LIT Introduces Mandatory Staking to Align Liquidity Providers and Token Holders

Lighter has implemented a mandatory staking model for its LIT token, aligning the interests of token holders with liquidity providers as reported. The model requires users to stake 1 LIT to deposit 10 USDC into the Lighter Liquidity Pool (LLP) according to data. This approach aims to tie the token's value more closely to platform liquidity and trading activity as stated.

Existing LLP holders have a two-week grace period until January 28 to adjust their positions before staking becomes mandatory according to reports. After this period, staked LIT must remain in the LLP as documented. Stakers of 100 LIT or more benefit from fee discounts, zero-fee withdrawals, and governance rights as detailed. The initiative is designed to democratize access to on-chain financial products and expand staking to public pools according to analysis.

Despite the incentives, the LIT token experienced a nearly 15% price drop within 24 hours of the staking program's launch according to reports. The decline was attributed to post-launch selling, profit-taking, and broader market volatility as analyzed. Lighter has initiated buybacks to stabilize the token price, but liquidity concerns persist according to data. The mandatory staking requirement has reduced token liquidity and raised questions about its impact on short-term price stability as reported.