Lighter (LIT)

(Had to delete and re‑write my prior tweet due to writing the tax stuff backwards.)

1. Not the Aster playbook; total tokens are fixed.

While the ecosystem tokens aren't circulating, they are a supply overhang.

Whether you buyback‑and‑burn or burn from Treasury, total supply is reduced.

The big difference is that in the former you spend capital in the open market, returning capital to $LIT holders. In the latter, the capital stays in the company to deploy for growth initiatives.

The other angle here is taxes. Lighter launched their token from their US Corp (rather than a foundation), which has some potential tax implications.

One area, which isn't fully vetted yet, is whether a disposition of Treasury assets (which were effectively acquired at a very low cost basis) would create a taxable event. e.g. If they do another airdrop, does Lighter incur a large tax liability?

Burns, on the other hand, are generally considered to be non‑taxable because there is zero benefit/proceed.

So, from a tax persp

(Had to delete and re‑write my prior tweet due to writing the tax stuff backwards.)

1. Not the Aster playbook; total tokens are fixed.

While the ecosystem tokens aren't circulating, they are a supply overhang.

Whether you buyback‑and‑burn or burn from Treasury, total supply is reduced.

The big difference is that in the former you spend capital in the open market, returning capital to $LIT holders. In the latter, the capital stays in the company to deploy for growth initiatives.

The other angle here is taxes. Lighter launched their token from their US Corp (rather than a foundation), which has some potential tax implications.

One area, which isn't fully vetted yet, is whether a disposition of Treasury assets (which were effectively acquired at a very low cost basis) would create a taxable event. e.g. If they do another airdrop, does Lighter incur a large tax liability?

Burns, on the other hand, are generally considered to be non‑taxable because there is zero benefit/proceed.

So, from a tax persp

capital rotation from $HYPE to $ETH will be biblical.