LIT Jumps 14% as Lighter Confirms Treasury Buybacks

• Lighter’s LIT token increased 14% following speculation and confirmation of on-chain treasury buybacks.
• On-chain data showed the Lighter treasury account accumulating LIT tokens, which market participants interpreted as an indication of buyback activity.
• Lighter confirmed through an official post that the treasury account would track both protocol revenue and token buyback activity, reinforcing transparency and long-term alignment with token holders.

The price surge coincided with growing interest in the LIT token, including whale activity and institutional investments. One wallet used $2.89 million in USDC to purchase nearly one million LIT tokens, indicating strong market confidence in the project. Additionally, the treasury account held over $548,000 in LIT tokens, supporting the buyback program.

Analysts are monitoring the frequency and effectiveness of buybacks in the coming weeks, with some predicting sustained bullish momentum above $3.00. The buyback program aims to reduce the circulating supply by up to 3%, aligning token value with protocol growth and creating sustained buying pressure.

What triggered the LIT price surge?

The LIT token climbed over 14% after on-chain signs indicated that the Lighter protocol was buying back its own tokens. This triggered speculation about the activation of a buyback mechanism, leading to increased market sentiment and trading activity . The Lighter treasury account, which holds a large stash of LIT tokens, was interpreted as an early sign of this mechanism being active .

How is Lighter using its treasury for buybacks?

Lighter has allocated 50% of protocol fees from its decentralized exchange and future services to repurchase LIT tokens, aiming to reduce the circulating supply by up to 3%. This strategy aligns with broader decentralized finance (DeFi) trends of using tokenomics to stabilize and enhance value for token holders .

The treasury account has already repurchased over 180,000 LIT tokens at a cost of around $550,000, creating sustained buying pressure by tying token demand directly to protocol usage . Whale activity, such as a $4.86 million WBTC conversion to acquire 1.119 million LIT tokens, has also supported the token’s upward trend .

What are the implications for investors?

The confirmation of buyback activity has reinforced investor confidence, signaling long-term alignment with token holders. Institutional and high-net-worth investors were also active, with one wallet holding approximately 13.2 million tokens valued at nearly $40 million .

Transparency in on-chain data and the $68 million funding round at a $1.5 billion valuation further reinforce institutional confidence and the platform's market position . However, potential volatility remains if large holders decide to sell, highlighting the need for ongoing monitoring of treasury wallet activity .

Lighter’s recent expansion of trading features, including 24/5 equity perpetuals, has also enhanced its market position and attracted more institutional and retail traders . With the mainnet launched in October and over $200 billion in monthly trading volume reported by December, the platform has shown strong growth potential .

The buyback program and increased trading volume are part of Lighter’s broader strategy to enhance token value and market position, aligning with the broader trend of using tokenomics to drive growth and stability in the DeFi space .