Airdrop of $675 million sparks distribution controversy; Lighter faces user retention challenges after token launch

Author: Jae, PANews

This year’s final airdrop suspense came to an end last night (December 30). Perp DEX (Decentralized Perpetual Contract Exchange) Lighter announced the completion of its airdrop distribution, totaling $675 million to early participants, bringing a glimmer of warmth to the cold market at the end of 2025.

Although the winter market is somewhat bleak, competition in the Perp DEX arena for liquidity and trading experience is becoming increasingly fierce. The industry is witnessing the gradual replacement of early automated market makers (AMMs) by high-performance centralized limit order books (CLOB). Based on zk-rollup, Lighter has quickly stood out, leveraging its zero-fee strategy and customized ZK circuit technology to attempt to redefine the standards of on-chain derivatives trading.

Historically, airdrops have been difficult to balance, and Lighter undoubtedly faces the same issues as other projects: user retention post-airdrop and dissatisfaction with initial distributions.

Polarized Reactions to Airdrops, Token Distribution Sparks Controversy

Lighter completed its TGE yesterday, with its protocol token LIT experiencing significant volatility in early trading. On pre-market trading across several centralized exchanges, LIT briefly reached a high of $3.9. After the official TGE, the price surged to $7.8 in a short period, then retreated and stabilized between $2.6 and $3.

According to Bubblemaps monitoring, the total amount airdropped to early participants on the first day of LIT’s launch reached as high as $675 million. Since the airdrop, approximately $30 million has flowed out of Lighter.

Lighter’s airdrop was relatively generous, but community reactions are polarized. Supporters argue that the initial airdrop accounts for 25% of the total supply, roughly $690 million directly distributed to Season 1 and Season 2 token holders, with no lock-up restrictions—standing in stark contrast to many projects with lower TGE token allocations; opponents believe that the conversion rate from Season 1 and Season 2 points is about 20 to 28 LIT per point. For high-frequency traders, this is roughly break-even with their trading fees, failing to deliver the expected “big payoff.”

The biggest controversy around this TGE concerns Lighter’s tokenomics. The total supply is 1 billion tokens, with 50% allocated to the ecosystem and the other 50% to the team and investors, with a 3-year linear unlock. The community criticizes this plan as “team-dominated”: while investor lock-ups are strict, the overall proportion is high, potentially diluting community benefits. The 25% unlocked airdrop tokens may create short-term selling pressure, and the 50% locked portion could lead to long-term potential selling pressure, hindering the healthy growth of LIT’s market cap.

From a valuation perspective, Lighter’s pricing directly benchmarks against Hyperliquid and Aster. Although its trading volume has at times surpassed these competitors, doubts about its valuation’s reasonableness persist.

CoinGecko data shows LIT’s current market cap is about $680 million, with a fully diluted valuation (FDV) exceeding $2.7 billion. A week ago, Polymarket’s prediction that “Lighter’s market cap will exceed $2 billion on the day after launch” had an 83% probability.

Lighter CEO Vladimir Novakovski stated in a podcast interview: “Tokens won’t skyrocket immediately after launch; the realistic expectation is to start from a relatively healthy position.” The founder of The Rollup, Andy, also tweeted: “If LIT’s FDV is around $2 billion, I would consider buying.”

Overall, Lighter’s TGE performance was largely in line with expectations, without surprises. Coupled with the overall market downturn, community response to the protocol has been modest.

Top Capital Bets on Harvard Genius to Build Lighter

Lighter’s story begins with its founder Vladimir Novakovski, a quintessential “kid from a good family” combined with Wall Street elite. He entered Harvard at 16 and graduated early, then was personally recruited by Ken Griffin, founder of Citadel Securities. This experience at a top-tier quant fund gave him deep insights into the microstructure of traditional financial markets and liquidity management.

However, this genius’s ambitions did not stop at Wall Street. He successfully founded Lunchclub, an AI social platform valued at hundreds of millions of dollars. In 2023, he keenly identified a gap in on-chain financial infrastructure, leading 80% of his team to pivot fully into crypto, dedicating themselves to developing Lighter.

“We invested in Lighter mainly because of Vladimir and his team’s engineering capabilities,” said Joey Krug, partner at Founders Fund, a top Wall Street VC. This reveals the underlying logic of capital betting: In highly complex technical fields, top talent density is the main moat.

In November 2025, Lighter announced a $68 million Series A funding round, with a post-money valuation of $1.5 billion.

Among the investors, the participation of well-known broker Robinhood may signal an important trend: Traditional financial giants are seeking infrastructure capable of supporting institutional-level trading volume for Perp DEXs. This not only provides funding but also introduces potential institutional users to Lighter.

ZK Empowerment Enables Lighter to Achieve 15K+ TPS, with Verifiability

2025 marks a watershed year for the Perp DEX sector. While early protocols like dYdX and GMX proved the feasibility of on-chain derivatives trading, they have struggled to match centralized exchanges (CEXs) in execution speed, slippage control, oracle latency, and liquidity depth. Lighter, however, adopts a CLOB model combined with high-performance Layer 2 architecture, achieving sub-second transaction times and higher capital efficiency.

The core logic behind this evolution is “verification as trust.” Lighter does not require users to trust the matching engine; instead, it generates verifiable cryptographic proofs for each order matching, risk check, and liquidation via customized ZK circuits. This architecture ensures that even if the sequencer attempts malicious behavior or is attacked, the underlying Ethereum mainnet contracts can safeguard assets.

Lighter’s technological moat is built on a seemingly paradoxical combination: decentralized trust (ZK) and centralized efficiency (CLOB). Its design emphasizes not only high performance but also transparency and non-custodianship, giving it a strong “Ethereum-native” attribute in its technical narrative.

Unlike many general-purpose ZK VM protocols, Lighter takes a more challenging route: designing custom ZK circuits for trading logic (zkLighter). This allows the protocol to generate proofs with high efficiency, reaching up to 15,000+ TPS and sub-10-millisecond finality, meeting the demands of high-frequency traders.

Notably, Lighter’s underlying data structure uses a “super-tree” architecture to ensure that even under high concurrency, each order’s execution price remains optimal at that moment.

To prevent extreme risks like sequencer offline or denial-of-service, Lighter has designed an “escape pod” mode. Since all account balances and positions are published as Blob data on Ethereum, users can generate their own account value proofs from public data history and withdraw funds directly on the mainnet without relying on the sequencer’s authorization. This mechanism enhances censorship resistance and asset sovereignty, surpassing self-built L1 consensus Perp DEX protocols.

Zero-Fee Model Reshapes Protocol Customer Acquisition Logic

Lighter’s ability to attract high-density capital and users hinges not only on high performance and verifiability but also on its triple innovation in fee structure, capital efficiency, and liquidation logic.

In a landscape where most Perp DEXs rely on trading fees for revenue, Lighter has thrown a “zero trading fee” bomb into the market.

The protocol has devised a clever dual-account model to balance commercial sustainability:

• Retail Account (Standard): No Maker or Taker fees for ordinary users. Although this introduces about 300ms of slight delay, it is highly attractive to most non-high-frequency traders.
• Premium Account: For institutions and high-frequency traders, offering zero latency channels but charging very low fees (Maker 0.002%, Taker 0.02%).

Currently, Lighter’s revenue mainly comes from premium account fees and liquidation charges, with daily income around $200,000, preliminarily validating its customer acquisition model.

However, due to market downturn, Lighter’s income has declined over the past week. The airdrop expectations have been fulfilled, but its actual revenue-generating ability remains to be seen.

If zero fees are the hook for attracting users, then the universal collateral margin (UCM) is the killer app for retaining professional funds.

Traditional Perp DEXs usually require users to deposit USDC or other stablecoins as collateral, which is capital-inefficient. Lighter introduces UCM, allowing traders to directly use interest-bearing assets stored on Ethereum L1 (such as stETH, LP tokens, or Aave deposits) as collateral for L2 leveraged trading.

The cleverness of this design lies in that users’ collateral assets do not need to be cross-chain transferred; instead, they are mapped to L2 via ZK proofs. This means users can earn L1 staking yields while opening positions on L2.

In case of liquidation, the system generates a cryptographic proof submitted to the L1 contract, automatically deducting the corresponding assets. This “assets stay put, credit extends” model greatly improves capital efficiency and eliminates the difficult choice between earning assets and trading funds.

Liquidation has always been a contentious point in Perp DEXs. Lighter uses ZK circuits to ensure that liquidation actions are fully verifiable, reducing the risk of malicious front-running or forced liquidations.

Additionally, Lighter has launched a risk-layered liquidity pool:

• LLP (Lighter Liquidity Provider): The main protocol pool, acting as counterparty and liquidation executor. It earns profits from losers, as well as capturing funding rates and liquidation fees. Currently, LLP’s annualized yield is around 30%.
• XLP (Experimental Liquidity Provider): A segregated pool designed for experimental assets (such as pre-market tokens, RWA, and low-liquidity altcoins). XLP does not participate in forced liquidations, and its risk exposure is isolated from the main protocol, suitable for higher risk-tolerance liquidity providers.

OI/Vol Ratio Long-Term Hovering at 0.2, Post-Airdrop Data May “Dehydrate”

The rapid rise of Lighter is not without shadows.

The exaggerated OI/Vol (Open Interest/Volume) ratio has triggered widespread skepticism. Although the ratio has recently rebounded, Lighter has long maintained a ratio around 0.2, meaning that on average, each $1 of open interest is traded about 5 times within 24 hours—significantly deviating from a healthy organic OI/Vol (<0.33), showing clear signs of wash trading.

This phenomenon mainly stems from Lighter’s aggressive point incentive scheme. Although the protocol employs referral code scarcity and weighted position duration for defense, the token generation event (TGE) has ended, and the high-frequency flow’s retention or exit will influence Lighter’s true market share.

Frequent outages of Lighter also reveal system stability issues. On October 9, the protocol experienced a 4.5-hour downtime. On December 30, a proof generator stall prevented users from withdrawing funds normally. For a derivatives platform handling billions of dollars, stability is life.

Lighter’s emergence signifies a new stage in Perp DEX evolution: from decentralization to verifiable high performance. By leveraging Ethereum’s security and ZK technology, it solves trust issues and enters the Perp DEX battlefield with a zero-fee strategy.

However, the competition in the Perp DEX sector is no longer solely about technology; it involves liquidity, community ecosystem, and product quality. Whether Lighter can grow from a tech dark horse to a leading player depends on its ability to continuously attract and retain genuine trading demand in the post-airdrop era.