Lighter Responds to Whale's Failed Long ARC Attack: LLP Risk Control Mechanism Operates as Expected, Loss Cap Locked at 75,000 USDC

Odaily News Decentralized derivatives platform Lighter posted on the X platform in response to a whale's failed attempt to attack by going long on ARC. The LLP Strategies mechanism of the liquidity pool underwent its first real-world test in the past few hours, with results showing the system operated as expected, protecting both LLP holders and trader interests. A trader established an extremely large long position in the ARC perpetual contract relative to the market size, with approximately 600 other traders and market makers taking on the counterparty positions on the platform. The Open Interest (OI) eventually reached 50 million USDC at one point. LLP Strategies limited downside risk through "isolated sub-strategies" while preserving upside profit potential during price rebounds. Ultimately, the large long trader incurred a loss of approximately 8.2 million USDC, while the LLP loss was capped at 75,000 USDC. The short traders who took on the risk realized profits. Lighter stated that this event validates the LLP Strategies' capabilities for risk isolation and loss cap control under extreme market conditions.