Lido Labs, a contributor group behind Ethereum's largest liquid staking protocol, is cutting its focus on staking growth and redirecting resources toward new products after ETH traded below its internal planning target and staking demand changed faster than expected.
Vasiliy Shapovalov, a Lido co-founder, wrote in an X post today, May 22, that Lido Labs is "reallocating resources" and reducing its focus on staking "in favor of new products" that can use the team's security experience and market trust.
DefiLlama lists Lido as a major staking protocol with revenue coming from a 10% fee on staking rewards, split between node operators and the DAO treasury.
The ETH price miss
As Shapovalov explained, Lido Labs had built its budget and year-end staking goals around ETH trading at $2,712, but ETH has been closer to $2,120 for months. Given that Lido earns fees from ETH staking rewards, lower ETH prices mean the same staking activity brings in less money in dollar terms.
Shapovalov also pointed to staking-market changes, noting that total ETH staked grew faster than expected, mostly through Grayscale and BitMine, while the "APR Maxi" user segment fell from 16% to 10% after the KelpDAO incident in late April.
- The KelpDAO incident was quite a big DeFi stress event for the crypto space so far in 2026.
- In April, Aave and other DeFi participants coordinated around a recovery effort after a reported $292 million KelpDAO-related exploit created a shortfall tied to rsETH, a liquid restaking token.
- Lido Labs also proposed allocating up to 2,500 stETH, then worth about $5.8 million, to help reduce the rsETH deficit.
Lido Labs is now looking beyond just Ethereum staking. Shapovalov said that if Lido Labs can't hit its staking goals, it will "reduce spending and redirect where there's still a real case," while arguing that recent DeFi incidents have made Lido's security reputation more valuable.
- Ethereum has been weak in 2026 so far, trading around $2,130 on May 21, which puts it roughly 28% down year-to-date based on data from CoinGecko. ETH is also 57% below its all-time high of $4,946.
- Bitcoin has also fallen this year, but by less, roughly 20% YTD.