Lido Slashes 15% of Team to Adapt as Ethereum Institutions Go Private

Ethereum’s largest liquid staking protocol, Lido, has announced a 15% workforce reduction as part of a strategic realignment to ensure long-term sustainability. The announcement, made by co-founder Vasiliy Shapovalov on August 4, affects core contributors across Lido Labs, Lido Ecosystem, and Lido Alliance.

“The decision was made to increase resource efficiency—not due to performance,” Shapovalov stated, noting the move will help Lido focus more intensively on validator decentralization and protocol-level innovation.

Despite the layoffs, Lido remains financially healthy, with TVL surpassing $32.59 billion, maintaining its lead in Ethereum liquid staking. Public estimates place its annualized revenue between $44.68 million and $90 million, derived from protocol fees and treasury yields.

The move comes amid a broader rebound in the Ethereum market. Following sustained accumulation by institutional investors—including ETFs and crypto-native treasuries—ETH prices have returned to the $3,700 range, marking a recovery from prior bearish sentiment. Lido appears to be leveraging this momentum to double down on its infrastructure roadmap.

Its recent v3 protocol upgrade, which introduced modular “stVaults” smart contracts, is designed to expand composability and enable more customizable staking products. These features aim to enhance Lido’s competitiveness as Ethereum staking evolves.

Following the announcement, LDO saw a modest uptick to around $0.90. While price movement remained relatively flat, 24-hour trading volume surged by over 15%, exceeding $65 million, suggesting heightened trader interest despite the stable price.

However, community voices have raised concerns about a growing institutional shift away from open DeFi staking protocols. While Lido and similar projects are streamlining costs, many of the current market leaders—such as ETF issuers and large ETH holders—are opting for customized staking solutions, often via centralized custody or private validator networks. Institutions like BMNR and SBET have reportedly moved portions of their ETH staking to providers like Anchorage Digital or Coinbase, while some ETFs prefer offline or internal staking setups, bypassing public protocols entirely.

Some community members have warned that while Ethereum may continue to gain institutional favor, the DeFi protocols built atop it—especially those from earlier cycles—could be sidelined. This sentiment, expressed by analyst @_FORAB, reflects growing concerns that each new market cycle tends to promote its own preferred infrastructure, often leaving older protocols out of the spotlight.

Still, Lido remains committed to its decentralization roadmap. With a strong governance framework and a well-capitalized treasury, the protocol is positioned to adapt to changing market dynamics. Its upcoming priorities—particularly in supporting decentralized validator sets—will be closely watched as Lido navigates this evolving staking landscape.