Lighter (LIT) surged more than 20% on Monday to $2.6, its highest level since January, after the perpetuals exchange unveiled a tokenomics overhaul that adds permanent burns and a revamped staking model.

The move made LIT the top gainer among the 100 largest cryptocurrencies. It extended a rally that has lifted the token roughly 40% over the past week, far outpacing the broader market.

Lighter Introduces Tokenomics Update

Lighter has bought back LIT with exchange revenue after its token launch. The exchange said it has repurchased about 15.5 million LIT, or roughly 6.3% of the circulating supply. Lighter said it plans to use the buybacks to permanently reduce the LIT supply through burns.

The burns will run by sending LIT to a burn address on the Ethereum (ETH) mainnet. Lighter plans its first burn in the weeks after the second quarter closes. It noted it may burn undistributed LIT rather than the exact repurchased tokens.

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

Staking Rewards Shift to Reserve

Lighter also changed how it funds staking rewards. Since launching its staking program in January, it has distributed about 3.72 million LIT using pre-TGE revenue, including roughly 170,000 LIT through its fee credits program.

That approach is ending. The exchange will now fund staking rewards using its remaining ecosystem tokens, which total 250 million LIT.

The protocol is targeting a 6% annualized staking yield. With about 125 million LIT currently staked, that would distribute roughly 7.5 million LIT per year.

LIT still trades well below its $7.86 record set in December. Whether the new model sustains demand may hinge on trading revenue holding up in the months ahead.

Source: BeInCrypto