Big Loss on Lighter: Whale Falls $8. 2M in ARC Bet

A major crypto trader suffered a steep loss of about $8.2 million after a risky move on the ARC perpetuals market went south on Lighter, a platform that handles decentralized derivatives. The trader had built up a huge long position over several days, pushing the total open interest in ARC to roughly $50 million. Meanwhile, around 600 other traders and market makers were on the short side of that bet.

The Slide Begins

At around 6:00 pm ET on Wednesday, ARC’s price began to slide.

• Roughly $2 million of the whale’s position was wiped out by the order book.
• The remaining position moved into Lighter’s Liquidity Provider Pool (LLP), where it fell under a high‑risk classification.

Auto‑Deleveraging (ADL) Kicks In

To keep the system stable, Lighter activated its auto‑deleveraging (ADL) feature. This closed some profitable short positions just enough to allow the platform to unwind the whale’s massive long safely.
At one moment, the LLP absorbed about 200 million ARC, worth around $14.7 million, before the price kept falling and more of the position was reduced.

Minimal Impact on Liquidity Providers

Despite the large liquidation, losses for liquidity providers were limited.

• Lighter kept ARC in a separate risk bucket, capping LLP losses to about $75 000.
• Short traders who had taken the opposite side of the whale actually profited.

New Safety Measures

After the event, Lighter introduced several safeguards:

• A $40 million cap on ARC’s open interest.
• The pair moved to a capped liquidity strategy, allocating about $100 000 USDC for that purpose.
• If that capital runs out, the system automatically switches to ADL to shut down risk.

The platform hinted that similar limits could apply to other assets in the future.

Broader Context

This episode highlights ongoing concerns about manipulation on decentralized exchanges. Earlier this year, a group of whales was accused of moving the price of Plasma (XPL) on Hyperliquid, causing a 200% jump in minutes. In another case, the DeFi protocol Resupply suffered a $9.6 million loss after an attacker exploited its wstUSR market through a synthetic stablecoin.