Lighter's LIT burns brighter: tokenomics overhaul sends perp DEX to 7-month high 🔥

Lighter (LIT) climbed more than 20% on Monday to $2.6, its highest level since January, after the perpetuals exchange unveiled a tokenomics overhaul that adds permanent burns and a revamped staking model. The move made LIT the top gainer among the 100 largest cryptocurrencies and extended a rally that has lifted the token roughly 40% over the past week, far outpacing the broader market.

Under the new framework, Lighter said it has repurchased about 15.5 million LIT, or roughly 6.3% of the circulating supply, using exchange revenue accumulated since the token's launch. The exchange plans to use the buybacks to permanently reduce LIT supply through burns, with the first burn scheduled in the weeks after the second quarter closes. Burns will be executed by sending LIT to a burn address on the Ethereum ($ETH) mainnet, and the exchange noted it may burn undistributed LIT rather than the exact repurchased tokens. "This is economically equivalent for LIT holders and allows Lighter to manage treasury operations efficiently and avoid unnecessary costs," the exchange said.

Lighter also restructured how it funds staking rewards. Since launching its staking program in January, the exchange has distributed about 3.72 million LIT using pre-TGE revenue, including roughly 170,000 LIT through its fee credits program. That approach is ending, and staking rewards will now be funded using the remaining 250 million ecosystem tokens, with a 6% annualized staking yield targeted. With about 125 million LIT currently staked, that would distribute roughly 7.5 million LIT per year.

Separately, Lighter disclosed in its Q2 Investor Update Call that 100% of protocol revenue is being directed toward token buybacks, with 6 million LIT repurchased in Q2. The platform also reduced costs, highlighted growth in RWAs, rolled out new order types, and said it is working with the CFTC toward becoming a regulated exchange. Open Interest in LIT was up 8.32% over 24 hours, and a predominantly negative funding rate flipped positive as prices cleared the $2.20-$2.30 local supply zone. The 1-day RSI stood at 79.7, within overbought territory. LIT still trades well below its $7.86 record set in December.