Lighter climbs 20% after tokenomics overhaul

• Lighter's LIT token rose more than 20% after the protocol announced token burns and changes to its staking model.
• The exchange plans to permanently reduce LIT supply after repurchasing about 15.5 million tokens, or 6.3% of circulating supply.
• Lighter will fund staking rewards from a 250 million LIT ecosystem reserve while targeting a 6% annualised staking yield.

Lighter's LIT (CRYPTO:LIT) token climbed more than 20% to US$2.60, its highest level since January, after the perpetual futures exchange announced a tokenomics update that introduces token burns and revises its staking reward model.

The rally extended LIT's weekly gain to about 40%, making it the strongest performer among the 100 largest cryptocurrencies during the period, although the token remains below its record high of US$7.86 reached in December.

“This is economically equivalent for LIT holders and allows Lighter to manage treasury operations efficiently and avoid unnecessary costs,” the exchange said.

Lighter said it has repurchased about 15.5 million LIT, representing approximately 6.3% of the circulating supply, and plans to permanently reduce supply by sending tokens to a burn address on the Ethereum (CRYPTO:ETH) mainnet, with the first burn expected after the second quarter closes.

The exchange also said it will stop funding staking rewards from pre-token generation event revenue and instead use its remaining 250 million LIT ecosystem reserve, targeting an annualised staking yield of about 6%.

Since launching staking in January, Lighter has distributed about 3.72 million LIT in rewards, including around 170,000 LIT through its fee credits programme.

The exchange said approximately 125 million LIT is currently staked, which would result in annual staking rewards of about 7.5 million LIT if the 6% target yield is maintained.

At the time of reporting, Lighter price was $2.62.