\n
<\/p>\n
\n\t\t\t\t\t\t\t\t\tLighter reported that its upgraded liquidity pool system successfully limited ADL losses to a pre-determined threshold.\t\t\t\t\t\t\t\t<\/p>\n<\/p><\/div>\n
On February 26, Lighter, a decentralized crypto exchange, announced that its upgraded liquidity pool system successfully resisted a $50 million ARC perpetual long squeeze attempt.<\/p>\n
This occurred after approximately 600 traders reversed a whale\u2019s position, resulting in an $8.2 million loss, and the episode tested Lighter\u2019s newly launched LLP Strategies, capping the downside risk for liquidity providers at just $75,000.<\/p>\n
In a February 17 post on X, Lighter announced<\/a> changes to its LLP infrastructure, splitting liquidity into separate strategies for different market types, including RWAs. Risk, liquidations, and auto-deleveraging are now handled at the strategy level rather than across the entire pool.<\/p>\n That structure faced what the platform called<\/a> its \u201cfirst battle test\u201d on February 26. According to Lighter, a trader had built a large long position in ARC perpetuals over several days, with around 600 other traders and market makers taking the short side and pushing total open interest to $50 million.<\/p>\n ARC perp trading was assigned to Strategy #7, a high-risk strategy with about $75,000 in allocated USDC. Lighter said this meant only that portion of LLP deposits could be exposed if auto-deleveraging occurred.<\/p>\n As ARC\u2019s price fell around 6 p.m. ET on February 26, the large long position was first liquidated on the order book for roughly $2 million. Lighter said LLP was initially in profit on the position, but further downside depleted Strategy #7, triggering another ADL at 0.071123. In the end, the whale lost about $8.2 million, LLP lost its capped $75,000 allocation, and short traders who held their positions were profitable.<\/p>\n The unwind left visible scars on the ARC price chart, with data from CoinGecko showing the token experienced a flash crash in the early hours of February 27, sliding from around $0.031 to $0.025 before recovering to $0.0348.<\/p>\n At the time of writing, ARC, which powers the Ryzome agentic AI \u201capp store,\u201d was down over 9% in 24 hours and nearly 59% across seven days. The token has also lost more than 63% of its value in the past two weeks, as well as falling 42% over 30 days. It currently sits 95% below its January 2025 all-time high of $0.62, having shed nearly 88% off its price in the past year.<\/p>\n This turbulence matches up with observations from crypto commentator Simon Dedic, who noted<\/a> that ARC\u2019s value had dipped overnight by about 80% on volumes approaching $400 million, which was nearly ten times its fully diluted valuation.<\/p>\n Dedic pointed out that before dumping, the token had been \u201cmassively outperforming\u201d despite a weak market, even suggesting it had been \u201cheavily manipulated.\u201d<\/p>\n The concerns raised by Dedic echo a broader industry debate about market integrity. Just last month, Base co-founder Jesse Pollak rejected<\/a> the idea of behind-the-scenes manipulation, stating his team won\u2019t coordinate or deploy capital to influence prices because markets \u201cdeserve to be free, open, and fair.\u201d<\/p>\n LIMITED OFFER for CryptoPotato readers at Bybit: Use this link<\/a> to register and open a $500 FREE position on any coin!<\/b><\/p>\n<\/div>\n<\/div>\nARC Price Collapse<\/h2>\n
You may also like:<\/h3>\n
\nBinance Free $600 (CryptoPotato Exclusive): Use this link<\/a> to register a new account and receive $600 exclusive welcome offer on Binance<\/b> (full details<\/a>).<\/p>\n