Lighter’s [LIT] The dominance of DeFi perpetuals reached a peak near 60% by mid-December in 2025. This is a reflection of the strong momentum that followed its launch. The surge in activity was driven by airdrops, and there were aggressive liquidity incentives.
However, once incentives were normalized, volume and participation dropped dramatically. By January 2026, sector-wide contraction intensified pressure, while total daily perp volume fell toward $15–20 billion, down roughly 30% year-over-year.
You can also read about the advantages of using Lighter’s share declined, Hyperliquid [HYPE] regained ground, climbing back toward 40–50% control. The competitive dynamics were re-shaped by this rotation, as Paradex and DYDX We can capture incremental flow during spikes in volatility.
Lighter recovered briefly in February but its share has now dropped to below 25%. This is a sign of a fading speculation momentum.
Even so, Lighter maintains structural depth in Bitcoin [BTC] You can also find out more about the following: Ethereum [ETH] Over 50% open interest in the key pair contracts.
While the headline trading volume has weakened, its liquidity core remains strong despite tightening macro-conditions and reduced incentives.
Hyperliquidity’s increase through Lighter’s liquidation drain
Lighter held nearly 60% of the market in 2025 due to zero fees, and an upcoming airdrop that concentrated flows on a single venue. The incentive stack drew in traders who were looking at the short term, and so volume grew as leverage appetite grew.
Sector 2025 is now closed. turnover Lighter temporarily displaced Hyperliquid as the daily leader in activity. When the catalyst changed, it shifted. The LIT airdrop on the 30th of December converted “trade for points” You can demand this into “sell and leave” behavior.
LIT fell 45% in mid-January as wallets based on yield unwound. This reduced the volume of repeat purchases and thinned out sticky participation. Lighter’s percentage dropped to 25% as that cohort left. It then fell further, down to 8.1% in mid-February when rankings were reshuffled.
The market expanded more quickly than Lighter was able to retain the flow. Total perps Volume doubled in 6 months to 14 trillion dollars, and any delay would result in rapid share dilution.
Hyperliquid, with its 23.4% market share, held a 70 percent Open-Interest hold, while Aster, EdgeX, and other players sucked in additional flows through rebates and new incentives, as well as latency.
Justin Sun’s positioning as a strategic player
When large token moves began to appear, Lighter was already in a weaker position due to liquidity outflows. Volume dropped and the market share fell from 60% to single-digits after the airdrop. The decline in exchange competition shifted the focus from token positioning to competitive exchanges.
This shift was made more apparent when Justin Sun, the founder of Tron, transferred nearly 10 millions LIT to exchange hot wallets. Arkham data indicates that 7.212 millions LIT were sent via one deposit route and another 5,000,000 through the second.
Source: X
Around the same time, other wallets added 1–2 million LIT into the same infrastructure. The clustering of wallets was a sign that the market would be ready to act quickly if volatility rose. Transparency decreased as funds entered hot wallets. Sell-side flexibility increased which impacted sentiment.
Wintermute, meanwhile, built LIT stock, instilling higher expectations. In contrast, HTX routed Injecting 6.5 Million LITs in the infrastructure of zkLighter indicates ecosystem provisioning, rather than selling immediately.
Source: X
Sun’s strategic positioning is a combination of flexibility and execution, which supports Lighter’s narrative for recovery, but also maintains its readiness to execute if the market conditions worsen.
Final summary
-
Lighter’s speculative flows were drained by the exhaustion of incentives and exits after airdrops. Hyperliquid was able to take advantage and absorb liquidity, and become a leader in structural derivatives.
-
In the fragile phase of Lighter’s recovery, whale routing and inventory build-up by market makers signal hedged position.
“This article is not financial advice.”
“Always do your own research before making any type of investment.”
“ItsDailyCrypto is not responsible for any activities you perform outside ItsDailyCrypto.”
Source: ambcrypto.com
