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$LITKEY, Lit Protocol's Token

Introducing $LITKEY, the native token of Lit Protocol.

Team Lit

• 4 min read
$LITKEY, Lit Protocol's Token

$LITKEY is the ticker and the native token of Lit Protocol. This token serves as a multi-faceted work, payment, and governance token. It’s used to secure and pay for services on the Lit Protocol network as well as contribute to network development through on-chain governance. $LITKEY will precede the launch of Lit’s v1 mainnet, Naga. 

As a decentralized and programmable key management network, Lit Protocol enables web3 developers to perform secure signing, encryption, and compute operations for virtually any use case. From chain abstraction, to wallet tooling, to private data management and autonomous agents, Lit provides essential infrastructure for building an open and user-controlled web. The mainnet beta network is securing over $150 million in crypto assets, has encrypted millions data points, and processes millions of signing, decryption, and compute requests each month.

Aside from ensuring liveness through staking and delegation, $LITKEY is used by builders to pay for the signing, encryption, and compute services provided by the network. Additionally, token holders play an important role in helping steer the direction and future development of the protocol through on-chain governance. 

$LITKEY will initially be airdropped to early adopters, ecosystem builders, testnet node operators, and other users based on various eligibility criteria. This is focused on ecosystem builders and also includes those participating in The Ciphernaut’s Path, which are quests to explore the ecosystem.

We're excited to announce that we are collaborating with Legion to grow the Lit Protocol community. You can learn more about this token sale by registering here*. 

Overview of $LITKEY

$LITKEY serves a multi-faceted role in the Lit ecosystem.

Work Token: Securing and Incentivizing Service Providers

The primary function of $LITKEY is that of a work token: It plays a dual role in enforcing network security and compensating participants for maintaining protocol liveness.

To participate in the Lit network, node operators must stake $LITKEY, committing economic value to signal their reliability and long-term alignment with network security. This staking mechanism ensures that operators have a vested interest in maintaining uptime, executing cryptographic tasks correctly, and adhering to protocol rules.

In addition to securing the network, $LITKEY is used to compensate node operators who perform signing, encryption, and computation operations by running the core Lit Protocol software. The protocol distributes token rewards to operators based on their relative contributions.

Payment Token: Paying for Network Services

Beyond its role as a work token, $LITKEY also functions as a service payment token like gas, facilitating both on-chain and off-chain operations with Lit.

$LITKEY is used to pay for signing, encryption, and compute operations provided by the network. Users and applications consuming the network’s services pay per-operation fees, ensuring that network resources are allocated efficiently while node operators are fairly compensated. Additionally, as the native token for Lit Protocol’s blockchain component, $LITKEY is required to make transactions on-chain, such as when generating new key pairs or staking.

Protocol Governance

LITKEY serves as a governance token for the Lit Protocol ecosystem, enabling token holders to direct the ecosystem’s evolution through a decentralized, on-chain governance system. Individuals holding $LITKEY play an important role in selecting network operators. Additionally, token holders can influence ecosystem growth by shaping partnerships, integrations, and network expansion. As the protocol matures, these governance mechanisms will continue to evolve.

$LITKEY Supply

Below is an overview of $LITKEY’s supply allocation:

  • Investors – Tokens for Lit investors. All investor tokens are subject to a linear four year vesting schedule with a one year lock following the TGE.
  • Team – Tokens reserved for the Lit Protocol development team, Workgraph Inc. All team tokens are subject to a four year linear vesting schedule with a one year lock following the TGE. 
  • Ecosystem Airdrop – Tokens allocated to ecosystem builders, testnet node operators, integration partners, and quest participants.
  • Public + Private Sale – Tokens allocated to public and community sales.
  • Ecosystem Incentives – Tokens allocated to ecosystem incentives will be used for grant funding, node rewards and incentives, ecosystem growth initiatives, and continued protocol development.

Lit V1: The Naga Network

Lit’s V1 Mainnet, Naga, will launch shortly after $LITKEY because the token is required to select the node operators. V1 will introduce several new features and performance enhancements, including:

  1. Agent App Store: Vincent is a framework built on Lit Protocol to enable agent builders to send transactions across crypto networks, TradFi (e.g. stocks) and e-commerce on behalf of their users. This is done without exposing any private keys or secrets to the agent or its developers. Think about this like oAuth, but for assets instead of data.
  2. New ECDSA Signing Algorithm: Naga will introduce a new underlying signing scheme for PKPs, a 2.5x performance improvement.
  3. EdDSA PKPs: Another new feature that will be included in the v1 release is EdDSA PKPs, enabling native threshold signing support for Solana, Sui, Penumbra, and other non-EVM blockchains.
  4. Simplified Payment Model: A new, simplified payment model will be released alongside Naga, replacing the previously established system of capacity credits. This model automatically debit tokens from a payment contract based on network usage.
  5. Long-Running Compute: With the launch of Naga and Lit’s new payment model, the 30-second Lit Action runtime limit will be removed. Additional upgrades will be pushed to enable exciting new use cases, such as running a headless browser inside of the TEE within the Lit node.
  6. Scaling via Realms: Realms are used to scale the Lit network and introduce greater liveness guarantees. Realms enable distinct sets of Lit nodes to manage the same underlying root key, meaning requests can be directed to the “optimal” Realm (based on traffic) in order to serve requests most efficiently.

The Lit Ecosystem

The Lit Protocol ecosystem is composed of a rich collection of builders, protocols, dApps, researchers, and hobbyists. There are hundreds of teams leveraging Lit for a myriad of use cases, including autonomous agent development, chain abstraction, content provenance and licensing, digital identity, user wallets, and more:

Resources

To stay up to date on the latest developments, you can follow Lit Protocol on X and subscribe to the Lit newsletter. If you’re a builder, you can get started using the Lit developer docs.

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