Lighter Valuation Surpasses Pump.fun and Jupiter: Can LIT Overtake Hyperliquid?

Lighter (LIT) is a decentralized perpetual futures exchange operating on Ethereum Layer 2. Following the distribution of 25% of its total supply via an airdrop, investors are optimistic that LIT's market capitalization will keep rising.

Key Takeaways

Lighter (LIT) is a decentralized perpetual futures exchange with a current valuation of approximately $2.7 billion, gaining significant investor interest.
After a successful airdrop and substantial whale investments, Lighter's trading volume is competitive against established players like Aster and Hyperliquid.
Despite optimism about its potential rise in market valuation, analysts caution about higher valuations relative to weaker fundamentals and declining revenue trends.
Investors are advised to keep an eye on Lighter’s performance against market trends for long-term sustainability.

This article explores why investors are keen on Lighter's potential and what risks they should be aware of.

Lighter's Valuation Surpasses Pump.fun and Jupiter

Recently, Lighter secured $68 million, reaching a valuation of $1.5 billion. Shortly after its launch, Coinbase added the trading pair LIT/LIGHTER-USD, with the price now hovering between $2.70 and $2.90, leading to a fully diluted valuation (FDV) nearing $2.7 billion.

After the airdrop, there was notable movement from a major investor. On-chain analytics service Lookonchain reported that at least three whale wallets put 9.98 million USDC into Lighter to acquire LIT tokens.

According to BeInCrypto, large purchasers have been absorbing the LIT supply, which helps to sustain buying pressure and support the price. This behavior indicates that some investors are optimistic about LIT’s upside potential, especially during its initial price discovery phase.

CoinGecko data shows that Lighter's valuation has already outpaced Pump.fun and Jupiter, positioning it fourth in the Decentralized Exchange (DEX) Coins sector, following Hyperliquid, Aster, and Uniswap. Investors are hopeful that Lighter's FDV could extend beyond $2.7 billion.

Investors Believe Lighter's (LIT) Valuation Could Match Aster or Hyperliquid

Several factors support this optimistic outlook:

First, Lighter has gained considerable traction. Dexu AI indicates that Lighter (LIT) currently enjoys the highest awareness among perpetual derivatives protocols.

After Jupiter and Hyperliquid, Lighter ranks third in terms of smart followers and has cultivated a strong community of advocates.

Second, though it’s recently launched, Lighter's 24-hour trading volume is competitive with Aster's and is closely following Hyperliquid. Furthermore, its trading volume over the last 7 and 30 days has outperformed both competitors.

Investor Alex noted, “It’s a very close competition: Hyperliquid, Lighter, and Aster. Only one will win…”

Given this momentum, investors believe Lighter could reach an FDV similar to Aster’s estimated at $5.5 billion, suggesting that LIT's price could potentially double from its current level of $2.70. Some even anticipate that LIT might surpass HYPE, as Hyperliquid has an FDV around $25 billion, indicating a potential tenfold increase for LIT.

That said, these comparisons largely depend on market sentiment driven by hype. Some analysts express skepticism.

What Risks Should Investors Consider?

X user Henrik pointed out that Lighter has lost around 25% of its open interest over the past three weeks. He also compared the price-to-earnings (P/E) ratios of both LIT and HYPE, revealing that LIT trades at a higher valuation despite having weaker fundamentals.

“Currently, LIT is pricier than HYPE on both circulating and fully diluted metrics, despite the lack of strong fundamentals. Moreover, 100% of Hyperliquid's revenue goes to buybacks, whereas LIT's revenue distribution and token value accrual are still ambiguous. Fundamentally, there’s no obvious catalyst for LIT, and airdrop-driven fluctuations are likely to continue for a while,” Henrik commented.

Additionally, revenue trends raise flags. Analyst TylerD reported a drop in Lighter’s revenue from $1.5 million per day on November 21 to just $150,000 per day by December, a tenfold decrease.

Historical data indicates that airdrop incentives can temporarily boost trading volume and revenue. However, for sustainable growth, Lighter must demonstrate clear competitive advantages and remain resilient in the face of broader market pressures.