The dynamic landscape of DeFi perpetuals recently witnessed a dramatic shift in market dominance, as Lighter [LIT] experienced a rapid ascent and subsequent decline, while Hyperliquid [HYPE] strategically absorbed the resulting liquidity. This period highlights how quickly speculative momentum can turn, heavily influenced by incentive structures and market catalysts.
Lighter's Meteoric Rise and Post-Airdrop Reversal
Lighter initially commanded the DeFi perpetuals market, peaking at nearly 60% share in mid-December 2025. This impressive surge was fueled by aggressive liquidity incentives and a burgeoning "trade for points" demand ahead of its anticipated LIT airdrop. However, the catalyst flipped sharply after the December 30th airdrop. As incentives normalized and the LIT token price plunged by 45% post-airdrop, yield-driven participants exited en masse. This caused Lighter's market share to contract severely from its peak to as low as 8.1% by mid-February 2026. This exit created a significant liquidity drain, despite Lighter's continued structural depth in key Bitcoin and Ethereum contracts.
Hyperliquid's Ascent and Strategic Whale Movements
As Lighter's speculative flow diminished, Hyperliquid swiftly regained ground, climbing back to 40-50% control and absorbing a substantial portion of the migrating liquidity. This re-shuffled the competitive dynamics within the sector. Simultaneously, significant on-chain movements by major players signaled strategic positioning. Tron founder Justin Sun moved nearly 10 million LIT to exchange hot wallets, alongside other large deposits, indicating readiness for rapid execution amidst potential volatility. While Wintermute built LIT inventory, suggesting market-making activity, HTX routed a significant amount to zkLighter infrastructure, pointing towards ecosystem support. These whale actions reflect a complex balance between supporting Lighter's recovery narrative and maintaining agility in a fluctuating market environment.
