Lighter Launches Buyback Program Using DEX Fees to Repurchase LIT Tokens

• Lighter has launched a token buyback program, allocating 50% of its decentralized exchange (DEX) fees and future services revenue to on-chain LIT repurchases. This initiative is part of a broader strategy to reduce the token's circulating supply and align its value with protocol growth.

• As of early January 2026, the program has already driven a price surge of 13–37% in LIT. Whale activity, including a $4.86M WBTC conversion to purchase 1.119 million LIT tokens, further fueled trading volume and investor interest.

• The buyback strategy is supported by a treasury holding 180,733 LIT tokens valued at $564,609. Analysts highlight sustained buying pressure and bullish technical indicators, though large whale holdings could introduce volatility if sold.

What Drives the Buyback Program's Effectiveness?

The program's design ties token value directly to protocol usage by using 50% of fee revenue for on-chain LIT repurchases. This creates a deflationary mechanism, where growing DEX activity reduces the circulating supply and increases token scarcity.

The buyback also aligns with broader decentralized finance (DeFi) trends of using tokenomics to stabilize and enhance token value. By reducing supply, the program is intended to create sustained buying pressure that supports long-term price stability.

Lighter's treasury holds $1.35 million in USDC for immediate market purchases, ensuring liquidity for buybacks. Whale activity has further amplified the price action, absorbing potential selling pressure and signaling institutional confidence.

What Are the Risks and Limitations of the Buyback Program?

Despite the positive momentum, the success of the program depends on maintaining high protocol fees and continued demand. If the buyback fails to sustain investor confidence, LIT could face downward pressure from selling or reduced trading activity.

Additionally, large whale holdings may introduce volatility. A single wallet is estimated to hold 13.2 million LIT tokens, worth $40 million, which could drive price swings if sold .

Market observers are tracking price dynamics above the $3.00 threshold, which has become a key level of interest. If the price drops below $2.97, it could trigger additional selling pressure and weaken the bullish momentum .