Earlier this year, Lido considered limiting the amount of Ethereum that could be staked on the platform, though the community overwhelmingly decided against this, and the proposal did not pass.
Lido is also considering granting voting rights to staked ETH (stETH) holders alongside LDO holders. This proposal has not been voted on yet and is still under development.
Disclosure: At the time of writing, the author of this piece owned BTC, ETH, and other cryptocurrencies.
