Writer, one of the largest decentralized perpetual exchanges by trading volume, said it will start writing forever. $LIT Tokens are bought back with exchange proceeds to fund staking rewards from the ecosystem’s token reserves.
Leiter bought back approximately 15.5 million shares. $LIT The company said in an X Post on Tuesday that since the token generation event, approximately 6.3% of the circulating supply has utilized exchange proceeds. These tokens will be withdrawn from the exchange and sent to a write address on the Ethereum mainnet, with the first write set for a few weeks after the end of Q2.
Separately, Lighter will begin paying out staking rewards from the remaining ecosystem tokens, targeting an initial 6% annualized yield. Approximately 125 million $LIT If you bet, that yield would distribute approximately $7.5 million. $LIT One year from the remaining 250 million reserves.
This change affects supply in two ways. Burning repurchased tokens will remove them from circulation, but paying staking yield from the reserve will free up tokens that were not yet in circulation, offsetting a portion of the burn. This update also responds to requests from holders for clarity on what happens to them. $LIT Protocol buybacks are a recurring question across perpetual exchanges that do buybacks.
Lighter briefly overtook Hyperliquid in monthly perpetual trading volume around its launch in December, when airdrop incentives drew traders to its zero-fee order book. Activity has since cooled as these incentives have diminished, and more emphasis has been placed on whether the token economics can sustain demand on its own.
$LIT According to CoinGecko, it is up about 2% in 24 hours, about 20% in the past week, and about 39% in the past 30 days, outpacing Bitcoin, which has fallen about 3% in the past day and about 20% in the past month. The token is trading around $1.84, about 77% below its all-time high. Its market capitalization is approximately $461 million. The fully diluted valuation of the total supply of 1 billion tokens compared to the 250 million tokens currently in circulation is approximately $1.84 billion.
Repurchase is a burn
I bought a lighter $LIT Since the token launch at the end of December, it has earned exchange revenue on the public market, but has not promised to destroy the tokens. The company announced on Tuesday that the share buybacks would permanently reduce supply through burnout carried out through remittances. $LIT Send to Ethereum write address.
The exchange showed one mechanical warning. That means that the tokens burned at the exchange may not be distributed. $LIT The company said this approach, rather than the exact tokens being bought back, would be economically equivalent for holders and would also result in lower administrative costs.
Share buybacks will be funded through trading activity. According to DefiLlama, Lighter has generated approximately $2.87 million in protocol revenue in the past 30 days and approximately $53 million since launch.
Ongoing exchange income
The burn program relies on ongoing exchange revenue to fund buybacks, and the revenue is modest compared to the token’s valuation.
Fund staking from the 250 million token reserve also withdraws the finite pool. If revenues decline or staking participation increases, its reserves may be depleted faster, and the 6% target is not fixed.
Reiter said the first write-up will take place within a few weeks after the end of the second quarter, and milestone holders will be able to see it on-chain.
Staking moves to reserve
Lighter launched its staking program in January and distributed approximately $3.72 million $LIT To date, stake participants include approximately 170,000 people. $LIT From paid credit programs.
These rewards were independently funded with pre-launch proceeds, with exchange proceeds going entirely towards buybacks. Effective immediately, the protocol will instead use ecosystem tokens, which the company says will be used more consistently as rewards flow to holders with the longest tenure.
The target yield of 6% is $LIT It can then be adjusted at the team’s discretion based on market conditions, protocol performance and sustainability, Reiter said. Approximately 125 million $LIT About half of the circulating supply is committed to this program as it is staked.
Mr. Reiter outlined four priorities for future financial management. These are: rewarding long-term investors, reducing supply through burns, preserving tokens for future partnerships and growth programs, and managing reserves for long-term value. The company said ecosystem tokens exist to grow the protocol, deepen liquidity, and reward users.
