New Staking Feature for LIT Token
Lighter, a decentralized exchange platform, has introduced a new staking feature for its native token, LIT. This new feature requires all users to stake LIT to access liquidity pools. Lighter launched LIT tokens last month, staking 50% of its supply, which includes allocations for airdrops and funding for future incentive programs.
The Ethereum-based decentralized exchange (DEX) for perpetual futures trading announced that LIT staking has been integrated as a core utility feature for accessing its tools and features, beginning with the Lighter Liquidity Pool (LLP). Staking LIT is now mandatory. Depositing into the LLP unlocks a 1:10 deposit ratio, meaning one staked LIT enables deposits of up to 10 USDC. This rollout is mandatory for new users.
Grace Period for Existing LIT Holders
Existing LIT holders are provided with a two-week grace period to begin staking their tokens. This window will end on January 28. During this period, existing members can maintain access to the LLP without staking. After the deadline, all participants will be required to stake their LIT tokens in the liquidity pools.
The Perpetual futures trading DEX highlighted that the introduction of mandatory staking for LIT will foster greater alignment between LIT holders and LLP holders. This alignment is expected to improve LLP risk-adjusted returns. The platform has committed to replicating similar mechanisms across public pools to advance its vision of democratizing on-chain hedge funds.
Impact on Liquidity Pools and Fees
Lighter noted the vital role of accessing liquidity pools (LPs) across DEX ecosystems. LPs provide insurance against liquidations and offer rewards to participants. The DEX platform announced that it will adjust premium fees for market makers and high-frequency traders within the next two weeks.
According to the DEX platform, overall fees will increase. However, staking LIT will introduce fee discounts, with current fee levels being designated as the lowest fee tiers. Staking 100 LIT will unlock zero fees for withdrawals and transfers, in addition to the existing features.
Staking is also being rolled out to mobile users in the coming days, as per Lighter’s statement.
LIT Token Launch and Distribution
Lighter launched its native token, LIT, at the end of last month. This launch occurred just two months after the platform's public mainnet launch in October. The platform distributed 25% of the supply to users via airdrops. The remaining 75% was fully unlocked and made available for trading.
Additionally, 50% of the LIT token supply was allocated to the team and the ecosystem. A significant portion, 75% of the LIT tokens, is designated to be vested over time through mechanisms such as buybacks, staking, and incentives aimed at driving growth and governance.
Fee Tiers and Trading Volume
Lighter plans to release the precise details of the premium fee tiers shortly. This will enable trading firms to adjust their current algorithms accordingly. The DEX confirmed that retail trading will continue to be free on the platform.
Staking LIT on Lighter will unlock yields. The firm is set to begin publishing the Annual Percentage Rate (APR) once the feature goes live. Based on previous mechanisms, yields were generated from staking rights granted to premium users.
The perpetual futures trading DEX platform experienced a surge in popularity after launching its public mainnet in October. The platform reported approximately $200 billion in trading volume in December, according to DeFiLlama data. This performance allowed Lighter to outperform other perpetual rivals such as Aster, which registered $177.5 billion in December, and Hyperliquid, which recorded $169.3 billion during the same period.
Lighter has achieved $54.9 billion in trading volume this month, compared to Hyperliquid's $81.4 billion.
LIT Token Price Performance
At the time of publication, the LIT token price was down approximately 12%, trading at $1.88 with a market capitalization of $469 million. The launch of LIT in December saw its price surge to $2.62 before dropping to $2.30 later. The token reached an all-time high (ATH) of $4.04 within 24 hours of its launch but has since been on a downward trajectory.