Lighter, the decentralized perpetuals exchange, has completed its first programmatic token burn, permanently removing 2 452 017 tokens LIT from circulation. This figure equals all the LIT tokens the protocol bought back through its automated buyback program by the end of the third quarter of 2026.
This is the first token burn since Lighter changed how it handles repurchased tokens. LIT bought on the open market is no longer held by the protocol. The tokens are withdrawn from the exchange and sent to a burn address on the Ethereum mainnet, permanently taking them out of circulation.
Anyone can verify the transaction on the blockchain. The total supply of LIT tokens has now dropped below the original hard cap of 1 billion tokens.
In early July 2026, Lighter announced the change in a tokenomics update. Before that, the protocol had been buying back LIT since its token generation event, but held the repurchased tokens. Starting from the third quarter, every repurchased token will be burned.
The updated information also stated that the first burn would take place after the close of the following quarter. The October burn matches this plan and includes the full amount of funds burned in the third quarter.
The program is funded by revenue. Lighter uses 100% of its trading fee revenue to buy LIT on the open market. Because the buybacks are carried out programmatically, they run on a set schedule rather than at the team's discretion.
The scale is already significant. By the time of the July update, Lighter had bought back about 15.5 million LIT since launch. That was roughly 6.3% of the total LIT in circulation at the time. On the day of the announcement, LIT was trading at around $1,92, up 7.1% over 24 hours.
The model directly ties the token supply to activity on the exchange. Higher trading volume generates more fee revenue. More revenue means more LIT tokens bought back and burned each quarter.
The July update also discussed staking. Lighter set an initial target of 6% annual rewards for LIT stakers.
These rewards are not paid out of token buyback revenues. They come from the 250 million LIT allocated for ecosystem development, which were reserved at launch for growth and incentives.
At the time of the update, about 125 000 000 LIT was staked. At the target rate of 6%, this amounts to roughly 7 500 00 LIT per year in rewards. Since staking launched in January 2026, about 3.72 million LIT has been distributed among stakers.
Staking also allows LIT to play a role in trading. Market makers and high-frequency trading firms pay fees for premium account tiers, and these fees decrease as the amount of LIT staked increases.
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