Lighter has officially rolled out its mandatory LIT staking program, and the market's reaction was less than enthusiastic. Within hours of the announcement, LIT's price plummeted by nearly 15%, landing at $1.85.
The new staking mechanism is straightforward: stake LIT to unlock access to Lighter's on-chain financial product, LLP. For every 1 LIT staked, users can deposit 10 USDC into the pool. Existing LLP holders get a two-week grace period until January 28, after which staked LIT becomes a requirement. The move aims to better align LIT holders with LLP participants and enhance risk-adjusted returns, part of Lighter's broader goal to "democratize on-chain hedge funds."
Beyond pool access, staking LIT brings fee incentives. Premium market makers and HFT firms will see discounts on new fee tiers, while retail trading stays free. Users staking 100 LIT will also enjoy zero-fee withdrawals and transfers, with mobile staking support coming soon. Yield will be generated from staking rights previously reserved for premium users.
Despite these utility upgrades, LIT's decline is attributed to a classic combo of post-launch selling, FUD, and volatility. The token has faced pressure since its public mainnet launch in October, with early investors and airdrop recipients cashing out. FUD surrounding alleged secret token sales, addressed publicly by CEO Valdimir Novakovski, hasn't helped. Trading volume has cooled from launch hype, and technical support levels were breached, fueling further selling.
The staking announcement itself likely triggered a "buy the rumor, sell the news" scenario, exacerbating existing profit-taking and natural volatility. Lighter has attempted to support the token with buybacks since January 5, but these efforts have so far been insufficient against the selling pressure.
Despite the token's rough day, Lighter remains a top contender in perpetual swaps, reporting nearly $5 billion in perp volume over the last 24 hours. It trails competitors Aster ($6.2 billion) and Hyperliquid ($8.8 billion). The platform recently raised $68 million at a $1.5 billion valuation in a round co-led by Founders Fund and Ribbit Capital. As Lighter continues developing its LIT ecosystem, the staking rollout marks a key step in integrating token utility with financial product access.
