We are rolling out staking of LIT on Lighter! Here we will describe the initial utility from staking and how it will affect the Lighter ecosystem.

Access to financial products is an important use case for LIT. To start with, access to LLP will be available to users who are staking LIT. For every 1 LIT staked, 10 USDC can be deposited into LLP, effectively immediately.

There will be a two-week grace period, ending on Jan 28, during which existing LLP holders can keep their capital there. After that, staked LIT will be required to stay in the LLP.

This will lead to a greater alignment between LIT holders and LLP holders and the LLP risk-adjusted returns will be enhanced as a result. Similar mechanics will be introduced for other public pools, following our vision of democratizing on chain hedge funds.

Premium fees for market makers and high frequency trading firms will be adjusted in the next two weeks as well. Overall fees will be higher and staking LIT will lead to fee discounts, such that the lowest fee tiers will be around current levels.

We will roll out the exact details of premium fee tiers in the days before then so that trading firms have time to adjust their algorithms. Importantly, trading for retail will remain free on Lighter.

Staking LIT on Lighter will receive yield and we will start publishing the APR once that goes into effect. Initially, the yield will come from staking rights that would be granted to premium users.

In addition to these features, staking 100 LIT will enable zero fees for withdrawals and transfers. Also, please note that staking will be rolled out to mobile users in the coming days.

As we continue to develop the use cases from LIT, we welcome feedback from the trading community!