TL;DR
- Lido laid off 15% of its workforce to boost sustainability, sparking concerns about internal stability.
- LDO token dropped over 21% in a week, despite strong protocol metrics and recent technical upgrades.
- Community reactions are divided, with some praising the move and others fearing deeper structural issues.
Ethereum staking heavyweight Lido is facing turbulence after announcing a significant workforce reduction and experiencing a sharp decline in its native token, LDO. The protocol, which has long been a dominant force in the liquid staking space, is now grappling with internal restructuring and market skepticism. While the layoffs are framed as a strategic move for long-term sustainability, the timing and scale have triggered concerns about the protocol’s future direction and investor confidence.
As part of efforts to ensure long-term sustainability, Lido Labs, Lido Ecosystem, and Lido Alliance have made the hard decision to reduce the size of their contributor teams, impacting around 15% of the workforce.
This decision was about costs — not performance. It affects…
— Vasiliy Shapovalov (@_vshapovalov) August 1, 2025
Strategic Layoffs Signal Operational Shift
Lido cofounder Vasiliy Shapovalov confirmed a 15% reduction in staff across Lido Labs, Lido Ecosystem, and Lido Alliance. He emphasized that the decision was not performance-related but rather a proactive measure to ensure the protocol’s resilience and sustainability. The layoffs come amid broader efforts to streamline operations and align more closely with LDO tokenholder interests. This internal shift suggests the protocol is recalibrating its priorities in response to evolving market dynamics and competitive pressures.
LDO Token Suffers Despite Protocol Strength
Following the announcement, the protocol’s native token LDO saw a weekly drop of 21.6%, despite a modest 24-hour gain of 4.3%. The decline reflects investor unease and a potential disconnect between the protocol’s strong fundamentals and market sentiment. The token’s volatility highlights growing uncertainty about Lido’s strategic direction and its ability to maintain momentum amid internal changes. At the time of writing, the LDO token is showing signs of recovery, trading at $0.92, increasing nearly 3%.
Innovation Continues Amid Restructuring
Earlier this year, Lido launched v3, introducing modular smart contracts known as “stVaults” to support more flexible staking strategies. These upgrades demonstrate the protocol’s commitment to innovation, even as it undergoes structural changes. The layoffs, however, suggest that Lido is preparing for long-term challenges, including increased competition and potential regulatory shifts. Shapovalov’s emphasis on resilience indicates a broader strategic pivot beyond technical development.
Community Reaction and Future Outlook
The community response to the layoffs has been mixed. Some stakeholders view the move as a necessary step toward sustainable growth, while others interpret it as a warning sign. With LDO’s price under pressure and contributors affected, Lido’s leadership faces the challenge of restoring confidence and maintaining its position in the staking ecosystem.
