LIT, the native token of the Lighter protocol, is showing signs of recovery after a steep decline following its massive airdrop in late December 2025. The token, which distributed 250 million tokens worth approximately $675 million on December 30, initially faced heavy selling pressure. Its price plummeted from an opening peak near $4.04 to around $2.62 within the first day, a 35% drop, and later reached an all-time low close to $1.50, representing a drawdown of about 63% from its debut.
Recent on-chain activity, however, indicates a shift in sentiment among large holders. Data reported on January 26, 2026, reveals two crypto whales deposited a combined $2.32 million worth of LIT into the protocol's staking pool. One wallet deposited approximately $2.08 million, and another deposited around $238,000. Analysts interpret these moves as a sign of confidence ahead of the full rollout of staking functionality, which is expected to offer attractive rewards.
The price action reflects this renewed interest. LIT has staged a noticeable recovery, currently trading around $1.81 with a 24-hour gain of over 16%. This uptick is backed by increased trading volume and futures market activity. Open Interest (OI) climbed 16% to $145.7 million, and Futures Netflow jumped 237% to $4.08 million, indicating buyer dominance. The Long/Short Ratio on Binance also climbed above 1, signaling that most top traders are taking long positions.
Beyond whale accumulation, the Lighter team's buyback program is also working to reduce circulating supply. The protocol has spent most of its fee revenue—with annualized fees around $61.6 million—on repurchasing LIT tokens. Reports indicate over 2.4 million LIT have been bought back in less than a month. The protocol's Total Value Locked (TVL) has risen to just under $1 billion.
Market sentiment remains divided. Critics point to the rapid post-airdrop selling and a decline in daily users, questioning the project's long-term sustainability. Supporters, however, highlight the technical edge in execution speed, the revenue-funded buybacks, and the potential for staking to stabilize token behavior. The near-term path for LIT is seen as dependent on the successful delivery of staking and new product features, which could help the token reclaim the $2 level.
