A massive leveraged long in the ARC perpetuals market collapsed on Lighter, triggering auto-deleveraging but limiting liquidity provider losses to about $75,000A massive leveraged long in the ARC perpetuals market collapsed on Lighter, triggering auto-deleveraging but limiting liquidity provider losses to about $75,000

Whale loses $8.2M trying to squeeze thin liquidity ARC market on Lighter

2026/02/26 16:35
1 min read

A massive leveraged long in the ARC perpetuals market collapsed on Lighter, triggering auto-deleveraging but limiting liquidity provider losses to about $75,000.

A big crypto trader lost $8.2 million after a leveraged bet on the ARC perpetuals market unraveled on the decentralized derivatives platform Lighter, forcing the exchange to tap its backstop liquidity and trigger auto-deleveraging to manage risk.

Whale loses $8.2M trying to squeeze thin liquidity ARC market on Lighter

In a series of posts on X, the platform explained that the whale built a very large long position over several days, pushing total open interest in the ARC (ARC) market to about $50 million, while about 600 traders and market makers took the opposite side.

The trade began to fail when ARC’s price dropped around 6:00 pm ET on Wednesday. About $2 million of the position was liquidated on the order book, and the remaining position was moved into Lighter’s liquidity provider pool (LLP), where it was handled under a high-risk strategy category.

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