LIT Token Surges As Lighter Initates Buyback Program To Reduce Circulating Supply

• Lighter has launched a buyback program, allocating 50% of protocol fees from its decentralized exchange (DEX) and future services to repurchase LIT tokens on-chain according to reports. The initiative aims to reduce the circulating supply of LIT by up to 3%, directly linking token value to protocol growth.

• The treasury has already repurchased over 180,000 LIT tokens at a cost of around $550,000 according to Longbridge. This action coincided with a 13–37% price surge in LIT, reaching approximately $3.11 as of the 24-hour period post-announcement. Whale activity further reinforced investor sentiment, with several large entities purchasing millions of dollars worth of LIT.

• On-chain transparency and supply reduction strategies have boosted sentiment, driving a nearly 89% increase in daily trading volume to $36 million. Technical indicators, including the Chaikin Money Flow and Money Flow Index, showed improved inflows and sustained buying pressure.

Has The Buyback Program Driven Significant Price Movement In LIT?

Lighter's buyback program has driven a 13–37% price surge in LIT by early January 2026 according to Bitget. Whale activity, such as a $4.86 million WBTC conversion to purchase 1.119 million LIT tokens, has further fueled trading volume. This surge is attributed to both the buyback strategy and favorable crypto market conditions, with Bitcoin rallying over 6% to nearly $94,000.

The LIT token has seen a notable price rebound following the launch of its on-chain buyback program, reaching approximately $3.11 as of the 24-hour period post-announcement. The Chaikin Money Flow and Money Flow Index both showed improved inflows and sustained buying pressure without reaching overbought levels .

What Are The Risks Associated With The LIT Buyback Program?

While the buyback program has generated positive momentum, risks remain. Several large single-entity holdings, such as the 13.2 million LIT tokens held in one wallet, may introduce volatility if these entities decide to sell . Analysts note that volatility may arise from large whale holdings, and if market sentiment shifts or selling pressure emerges, the price could decline .

Additionally, on-chain researchers identified coordinated sales of $7.18 million from interconnected wallets, raising transparency concerns . Lighter's CEO clarified that the sales were from a liquidity partner and not from the internal team, but the activity caused an 8.5% dip in LIT's price and rattled investor confidence .

What Is The Future Outlook For LIT And Lighter?

The buyback program is part of Lighter's broader token management strategy, designed to align token value with protocol growth and create sustained buying pressure . The treasury has already repurchased over 180,000 LIT tokens at a cost of around $550,000 . This action coincided with a 13–37% price surge in LIT, reaching approximately $3.11 as of the 24-hour period post-announcement.

Whale activity further reinforced investor sentiment, with several large entities purchasing millions of dollars worth of LIT. The program is part of a broader strategy to reduce the circulating supply by up to 3% of the total 1 billion LIT tokens . The program builds upon Lighter's $68 million funding round in December 2025, which valued the protocol at $1.5 billion . This financial backing enables sustained buyback efforts while also supporting ecosystem growth and product development .

The long-term trajectory of LIT will depend on sustained buyback activity and broader market conditions. Investors should closely monitor on-chain treasury activity to gauge the frequency and scale of future buybacks .