Lighter faces $250mln capital flight after token debut — What’s next for LIT?

The perpetual DEX (decentralized exchange) space is set to enter a new dynamic shift after Lighter launched its token LIT.

The privacy-focused, Ethereum-based perp DEX has been punching above its weight in terms of perp volumes lately, a move that experts attributed to aidrop farmers.

With farming almost over and after $625 million LIT has been shared with early users, analysts projected that these traders will move to another platform, especially Hyperliquid [HYPE].

According to the analytics firm Bubblemaps, the projection may have been validated amid massive withdrawals from the DEX post-TGE (token generation event).

The firm noted that $250M was withdrawn from the DEX a day after TGE. Amid the capital flight, Bubblemaps wondered,

“Are all the farmers leaving?”

Factoring in the deposits, the overall net outflow from DEX amounted to approximately $101 million.

In response, one user clapped back at Bubblemaps, calling the withdrawals “normal.”

“That’s kind of normal. Seeing the $650M airdrop distribution, $250m ain’t huge.”

Another analyst countered that the withdrawals weren’t from traders but from liquidity providers.

Lighter perp volumes slow

That said, Lighter’s perp volumes have fallen off the cliff since late November. The weekly volume has declined from $66 billion to $31 billion in late December – A 50% drop in traction.

Worth pointing out, however, that Hyperliquid’s perp volumes also dropped by half from $41 billion to $26 billion over the same period. In short, it was still too early to conclude that Lighter users have effectively switched to Hyperliquid.

LIT price post mixed results

Still, the $625 million aidrop exerted significant selling pressure on the token. After its debut, LIT fell 32% from $ 3.30 to $ 2.20. At the time of writing, the altcoin had recovered 18% to $2.6.

In fact, another analyst projected that LIT could rally higher, citing the past performance of rivals such as HYPE and ASTER after their respective launches.

Meanwhile, there were slightly more people shorting the altcoin than buying it on the derivatives market. According to Coinglass, 54% of Binance top accounts were betting against LIT compared to only 45% eyeing a recovery at press time. This underscored short-term bearish pressure.

Final Thoughts

• Lighter recorded significant capital outflows just after its LIT token launch.
• Short-term positioning was slightly tilted towards bears as short bets overwhelmed longs.