The perpetual DEX (decentralized exchange) space is about to enter a new dynamic change after Lighter launched its LIT token.
The privacy-focused, Ethereum-based DEX recently punched above its weight in terms of perp volumes, a move that experts attributed to Aiddrop farmers.
With farming almost complete and after $625 million worth of LIT shared with early adopters, analysts projected that these traders will migrate to another platform, notably Hyperliquide (HYPE).
According to analytics firm Bubblemaps, the projection may have been validated amid massive post-TGE (token generation event) DEX withdrawals.
The company note this $250 million was withdrawn from the DEX one day after the TGE. Amid capital flight, Bubblemaps wondered:
“Are all the farmers leaving?
Taking into account deposits, the overall net outflow from DEX rose at approximately $101 million.
Source: Artemis
In response, one user clapped back at Bubblemaps: call withdrawals are “normal”.
“It’s a bit normal. Considering the distribution of $650 million in airdrops, $250 million is not huge.”
Another analyst against that the withdrawals did not come from traders but from liquidity providers.
Lighter perp volumes are slow
That said, Lighter’s perp volumes have fallen since late November. Weekly volume fell from $66 billion to $31 billion at the end of December – a 50% drop in traction.
Source: Artemis
However, it should be noted that Hyperliquid volumes perp. also halved, from $41 billion to $26 billion over the same period. In short, it was still too early to conclude that Lighter users had indeed switched to Hyperliquid.
LIT price shows mixed results
Nonetheless, the $625 million in support put 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 bounce higher, citing the past performance of competitors such as HYPE and ASTER after their respective launches.
Source: LIT/USDT, TradingView
During this time, there were slightly more people shorting the altcoin than buying it on the derivatives market. According to Coinglass, 54% of Binance’s top accounts were betting against LIT, compared to just 45% considering a takeover at press time. This highlighted short-term downward pressure.
Source: CoinGlass
Final Thoughts
- Lighter saw significant capital outflows right after the launch of its LIT token.
- Short-term positioning was slightly biased to the bears as short bets outpaced long bets.
