LIT Token Surges As Lighter Initiates Buyback Program to Reduce Supply

• Lighter's LIT token surged 13–37% in early January 2026 following the launch of a buyback program.
• The buyback program allocates 50% of protocol fees from the DEX and future services to on-chain repurchases, aiming to reduce circulating supply by up to 3%.
• Whale activity, including $4M USDC and $4.86M WBTC conversions to LIT, indicates strong investor confidence in the token's long-term potential.

Lighter (LIT) launched a buyback program on January 6, 2026, allocating 50% of protocol fees to token repurchases. The protocol's treasury now holds approximately 180,733 LIT tokens valued at $564,609 at the time of announcement. This initiative aligns with earlier commitments made during LIT's launch and aims to improve token value and investor sentiment. The move triggered a notable price increase, with LIT rising 18.3% to $3.11 within 24 hours of the announcement.

The buyback program has also drawn attention from whale investors, who have made significant transactions to acquire LIT tokens. For example, a $4.86 million WBTC conversion was made to purchase 1.119 million LIT tokens. This large-scale buying activity, combined with the protocol's on-chain repurchase strategy, has contributed to a nearly 89% surge in LIT's 24-hour trading volume to $36 million.

The program's impact is reflected in technical indicators such as the Chaikin Money Flow (CMF), which indicates improved accumulation patterns. The Money Flow Index (MFI) remains above the neutral threshold without reaching overbought levels, suggesting sustained buying pressure. However, market observers note that a drop below $2.97 could signal renewed selling pressure, invalidating the current bullish structure.

What Drives the LIT Token's Recent Price Surge?

The LIT token's recent price surge is primarily driven by the buyback program and whale activity. The program allocates 50% of protocol fees to on-chain repurchases, reducing the circulating supply and creating sustained buying pressure. Whale investments, including $4 million USDC deposits to acquire 1.28 million LIT tokens, further signal strong market confidence. On-chain data revealed the Lighter treasury using over $10,000 in USDC to purchase 180,700 LIT tokens, with additional 165,790 LIT tokens acquired by the Lighter Assistance Fund.

The surge in trading volume has also been notable, with 24-hour volume jumping nearly 89% to $36 million. This increase suggests renewed interest from both retail and institutional investors. The Lighter team has also confirmed that the treasury will continue to track both protocol revenue and buyback activity.

What Are the Risks and Limitations of the Buyback Strategy?

While the buyback strategy has been largely bullish for the LIT token, it is not without risks and limitations. A key concern is the potential for renewed selling pressure, which could push the price below $2.97 and invalidate the current bullish structure. Analysts are monitoring the treasury wallet for signs of sustained buybacks and their impact on the token price.

Another limitation is the concentration of ownership among whale investors. One large wallet, believed to belong to Tron founder Justin Sun, has acquired a significant portion of LIT tokens . While whale activity is generally seen as a positive sign, large single-entity holdings can introduce volatility into the market.

Despite these risks, the buyback strategy has demonstrated a clear commitment to token economics and investor value. By reducing the circulating supply and allocating protocol fees to repurchases, Lighter aims to create a more stable and value-accruing ecosystem for LIT holders with sustained buying pressure and positive sentiment being key factors for long-term growth.