LIT Token Plummets 22% as Lighter Airdrop Distribution Goes Live

The LIT token, part of the decentralized perpetuals exchange Lighter, experienced a significant drop of approximately 22% shortly after its airdrop distribution commenced. This decrease in value was primarily driven by heavy selling from early recipients and leveraged traders. Despite the price downturn, trading volume surged, indicating heightened market activity, mainly due to speculation rather than long-term accumulation.

Key Takeaways

LIT token dropped 22.2%, hitting a low of $2.62 after an airdrop that distributed around 198.86 million tokens.
Trading volume increased significantly to 13.43 million in 24 hours, nearly three times the previous day, driven by short-term trading.
A majority of wallets (45.88%) sold off their airdrop tokens, illustrating a dominant selling pressure.
The tokenomics of Lighter, which allocated an equal split of LIT supply to users and investors, has come under scrutiny.
Lighter continues to perform well in the rapidly growing on-chain derivatives market, processing substantial trading volumes.

LIT Token Drops 22% as Lighter Airdrop Goes Live

Price Drop Following Airdrop Distribution

LIT, the newly released token from the decentralized perpetuals exchange Lighter, took a nosedive in pre-market trading on Tuesday. The much-anticipated airdrop distribution led to intense selling from early token recipients and leveraged traders. After reaching a post-launch peak of $4.04 shortly after trading began, the token's price soon reversed sharply, decreasing to approximately $2.62—a decline of around 22.2%.

LIT Price Movement

This price shift marked the lowest level for LIT since its launch, showing continuous downward pressure as the market adjusted to the large influx of distributed tokens.

Increased Trading Volume Amid Declining Prices

Despite the sharp price reduction, trading volume surged over the last 24 hours, reaching 13.43 million LIT—almost three times the volume recorded the day prior. This spike in trading activity suggests greater market participation, driven mainly by volatility and short-term speculation rather than a commitment to long-term holdings.

Since hitting its peak, LIT has traded nearly 35% lower and is now navigating a post-launch correction phase, with ongoing price discovery efforts.

On-chain data related to the airdrop provided insights into the selling pressures. An analysis of 10,000 wallets shortly after the distribution revealed that participants had collectively received around 198.86 million LIT tokens.

Wallet Distribution

Currently, the remaining balances in these wallets stand at approximately 183.29 million LIT, indicating that a substantial portion of the airdropped supply has already been sold off. Only 7.77% of wallets increased their holdings, while 45.88% opted to reduce their balances, and 46.35% made no changes. This trend highlights that selling activity greatly surpassed token accumulation.

In absolute terms, close to 150.34 million LIT, or about 75.6% of the airdropped tokens, remain held. Conversely, around 48.52 million tokens, or 24.4%, have been sold or transferred to other wallets. Furthermore, only about 32.95 million LIT—representing 16.57% of the total—can be classified as newly accumulated beyond initial distributions. This imbalance signals that the demand to buy is trailing behind selling activity in the early trading phase.

Selling Pressure Amidst Lighter's Notable Airdrop

Derivatives market data corroborated these observations, showing clear signs of aggressive selling for LIT perpetual contracts over various time frames. The net delta, which gauges market flow, was negative by about $108,000 in just one hour, expanding to nearly $1 million over four hours and worsening to over $6 million within ten hours.

Market Pressure

Recent hourly net flow data further illustrated repeated downturns, suggesting that any price recoveries faced immediate resistance from renewed selling.

The sell-off followed one of the most substantial token giveaways in cryptocurrency history, as Lighter airdropped around $675 million worth of LIT tokens to its early users. This event ranks as the 10th largest airdrop by dollar value, according to CoinGecko data, surpassing the 1inch Network’s 2020 distribution but falling short of Uniswap’s record-setting airdrop valued at $6.43 billion. Some of the early participants reported receiving allocations in the six-figure range, showcasing the airdrop's scale.

Meanwhile, discussions surrounding Lighter's tokenomics have intensified. Half of the total LIT supply is designated for users, partners, and growth initiatives, while the remaining half is reserved for team and investors, under a vesting schedule with a one-year cliff.

Lighter's Strong Trading Metrics in a Growing Market

Lighter has demonstrated impressive trading performance in a rapidly expanding on-chain derivatives market. The platform recorded approximately $3.90 billion in perpetual volume over a 24-hour period and about $201 billion over the past 30 days, positioning it among the leading decentralized exchanges alongside Hyperliquid and Aster.

This year, the overall perpetuals DEX sector has witnessed explosive growth, with cumulative volume soaring to $12.09 trillion and surpassing $7.9 trillion generated within just a single year.