KEY TAKEAWAYS
- Oraichain Foundation is realigning its ecosystem to consolidate applications and improve liquidity.
- A new DeFi token, $LFG, will be introduced to separate AI and DeFi business lines.
- The $LFG token will launch on Solana, with a governance model allowing for farming and staking.
The Oraichain Foundation has addressed community feedback regarding its recent announcement on ecosystem realignment. The organization has acknowledged the confusion caused and has released a detailed FAQ to clarify its plans. The realignment aims to consolidate fragmented applications, communities, and tokens to reduce costs and improve liquidity.
The foundation has outlined the need for this realignment due to current operating and development costs, which range from $150,000 to $220,000 per month. Oraichain Labs is working to expand revenue streams to ensure sustainable operations. The foundation emphasizes the importance of stronger product narratives and disciplined execution.
Introduction of $LFG Token
As part of the realignment, Oraichain will introduce a new DeFi-oriented token, $LFG, while maintaining $ORAI as the AI-oriented token. The $LFG token will initially launch as a Perpetual Decentralized Exchange (Perp DEX) application and will eventually be integrated across Oraichain’s DeFi and AI-Finance applications. This move is intended to unify incentives and liquidity within the ecosystem.
The decision to introduce $LFG instead of using $ORAI is based on the need to separate the AI and DeFi business lines, which have different economic models and roadmaps. Additionally, the current supply of $ORAI is insufficient for the DeFi stack’s operating demand. The $LFG token will have a total supply of 10 billion, vested over five years, to support broad participation and utility across multiple applications.
Token Conversion and Governance
Eligible tokens for conversion to $LFG include $MAX, $ORAIX, $AIRI, and $RACKS. The conversion process will occur in two steps to ensure holders retain full utility during the transition. $KWT holders will receive an $LFG airdrop as a resolution, although this may occur after the $LFG Token Generation Event (TGE).
The $LFG token will be governed using a voting-escrow model known as veLFG. This model will allow for farming and staking, with implementation details to be published in product documentation. The $LFG TGE is targeted for October, with the token launching on the Solana blockchain.
For more detailed information, the full FAQ can be accessed here.
Why This Matters: Impact, Industry Trends & Expert Insights
The Oraichain Foundation’s announcement of an ecosystem realignment and the introduction of the $LFG token marks a strategic shift to optimize its operations and enhance liquidity within its ecosystem.
A recent report highlights that October 2025 is characterized by significant activity in DeFi token launches, including new tokens and unlock events across various projects. This aligns with Oraichain’s introduction of the $LFG token, reflecting a broader trend of expanding DeFi ecosystems through new token initiatives.
According to AInvest, economic models for DeFi token governance in 2025 emphasize robust governance mechanisms and token utility to drive platform growth and institutional capital allocation. This supports Oraichain’s strategy to introduce the $LFG token with a governance model aimed at enhancing its DeFi and AI-Finance applications.
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