LIT Token Jumps 14% as Buyback Program Launches Amid Controversy

• LIT token surged over 14% following confirmation of its token buyback program according to reports.
• On-chain data shows the treasury holding over 180,000 LIT purchased with protocol fees as reported.
• Approximately $250 million exited the platform after a $675 million LIT airdrop according to analysis.
• Blockchain researchers identified coordinated sales of $7.18 million from interconnected wallets according to reports.
• Lighter's CEO clarified the sales were from a liquidity partner, not internal teams as stated.

The Lighter (LIT) token rallied sharply this week as the protocol initiated its promised buyback program. On-chain data confirmed active treasury purchases totaling over 180,000 tokens according to data. This uptick unfolded against a backdrop of significant capital outflows following Lighter's token airdrop earlier this week

. Emerging transparency concerns around coordinated token sales added further complexity to the price action.

Why Did LIT Token Surge Over 14%?

LIT climbed 18% within 24 hours after protocol buybacks commenced according to reports. The team activated a mechanism using fees from its perpetual exchange to purchase tokens as documented. On-chain records revealed the treasury acquired 180,700 LIT with over $10,000 in USDC according to data. Whale activity compounded the momentum with one entity buying 1.1 million tokens worth $3.36 million according to reports. These moves validated the protocol's tokenomics roadmap for investors as stated.

Technical indicators signaled strengthened buying pressure during the rally according to analysis. The Money Flow Index sustained above neutral levels, suggesting accumulation rather than short-term speculation according to data. Analysts watch whether LIT maintains support above $3.00 to confirm bullish continuity as reported. Breaking through the $3.19 resistance level remains critical for extending gains according to reports.

What Caused $250M in Withdrawals After the Airdrop?

Approximately $250 million exited Lighter after its $675 million LIT token distribution according to analysis. On-chain analytics firm Bubblemaps tracked the outflows across Ethereum and Arbitrum networks as reported. These withdrawals represented 20% of Lighter's total value locked, reducing its TVL to $1.16 billion according to data. Such movement aligns with common DeFi patterns where yield farmers reallocate after claiming incentives as stated.

Trading volume on the platform dropped sharply following the airdrop . Monthly activity declined from $8-$15 billion to about $2 billion post-distribution as documented. Industry experts note similar post-airdrop capital reallocation occurred with protocols like Uniswap and dYdX according to analysis. This behavior reflects typical liquidity fragmentation in decentralized finance ecosystems as reported.

How Are Transparency Concerns Affecting Lighter?

Blockchain researchers identified five interconnected wallets selling $7.18 million in LIT tokens according to reports. The wallets received nearly 10 million tokens through a recent airdrop representing 4% of circulating supply as documented. Perfectly rounded allocations raised questions about potential insider advantages according to analysis. The sales introduced downward pressure and rattled investor confidence as reported.

CEO Vladimir Novakovski clarified the activity stemmed from a 2024 liquidity partnership agreement as stated. The team provided 5 million tokens to a third-party for market-making during their private beta phase according to reports. Despite this explanation, LIT dipped 8.5% as fear spread among short-term holders as documented. The token traded near $2.43 with technical indicators signaling continued outflow pressure according to data.