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- Debashree Patra
Debashree Patra
- Reviewed by:
Qadir AKQadir Ak is the founder of Coinpedia. He has over a decade of experience writing about technology and has been covering the blockchain and cryptocurrency space since 2010. He has also interviewed a few prominent experts within the cryptocurrency space.
- Dec 30, 2025 08:38 UTC
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Lighter Rolls Out LIT Token with $68M Funding and Mainnet Momentum
LIT is designed to capture all protocol value for holders through buybacks, staking, and fees, with revenue tracked on-chain by Lighter’s US C-Corp.
Despite strong demand and funding, critics question LIT’s launch transparency, pre-market manipulation, and trust risks as trading begins.
Lighter, widely seen as one of Hyperliquid’s strongest rivals in decentralized derivatives trading, has officially announced the launch of its native token, LIT. The move comes after weeks of intense speculation, rising trader interest, and growing activity around the platform ahead of its expected airdrop and token generation event.
How LIT Token Is Designed to Work
Lighter says LIT is meant to align incentives across its entire ecosystem. Traders, developers, institutions, and investors are all meant to benefit from the token, with the team stating that every dollar of economic value generated by Lighter’s products will accrue directly to LIT holders.
The token is being issued directly by Lighter’s US-based C-Corp, which the company says will continue to operate the protocol at cost. Revenue generated will be tracked transparently on-chain and split between ecosystem development and token buybacks depending on market conditions. Over time, LIT is also expected to play a role in market data validation and pricing infrastructure, acting as both a fee and staking asset for participants.
LIT Token Allocation and Vesting Structure
LIT’s total supply is split evenly. Half of the tokens are reserved for the ecosystem, while the remaining 50 percent is allocated to internal stakeholders. Within that internal share, 26 percent is assigned to the team and 24 percent to investors.
Those internal allocations are locked for one year, followed by a three-year linear vesting period. Lighter has also raised $68 million in funding, and its mainnet launch in October helped accelerate user growth and trading activity.
Speculation and Pre-Launch Trading Frenzy
Market expectations surged leading up to the announcement. Polymarket traders largely priced in a token launch before year-end, while Hyperliquid added fuel to the fire by listing a pre-market perpetual tied to LIT. That allowed traders to take leveraged positions ahead of the launch, amplifying volatility.
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Speculation intensified further after Lighter transferred 250 million LIT tokens on-chain, which many interpreted as a sign that the airdrop and TGE were imminent.
Growing Backlash and Trust Concerns
Not everyone is convinced. Prominent trader BagCalls has publicly accused Lighter of heavy manipulation around the token launch. He claims the TGE event failed to clearly explain tokenomics and avoided key questions. He also pointed to treasury movements and fee transfers to Coinbase, suggesting a lack of transparency.
Analyst argues that pre-market price action was driven by artificial short squeezes, followed by sharp sell-offs that hurt retail traders. He has criticized the decision to release roughly 25 percent of the fully diluted supply at launch and raised concerns about an unexplained $30 million withdrawal. In his view, LIT may fall well below a $1 billion valuation, framing the issue as a breakdown of trust rather than normal market volatility.
As LIT begins trading, the spotlight now shifts from hype to execution, transparency, and whether Lighter can deliver long-term value beyond the noise.
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FAQs
LIT is the native token of Lighter, a decentralized trading platform. It rewards holders with platform revenue, will be used for staking, and aims to align incentives across the entire Lighter ecosystem.
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