Key Highlights
- Justin Sun withdrew $38 million from the Lighter Liquidity Protocol to fund a major asset acquisition.
- The Tron founder deployed $33 million to accumulate 13.25 million LIT tokens, representing over 5% of the circulating supply.
- Around $5.5 million remains in his spot balance, while another $162 million is still held within the protocol.
Justin Sun, founder of Tron, has increased his holdings in the LIT token by using funds from the Lighter Liquidity Protocol (LLP). Sun has converted about $33 million into 13.25 million LIT tokens over the past week.
This purchase, announced on Thursday, seems to be a targeted acquisition of the asset, as it makes up a large part of the token’s available supply.
Aggressive LIT purchases
Recent data show a rise in Sun’s activity. A previous report on December 30 indicated a smaller initial withdrawal of $5.2 million USDC to buy 1.66 million LIT. Now, his total withdrawals from the LLP have reached roughly $38 million.
Out of this amount, $33 million has gone directly into LIT purchases, leaving around $5.5 million in Sun’s spot account. His current holding of 13.25 million LIT is about 1.33% of the total supply and 5.32% of the circulating supply.
The $200M LLP Deposit
The activity follows a time of heavy investment from Sun into the Lighter Liquidity Protocol. Earlier this month, Sun deposited an estimated $200 million into the LLP, creating a large liquidity base for the platform.
Market observers began tracking the wallet address, 0xD6C7Ef…116, as it began systematically withdrawing USDC from the protocol to buy LIT. This has caught the attention of the wider crypto community, with some users saying, “You don’t casually deploy size like this.”
The accumulation comes amid a volatile launch period for the protocol. In December, Lighter faced scrutiny following allegations that insiders had rigged airdrop bets on Polymarket. Despite this, the LIT token launched on December 31 with a $2 billion fully diluted valuation (FDV). It ranked third among perpetual DEXs.
The listing followed earlier speculation sparked by a huge 250 million LIT token transfer on December 20, which many suspected was a precursor to the airdrop and subsequent market listing.
Concerns over airdrop distribution
Further investigation into the protocol’s distribution has raised questions regarding a specific entity that deposited $5 million USDC into the LLP around nine months ago. This capital was split across five wallets, including 0x30cD78B…6164 and 0x9A6D98…6caD, eventually receiving 9,999,999.60 LIT from the airdrop, valued at roughly $26 million. When including LLP yield, this entity’s returns are estimated to be an additional $1-2 million.
This allocation represents around 1% of the total LIT supply and approximately 4% of the circulating supply. Analysts noted that the entity used five different clusters to consistently split the LIT evenly across five wallets. Since the token generation event (TGE), approximately 2,760,232.88 LIT (worth about $7.18 million) from this specific airdrop allocation has already been sold.
With over 5% of the circulating supply now held by a single entity, the liquidity and price volatility of LIT could undergo significant changes. Additionally, Sun still has a large balance of $162 million in the LLP. If he continues to withdraw at this rate to buy LIT, his ownership percentage could give him major influence over the token’s ecosystem and governance.
Also Read: Analysts Speculate on LIT Token Valuation Ahead of Lighter Airdrop
