Lido Launches Vaults and Earn Products as Staking Yields Compress

Lido’s total revenue fell 23% year-over-year to $40.5 million in 2025. The decline was driven by staking outflows and declining staking yields. The Simple LST segment, once a key revenue source, continued to contract in 2025.

Staking yields have compressed as users shifted capital to alternative staking products and higher-yielding opportunities. Lido’s market share has also declined as a result of these trends. The organization is exploring ways to stabilize its revenue, including a token buyback program.

To address the decline, Lido has launched new products like yield vaults, structured yield offerings, and institutional wrappers. These products aim to diversify revenue streams and cater to both retail and institutional investors. The new initiatives are part of a broader expansion strategy.

Why Did Lido’s Revenue Fall So Sharply?

The 23% decline in revenue was primarily due to lower staking yields and capital outflows from the Simple LST segment. Staking yields have been under pressure due to increased competition and broader Ethereum staking trends. These factors led to a shift away from Lido's core product.

Lido’s Simple LST segment, which was a major revenue driver, saw capital migration to other staking options. These include exchange staking and institutional low-risk staking, where providers offer additional incentives. As a result, Lido's market share has shrunk in this space.

The broader staking landscape has evolved with new incentives and yield-optimized solutions. This shift has made it harder for Lido to retain users who are now prioritizing yield over brand loyalty.

How Is Lido Responding to the Revenue Decline?

Lido is exploring a token buyback program using protocol-generated staking rewards. The goal is to reduce the supply of LDO and potentially stabilize or increase its value. This strategy could also create a more stable foundation for future revenue.

The organization has also launched new products to expand beyond its core staking offering. These include yield vaults, structured yield products, and institutional wrappers. The aim is to attract both retail and institutional investors looking for higher returns.

In 2026, Lido plans to continue refining its infrastructure with upgrades like Curated Module v2 and Staking Router v3. These updates will support a wider range of custody and compliance needs. This move reflects Lido's strategy to build modular infrastructure for institutional operators.

What Are Analysts Watching Next?

Lido’s new structured yield products, EarnETH and EarnUSD, are now live and targeting retail DeFi users and stablecoin holders. These products are part of a broader effort to expand into real-business DeFi. Their performance will be a key indicator of Lido’s ability to diversify its offerings.

In the institutional space, Vaneck filed an S-1 for a Lido Staked ETH ETF with the SEC in October 2025. This filing marks a potential milestone in bringing staked ETH to traditional investors. WisdomTree also launched a Physical Lido Staked Ether ETP in Europe in December 2025.

Lido’s $60 million operating budget for 2026 is a clear signal of its commitment to expanding beyond staking. The budget includes allocations for core operations, growth, and discretionary spending. Analysts will be watching how effectively Lido executes its new product roadmap and whether these initiatives can offset declining staking revenue.