Lighter's TGE Trap: Why Making a Big Announcement About Token Launches Accelerates Decline

Lighter completed its Token Generation Event (TGE) in December 2025, creating the tenth-largest airdrop in crypto history with a scale of $675 million. Now, two weeks later, this once-star project has fallen into an awkward predicament: trading volume has plummeted, token prices have retreated from their highs, and user activity continues to decline. This is not only a problem for Lighter but also reflects the reality of increasing competition in the Perp DEX sector.

From Peak to Decline: Data Speaks

Signs of Lighter’s decline are evident across multiple metrics. According to the latest data, the platform’s 24-hour perpetual trading volume has dropped from first place ($1.779 billion) to third place ($1.569 billion), surpassed by Aster and Paradex. Meanwhile, the LIT token price has fallen from its high post-TGE to around $2.39, a decline of over 9%.

Platform revenue data has also been volatile. On January 12, Lighter’s daily revenue briefly reached $200,000 but then fell back to around $8,000. This sharp fluctuation reflects market concerns about the platform’s sustainability.

Airdrop Cash-Out and User Retention Dilemma

Hidden Risks Behind the $675 Million Airdrop

The $675 million airdrop is undoubtedly a “wealth creation story.” According to reports, many early users received returns ten times higher than expected through ongoing interactions, with some exchanging a few thousand dollars for five-figure airdrops. Such returns attracted a large number of participants.

But problems also arose: high-value airdrops are essentially a “customer acquisition cost,” not genuine user engagement. Once the airdrop ends, these users, motivated by cashing out, will naturally leave. Industry sources indicate that market participants are already evaluating “the next target,” with some studios even shifting focus to new projects like Variational.

The Siphoning Effect of Competitors

Another issue Lighter faces is the rapid rise of competitors. Hyperliquid established its market position in 2024, and new platforms like Aster and Paradex are quickly capturing market share. Interestingly, Lighter’s founder Vladimir Novakovski once interviewed Hyperliquid co-founder Jeff Yan while attending Harvard (at that time, applying for an internship at a financial management firm). Now, this “former interviewer” has been surpassed by the platform founded by the “interviewee.”

More specifically, Aster currently leads in 24-hour perpetual trading volume, reaching $1.779 billion. Market participants’ preferences are subtly shifting—some studios have explicitly stated that after Lighter’s token launch, skepticism about Perps has decreased, but they are now turning their attention to new platforms offering zero fees plus loss-rebate mechanisms.

A True Reflection of Market Confidence

A detail worth noting: on January 13, a whale transferred 10 million USDC to Lighter and opened a short position on LIT with 5x leverage, while spending $2.2 million to buy 1.059 million LIT at an average price of $2.08. This “hedging” behavior essentially reflects a pessimistic outlook on LIT’s price trend—while shorting, the whale also bought, indicating uncertainty about the token’s future movement.

Why Is This Happening

Personal Opinion

In a sense, Lighter’s decline reflects a common trap in crypto projects: over-reliance on airdrops to attract users while neglecting genuine product competitiveness. Large airdrops can indeed boost metrics quickly, but once they end, true user retention becomes apparent.

The competition in the Perp DEX sector has entered the second half. It’s no longer about who has the biggest airdrop, but who can offer better user experience, lower costs, and more stable systems. Hyperliquid demonstrated stability during its “flash crash stress test” in October last year, and Aster introduced a zero-fee mechanism—these are real product advantages.

Possible Turning Point

Lighter still has opportunities. According to industry reports, the platform is actively developing a mobile app, with testing underway, and a public release could happen as soon as this week or by the end of the month. A mobile app could be a new growth driver, especially for lowering entry barriers and improving trading convenience.

But the key is that product innovation must keep pace. Relying solely on a mobile app is not enough; Lighter needs to find its competitive edge in fee structures, user experience, and system stability.

Summary

Lighter’s predicament is essentially a microcosm of the intensifying competition in the Perp DEX sector. The $675 million airdrop created short-term buzz but also exposed the fragility of user retention. As competitors like Aster and Paradex demonstrate deeper trading liquidity, and market participants start evaluating “the next target,” Lighter must do more than just rely on airdrops. It needs to return to its core: providing the best trading experience, the most competitive cost structure, and the most stable system.

The upcoming launch of a mobile app may signal that Lighter is making adjustments. But in this highly competitive space, speed and execution are critical. The performance over the next two weeks could determine whether Lighter can reverse its decline.