Lighter airdrop analysis: The next Hyperliquid or an overvaluation trap?

TL;DR

Lighter has confirmed the transfer of 250M LIT tokens (25% of the total supply) to the distribution wallet, with TGE expected to be completed by December 31, 2025 (86% probability on Polymarket). While 24-hour trading volume ($3.1-4.5B) is approaching Hyperliquid's level, key metrics show significant differences: OI is only 1/5 of Hyperliquid's ($1.58B vs $7.5B), TVL is 1/3 ($1.37B vs $4.14B), and the zero-fee model limits revenue growth. The OTC presale price of $3-5 implies an FDV of $3-5B , a 2-3 times increase compared to the $1.5B funding valuation, raising the risk of airdropped farmers exiting the program.

Airdrop Core Details

Token Distribution and Timeline

The transfer of 250M LIT tokens has been confirmed as complete .

• Transfer time : 03:00 UTC on December 20, 2025
• Source address : 0x077842a5670cb4c83dca62bda4c36592a5b31891 (Team multi-signature wallet, holding 60% of the total supply)
• Target address : 0x98e7769167194a8cf272b649319676be84052b5f (allocated wallet, currently holding ~77.5M LIT)
• Percentage of total supply: 250M / 1B = 25%

Airdrop schedule :

• The deadline for submitting the allocation form is 14:00 UTC on December 26, 2025 (now closed).
• Season 2 Points Farming : Last batch distributed by December 26-27, 2025
• TGE Probability : Polymarket predicts an 86-93% probability of a trade before December 31st, with a trading volume of $9.5-11.7M.

Points system :

• Total points distributed: 9-12M points
• Market expected exchange rate: 20-28 LIT/point
• OTC points trading price: $600/point (implying LIT price $21.4-30)
• Witch/Volume Boosting Points have been reduced and redistributed.

A comprehensive comparison with Hyperliquid

Trading volume and liquidity metrics

Key findings :

• Lighter briefly surpassed Hyperliquid's daily trading volume during the Christmas holiday period (December 24-25) ($5-6B vs $3.5-5.6B), but the difference in OI and TVL was significant .
• Lighter leads in 30-day cumulative trading volume , but Hyperliquid's OI is 4.8 times higher , indicating that Hyperliquid has stronger position depth and capital retention capabilities.
• Lighter's daily active users were only 437 addresses (December 27th), a sharp drop of 85% compared to 2,976 addresses on December 22nd, indicating a decline in the activity of airdrop farmers.

Business Model and Revenue

The double-edged sword of Lighter's zero-fee strategy :

• Advantages : Attracts high-frequency traders and rapidly accumulates trading volume.
• Disadvantages : No protocol revenue , making it difficult to support token value capture and long-term operating costs.
• In contrast , Hyperliquid absorbs approximately 13% of the circulating supply annually through a fee-based buyback mechanism, thus creating a closed-loop value system.

Comparison of Token Economics

Lighter (LIT) :

• Total supply : 1B LIT
• Distribution supply : 0 (before TGE)
• FDV estimate : $3-5B (based on OTC price of $3-5)
• Valuation at the time of funding : $1.5B (November 2025, $68M funding)
• Token holding concentration : The top three addresses hold 82.75% (60% for the team, 7.75% for the allocated wallets, and 15% for others).

Hyperliquid (HYPE) :

• Total supply : 1B HYPE (maximum supply)
• Distribution supply : 238M HYPE ( 23.8% )
• Market capitalization : $6.18 billion
• FDV : $24.92B
• Price : $25.91 (ATH $59.30, -56%)
• Distribution structure : Genesis 51%, Core Contributors 39% (currently unlocking linearly over 24 months), Foundation 10%.

Valuation Analysis :

• Lighter FDV/Funding Valuation Multiple : 2-3.3x ($3-5B / $1.5B)
• Hyperliquid's market capitalization to FDV ratio : 0.248 (float market capitalization 23.8%)
• If the initial circulation of Lighter is similar (25% airdrop + some team release), a reasonable FDV target is $2-3 billion , corresponding to a LIT price of $2-3.

On-Chain Data In-Depth Analysis

LIT Token Holding Structure

Extreme centralization characteristics (before TGE):

Risk signals :

• The top investor holds 60% of the shares , indicating extremely high risk due to concentrated holdings in a single sector.
• The absence of exchange-linked wallets among previous holders suggests a potential large release of tokens after the CEX listing.
• The distribution wallet has allocated ~20M LIT to 20 addresses, with 230M LIT remaining to be released.

Trading activity and liquidity

Lighter Protocol Metrics (December 27, 2025):

• 24-hour trading volume : $3.13B (BTC/USDC $1.64B dominated)
• Open interest : $1.58B (BTC/ETH dominant)
• TVL : $1.37B (USDC deposit, Ethereum + Arbitrum dual-chain)
• Daily active addresses : 437 ( an 85% decrease compared to 2,976 addresses on December 22)

LIT futures market (pre-market trading):

• Total OI : $59.9M (+10.7% 24h)
  • Hyperliquid DEX: $33.4M (Largest Market)
  • Binance: $22.4M
• 24-hour liquidation : $46.4k (Shorts $27.4k > Longs $19.0k)
• Funding rate : +0.001-0.005% (long positions pay short positions, slight bearish signal)

Community sentiment and market narrative

KOL and analyst opinions

Bullish camp (based on technical analysis and background) :

• VC backing advantage : $68 million in investment from a16z, Lightspeed, Founders Fund, and Ribbit Capital endorses the project.
• ZK technology is superior : it uses custom ZK circuits to achieve verifiable matching and clearing, a technology that outperforms traditional CEX architectures.
• Tier-1 Potential : If it can capture a user base similar to Hyperliquid, trading volume could reach $10-20 billion per day.

Bearish camp (voting concerns about valuation and sustainability) :

• Overvalued : The valuation jumped from $1.5B in funding to $3.3-5B FDV (+120-233%), primarily driven by airdropped farmers rather than genuine demand.
• Revenue quality issues : Claiming 90% of trading volume comes from airdropped farmers , large-scale withdrawals are possible after TGE.
• The points-based OTC trading mechanism is a VC exit strategy : the $600/point trading system has been criticized as a tool for institutions to cash out early.

Neutral faction (wait-and-see attitude) :

• The community is calling for an AMA to clarify key issues such as the token release schedule, listing plans, and fee structure adjustments.
• Polymarket's forecast highly reflects market expectations (86%), but the probability drops to 70% after December 29th , suggesting a risk of delay.

Mainstream Narrative Analysis

Technical Analysis: LIT Price Trend

Price and Volatility (Binance Futures LIT/USDT)

Current price : $3.337 (as of December 27)

• 24-hour change : -4.1% (down from the high of $3.56)
• Key support : Lower Bollinger Band at $3.229 (1-hour chart)
• Key resistance : Bollinger Band upper rail at $3.543 (4-hour chart)

Multi-timeframe technical indicators

Risk signals :

• The daily RSI is at 82 , indicating an extremely overbought zone. Historically, this level has typically been followed by a 20-30% pullback.
• The 4-hour MACD shows a bearish divergence, suggesting a high probability of a short-term pullback to the $3.0-$3.2 support level.

Risk Factor Assessment

High-risk factors (🔴)

1. Overvalued :

   • An OTC price of $3-5 implies an FDV of $3-5 billion, representing a premium of 100-233% compared to a financing valuation of $1.5 billion.
   • Under the no-revenue model, the FDV/TVL ratio is 2.2-3.7 (Hyperliquid is 6.0, but it is supported by revenue).

2. Token concentration :

   • The top three addresses control 82.75% of the supply, posing a significant risk of selling pressure.
   • The airdrop allocation wallet holds 77.5M LIT (~$260M), and its daily release could impact the market.

3. Airdropped farmers exit :

   • Daily active addresses plummeted from 2,976 to 437 ( -85% ), and this may worsen after TGE.
   • Most OTC traders using points are short-term arbitrageurs, not long-term holders.

Medium-risk factors (🟡)

4. Zero-income model :

   • The lack of transaction fees results in a lack of cash flow for the protocol , making it difficult to sustain operations and token buybacks in the long term.
   • If transaction fees are introduced in the future, users may be lost to zero-fee competitors.

5. Market competition :

   • Hyperliquid has captured 56-73% of the perp DEX market share , demonstrating a significant first-mover advantage.
   • Mature projects such as dYdX, GMX, and Synthetix have formed a multi-polar landscape.

Low-risk factors (🟢)

6. Technology and Compliance :

   • The ZK circuit code has been open-sourced and passed audit (December 26).
   • Ethereum L2 deployments are composable and can be integrated into the DeFi ecosystem.

7. Institutional endorsement :

   • Top VCs such as a16z, Lightspeed, and Founders Fund provide liquidity guarantees.

Conclusion: A rational view of the "airdrop feast"

Core judgment

Lighter is unlikely to become "the next Hyperliquid" for the following reasons:

1. Fundamental differences : OI is only 1/5 of Hyperliquid's, TVL is 1/3 , and the zero-revenue model cannot support long-term token value.
2. Valuation bubble : OTC prices imply FDV of $3-5 billion, representing a 100-233% premium over a $1.5 billion financing valuation, lacking fundamental support.
3. Liquidity risk : The top three addresses hold 82.75% of the supply. An airdrop of 25% will cause the circulating supply to surge to ~30-35% , resulting in significant selling pressure.
4. User retention concerns : Daily active addresses have plummeted by 85% from their peak; the withdrawal of farmers after the TGE airdrop may cause a collapse in transaction volume.

Airdrop Participation Strategy

Conservative strategy (recommendation):

• Wait 1-2 weeks for TGE prices to stabilize , then observe actual trading volume and user retention.
• Pay attention to the liquidity depth after listing on a CEX to avoid rushing in during periods of low liquidity.
• Target entry price: $1.5-2.5 (Reasonable FDV $1.5-2.5B, P/S multiple reference dYdX/GMX)

Aggressive strategy (high risk):

• Participating in the airdrop allocation, TGE quickly took profit on the first day (target $3-5).
• Strictly set stop-loss orders (-20%) to prevent a sell-off and subsequent stampede.
• Long-term holding is not recommended until a revenue model is introduced in the agreement.

The essential difference between it and Hyperliquid

Final recommendation : Lighter's 25% airdrop is a short-term speculative opportunity, not a long-term investment . Investors should be wary of the risks of high valuations, a zero-revenue model, and concentrated selling pressure, and participate rationally rather than blindly chasing the trend.