Segregated Witness (SegWit) implementation in Litecoin contributes to its scalability by separating transaction signatures from the transaction data, allowing more transactions to be stored in each block. This helps in reducing the size of each transaction, increasing the overall capacity of the network, and improving transaction speed. Additionally, SegWit also enables the implementation of second-layer scaling solutions like the Lightning Network, which further enhances the scalability of Litecoin_