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

A major crypto trader faced a steep hit 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 piled up a huge long position over several days, which pushed the total open interest in ARC to roughly $50 million. Meanwhile, around 600 other traders and market makers stood on the short side of that bet. The trouble began when ARC’s price slid around 6:00 pm ET on Wednesday. First, roughly $2 million of the whale’s position was wiped out by the order book. The rest was shifted into Lighter’s liquidity provider pool (LLP), where it fell under a high‑risk classification. To keep the system stable, Lighter turned on its auto‑deleveraging (ADL) feature. This move closed some profitable short positions just enough to allow the platform to unwind the whale’s massive long safely. At one moment, the LLP took in about 200 million ARC, worth around $14. 7 million, before the price kept falling and more of the position was reduced.Even though the liquidation was large, the damage to liquidity providers stayed small. Lighter kept ARC in a separate risk bucket, limiting losses for the LLP to about $75, 000. Short traders who had taken the opposite side of the whale actually made money. After the event, Lighter introduced new safety measures. It set a $40 million cap on ARC’s open interest and moved the pair 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. This episode highlights ongoing worries 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.