Lighter Begins Buyback Program, LIT Price Surges As Funds Allocate 50% of Fees to Token Repurchases

Lighter has launched a buyback program allocating 50% of protocol fees from its decentralized exchange (DEX) and future services to on-chain token repurchases. The initiative, which aims to reduce the circulating supply of LIT by up to 3%, has already driven a 13–37% price surge in LIT as of early January 2026. Whale activity, including a $4.86M WBTC conversion to purchase 1.119 million LIT tokens, has further fueled trading volume and investor interest in the token.

Lighter's LIT token has seen a notable price rebound following the launch of its on-chain buyback program. The initiative, confirmed by the protocol on January 6, uses a portion of trading fees to repurchase LIT tokens from the market. As of the latest on-chain data, the Lighter treasury holds over 180,733 LIT tokens valued at $564,609.

The buyback program is part of Lighter's broader token management strategy, designed to align token value with protocol growth and create sustained buying pressure. The treasury has already repurchased over 180,000 LIT tokens at a cost of around $550,000. This action has coincided with a 13–37% price surge in LIT, reaching approximately $3.11 as of the 24-hour period post-announcement.

Whale activity has further reinforced investor sentiment. For example, a $4.86M WBTC transaction converted to LIT tokens has contributed to an 89% increase in 24-hour trading volume to $36 million. Analysts note that this accumulation trend, combined with the reduction in supply, may sustain upward price momentum, particularly if buybacks continue at the current pace.

What Lighter's Buyback Program Involves?

Lighter's buyback program is funded by 50% of the protocol's trading fees and is executed entirely on-chain for transparency. The treasury account, labeled as Account #0, has been used to accumulate LIT tokens, with the first wave of buybacks already visible in on-chain data. The program is part of a broader strategy to reduce the circulating supply by up to 3% of the total 1 billion LIT tokens.

The program builds upon Lighter's $68 million funding round in December 2025, which valued the protocol at $1.5 billion. This financial backing enables sustained buyback efforts while also supporting ecosystem growth and product development.

How the Buyback Impacts LIT Token Value?

The buyback strategy is designed to create a direct link between protocol usage and token demand, thereby enhancing the value proposition for LIT holders. By reducing supply and increasing demand, the program aims to drive long-term appreciation of LIT. The token's price has already responded positively, with a 16–37% rebound in early January.

Technical indicators also support the bullish trend. The Chaikin Money Flow and Money Flow Index have both shown improved inflows and sustained buying pressure, without reaching overbought levels. If the price closes above $3.19, it would validate the bullish structure, while a drop below $2.97 may signal renewed selling pressure.

What Investors Should Watch for in the Coming Weeks?

Investors should closely monitor on-chain treasury activity to gauge the frequency and scale of future buybacks. The Lighter team has stated that the frequency of buybacks may vary depending on market conditions and protocol performance.

Whale activity remains a key indicator of market sentiment. Recent whale purchases, including a $3.36M USDC deposit for 1.119 million LIT tokens, have demonstrated strong confidence in the token's future. However, large single-entity holdings, such as the 13.2 million LIT tokens held in one wallet, may introduce volatility if these entities decide to sell.

Overall, the buyback program represents a clear and transparent approach to token value management. As Lighter continues to expand its product offerings and trading volume, the long-term trajectory of LIT will depend on sustained buyback activity and broader market conditions.