Lighter Perp DEX Faces Sharp Decline Amid TGE Fallout

• $LIT fell to $2.05 after TGE, sparking questions about Lighter’s long-term sustainability and growth potential.

• Analysts note Lighter’s trading volume remains real, but market share alone won’t secure lasting success.

• HyperliquidX monetizes 10x more per volume, highlighting Lighter’s need for unique features to compete effectively.

Lighter, the Ethereum-based perpetuals DEX, has seen a steep drop in metrics since its token generation event (TGE) on December 30, 2025. The platform launched $LIT, a token with a total supply of 1 billion, airdropping 25% to users. It debuted near $3.70, peaked at $4.04, but fell sharply to $2.05 by January 13, resulting in a $514 million market cap.

The rapid decline has sparked debate over Lighter’s sustainability and ability to compete with established platforms like HyperliquidX. Investors and analysts are closely monitoring whether the platform can recover or if the market has moved on.

Volume Trends and Market Reactions

According to jez, a market analyst, “Lighter has seen volumes come in from 10bn+ to finding its base ~2-4bn again. The same this is the answer to ‘how much volume is organic.’” He added that Lighter’s daily volume growth reflects real trading activity, even if it remains below the airdrop-driven peaks.

Jez emphasized that trading revenue should not be the only focus, arguing, “Perps are a land grab and trading revenue for market share is a long-term winning strategy.” He predicts both HyperliquidX and Lighter will continue separating from smaller competitors, benefiting from immediate liquidity and economics rather than speculative hype.

However, Simon Dedic, founder of Moonrock Capital, criticized Lighter’s long-term strategy. He stated, “Lighter was nothing more than an opportunistic farm, designed for short-term extraction, dumping $LIT, and moving on to the next opportunity.”

Dedic highlighted that the project has consistently declined across all major metrics, including new users, TVL, fees, and activity. He warned that pursuing market share without product differentiation often leads to failure, citing past examples from Layer 1 networks and DeFi protocols.

Moreover, 0xLouisT noted a critical metric difference between Lighter and HyperliquidX. “HL monetizes its trading volume at a rate 10x higher than Lighter: a signal of pricing power. Unless you have significant product differentiation, simply undercutting the market leader on fees cannot be a winning strategy.”

Consequently, Lighter’s path to reclaiming market dominance appears challenging. Its future likely depends on creating unique offerings rather than replicating competitors’ models.