LIT Token Surges As Lighter Launches Buyback Program to Reduce Circulating Supply

• Lighter has initiated a token buyback program using 50% of DEX fees to repurchase its LIT token, aiming to reduce the circulating supply by up to 3% according to reports.
• The program has already repurchased over 181,000 LIT tokens, valued at around $550,000, and is intended to create a deflationary mechanism for the token as financial reports indicate.
• LIT has rebounded 37% from its January 1 all-time low, with whale activity and institutional interest contributing to the price surge and increased trading volume according to market data.

Lighter's LIT token surged 13.9% to $3.04 in early January 2026 as the protocol launched its buyback program according to investment analysis. The initiative, which uses revenue from trading fees and future products, is designed to reduce token supply and align protocol growth with token value as protocol documentation states. This move has been supported by whale purchases, including a $4.86 million WBTC conversion to acquire 1.119 million LIT tokens according to transaction data.

The treasury-led buybacks have been confirmed via on-chain data, showing that Lighter's public treasury account, referred to as Account #0, now holds over 180,588 LIT tokens valued at $548,987 according to on-chain verification. This transparency in buyback activity has reinforced investor confidence and signaled the platform's commitment to token holders as market observers note.

What Is the Buyback Program Funding?

Lighter has allocated 50% of its decentralized exchange (DEX) fees to fund the buyback program according to protocol details. The funds are used to repurchase LIT tokens on the open market, reducing the circulating supply and potentially increasing token value. This strategy mirrors similar approaches taken by other DeFi platforms, where protocol fees are reinvested to enhance token appreciation as industry analysis shows.

The buyback program is also supported by the platform's $68 million funding round in December 2025, which valued it at $1.5 billion according to financial reports. This financial backing provides additional stability for ongoing repurchase activities and supports Lighter's long-term growth strategy.

How Is Whale Activity Affecting LIT's Price?

Whale activity has played a significant role in LIT's price surge, with one whale holding 13.2 million LIT tokens worth nearly $40 million according to market data. These large-scale purchases indicate strong market confidence and suggest that institutional and high-net-worth investors view LIT as a valuable asset for long-term appreciation as analysts report.

The influx of whale capital, combined with the buyback program, has driven a nearly 89% increase in LIT's 24-hour trading volume to $36 million according to trading data. While this volatility could be seen as a risk if large whale positions are liquidated, it also highlights the growing institutional interest in LIT and the broader DeFi ecosystem.

Lighter's buyback program has positioned the LIT token as a competitive asset in the decentralized finance (DeFi) space. By reducing circulating supply and aligning token value with protocol growth, the platform aims to create sustained demand for LIT and attract further institutional investment as market analysis indicates.