LIT DROPS 15% AS LIGHTER LAUNCHES STAKING PROGRAM

• Lighter’s LIT token has dropped nearly 15% in the last 24 hours following the launch of its staking program.
• The staking program allows users to stake LIT tokens to access the Lighter Liquidity Pool (LLP), which offers financial incentives and zero-fee transfers for users staking at least 100 LIT according to the announcement.
• Existing LLP holders have a two-week grace period until January 28 to adjust their positions without staking LIT as reported.

The price decline reflects a combination of market factors, including post-launch selling and token distribution following the public mainnet launch in October according to market analysis. Staking also brings fee incentives, with premium market makers and HFT firms benefiting from discounts on newly adjusted fee tiers. Lighter plans to extend staking features to other public pools, aiming to democratize on-chain hedge funds.

What Drives the Price Decline?

Post-launch selling and token distribution following the public mainnet launch have created significant downward pressure on the LIT token as market data shows. Early investors and airdrop recipients sold portions of their holdings, triggering a cascade of market exits according to reports. Trading volume has cooled since the initial launch hype, and technical support levels have been breached, fueling further selling according to analysis.

What Is Lighter Doing to Support the LIT Token?

Lighter has introduced a treasury buyback program and staking features to boost LIT token value and liquidity as announced. These initiatives have driven an 18.3% price surge to $3.11 and an 89% increase in 24-hour trading volume according to trading data. However, the token faces selling pressure below $2.97 and a broader bearish sentiment following a 30% weekly decline as market reports indicate.

Lighter’s token buyback program aims to reduce the circulating supply by up to 3% and has already repurchased over 180,000 LIT tokens according to company statements. Staking offers users 10 USDC for every 1 LIT staked and includes zero withdrawal charges for those staking 100 LIT as detailed. A two-week grace period is provided for existing users to adjust to the new model, with mandatory staking enforced afterward according to the announcement.

What Are the Market Implications of LIT’s Decline?

The LIT token’s decline reflects the fragility of altcoin liquidity, especially for tokens with limited institutional backing according to market analysis. On-chain data indicates that whale activity often acts as a leading indicator for market sentiment as research shows. During the October 2025 market crisis, 83.9% of $9.89B in liquidations were driven by forced selling and leveraged positions according to data.

LIT’s decline also highlights the risks of holding low-liquidity altcoins during market instability as market reports indicate. Thin order books and fragmented trading infrastructure made tokens like LITR particularly vulnerable during this period according to on-chain analysis. Investors must be cautious of leverage-driven selling and the lack of hedging tools in the altcoin space as experts warn.