Lighter’s newly-launched token bounced some 37% from its all-time low on January 1, as the decentralised perpetual futures exchange began its planned buyback strategy.
The protocol has begun using revenues from its exchange product to purchase LIT tokens on the open market at a rate determined by market conditions.
So far, the Lighter treasury account, where protocol fees accumulate and buybacks are conducted, holds more than 181,000 LIT tokens worth about $550,000.
The LIT token was launched on December 30 through an airdrop of 250 million tokens — 25% of the total supply — to the protocol’s early users.
It acts as a governance token, letting holders propose and vote on protocol changes, and can also be staked to grant access to premium exchange features, while potentially accruing value through buybacks.
Following its launch, LIT fell to an all-time low of $2.33 as many airdrop recipients cashed out.
The token has since rebounded some 37%, buoyed by excitement surrounding the protocol’s buyback plans and favourable crypto market conditions.
Since the start of the year, Bitcoin has rallied more than 6% to almost $94,000, its highest price since November.
Whales buy in
Lighter is one of several perpetual futures exchanges that have generated buzz in recent months.
These platforms let users bet on crypto price movements, usually with high leverage that can juice returns and exacerbate losses.
Along with competitors like Hyperliquid, Aster, and edgeX, Lighter is a hit with traders because it marries the speed and usability of centralised exchanges like Binance with the transparency and self-custody of DeFi.
Buybacks aren’t the only thing whetting investors’ appetite for the LIT token.
Over the past week, several wealthy investors — or whales — have bought up large tranches of LIT, onchain records show.
One wallet, widely believed to belong to Tron founder Justin Sun, holds around 13.2 million LIT, worth almost $40 million at current prices.
Sun did not immediately respond to a request for comment.
Several other whale wallets have also bought millions of dollars worth of LIT over the past week.
While some investors view these purchases as bullish, others argue that single entities holding large amounts of the LIT supply is a liability, and can cause volatility should that entity decide to sell the tokens at a later date.
