Lighter’s LIT token launch on December 30, 2025, landed less like a quiet TGE and more like a full-scale liquidity event. Roughly $74 million was wagered on Polymarket around the launch and initial valuation, turning tokenomics into an immediate market referendum.
The design choice at the center of the debate is the supply split. Lighter allocated LIT on a 50/50 basis between ecosystem incentives and insiders, with 26% for the team and 24% for investors, while a 25% community airdrop was immediately in circulation at launch.
The token is allocated between the ecosystem (50%) and team/investors (50%). Points seasons 1 and 2 that ran in 2025 have yielded 12.5M points that will be immediately airdropped, equating to 25% of the fully diluted value.
— Lighter (@Lighter_xyz) December 30, 2025
Tokenomics scrutiny and trust optics
The pushback from parts of DeFi was direct and blunt. Critics called the insider allocation “wild” and “excessive,” reflecting concentration anxiety and the fear of future sell-pressure once restrictions roll off.
Lighter’s structure tries to frame incentives and accountability through a corporate wrapper and explicit mechanics. The protocol routed on-chain revenue tracking through a U.S. C-Corp and said proceeds would be split between growth initiatives and token buybacks.
Even with vesting guardrails, optics mattered in the run-up. A reported $30 million withdrawal ahead of launch and an initial release that put about 25% of fully diluted supply into circulation added a trust premium to the trade.
Polymarket, pre-positioning, and early price discovery
Into that backdrop, positioning became a story of its own. Polymarket priced the launch timing with a 97% probability of a December 30 TGE, with more than $4 million traded on that single date and about $74 million wagered across FDV and timing markets.
Leverage entered the conversation before spot markets fully set the tone. A pre-market perpetual listing on a rival derivatives venue enabled leveraged longs and shorts, amplifying volatility and making the launch feel like a coordinated stress test of liquidity.
Once trading began, expectations snapped to a more grounded mark. Reported FDV settled near $2.41 billion—below pre-market optimism that pushed toward $3 billion—and on-chain probability for clearing $2 billion slipped from 85.5% to 76.3% after trading went live.
Whale behavior reinforced the split narrative rather than resolving it. Market microstructure looked bifurcated, with some large players building leveraged shorts while others returned from dormancy to put on meaningful long exposure.
Lighter’s operating metrics are the counterweight bulls point to when defending the valuation. Before the token launch, the protocol had exceeded $500 million in TVL prior to mainnet and averaged about $2.7 billion in daily perpetuals volume in the week leading into TGE.
This launch forced a trade-off decision in real time. LIT crystallized the tension between aggressive distribution economics and strong throughput signals, leaving traders and treasuries to price concentration risk against product traction and backer support.
