Lighter’s (LIT) dominance in perpetual DeFi peaked at nearly 60% in mid-December 2025, reflecting strong post-launch momentum. This increase follows a spike in activity caused by airdrops and aggressive liquidity incentives.
However, as incentives normalized, participation cooled and volumes declined sharply. In January 2026, the industry-wide contraction intensified the pressure, while total daily revenue volume fell to between $15 billion and $20 billion, a decline of around 30% year-on-year.
Source: Laevitas/X
As Lighter’s share declined, Hyperliquid (HYPE) regained some ground, moving back toward 40-50% control. This rotation reshaped competitive dynamics, while Paradex and DYDX captured additional flows during spikes in volatility.
Although Lighter briefly recovered in early February, its stock slipped again toward 25%, signaling a waning of speculative momentum.
Despite this, Lighter maintains structural depth in the Bitcoin (BTC) and Ethereum (ETH) contracts, holding over 50% of the open interest in the key pairs.
Thus, even though overall volume has declined, its core liquidity base remains resilient amid tightening macroeconomic conditions and reduced incentive trading.
Hyperliquidity rises thanks to Lighter liquidity leak
Lighter captured nearly 60% market share at the end of 2025 due to no fees and an impending flow of airdrops concentrated on a single site. This series of incentives attracted short-term traders, so volumes increased as the appetite for leverage increased.
By the end of 2025, industry revenue reached $7.9 trillion and lighter briefly replaced hyperliquid in everyday activity. Then the catalyst reversed. The December 30 LIT airdrop converted the “redeem for points” demand into a “sell and go” behavior.
As LIT fell 45% in mid-January, yield-focused portfolios unraveled, reducing repeat volume and sticky participation. As that cohort faded, Lighter’s share shrank to 25%, then slipped to about 8.1% by mid-February, following the rankings shakeup.
At the same time, the market grew faster than Lighter could hold its flow. Total perps volume doubled to $14 trillion in six months, so any slowdown meant rapid stock dilution.
Hyperliquid absorbed the migration with a 23.4% share and 70% open interest hold, while Aster and EdgeX siphoned off additional flows through latency, rebates and new incentives.
The strategic positioning of Justin Sun
The cash outflows had already weakened Lighter’s position when large token moves began to surface. After the drop, volume dropped and market share fell from 60% to single digits. As this decline developed, the focus shifted from stock market competition to token positioning.
This shift became clearer when Tron founder Justin Sun moved nearly 10 million LIT into hot exchange wallets. Arkham data shows that 7.212 million LIT were sent via one route, followed by another 5 million via a second deposit route.
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Around the same time, other wallets added 1-2 million LIT in the same infrastructure. This grouping signaled preparation for rapid execution if volatility increased. Once funds hit hot wallets, transparency decreased while put options increased, putting pressure on sentiment.
Meanwhile, Wintermute has built up LIT inventory, reinforcing expectations for higher activity. In contrast, HTX funneled 6.5 million LIT to the zkLighter infrastructure, indicating ecosystem supply rather than an immediate sell-off.
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Overall, Sun’s positioning reflects strategic flexibility, supporting Lighter’s recovery narrative while remaining ready to execute if market conditions deteriorate.
Final summary
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Exhaustion of incentives and post-airdrop exits drained Lighter’s speculative flow, allowing Hyperliquid to absorb liquidity and take leadership in structural derivatives.
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Whale routing and market maker stocks create hedged positioning, balancing ecosystem support with execution readiness amid Lighter’s fragile recovery phase.
