Jump Crypto receives $24M+ from Lighter for market-maker activity

The recent Lighter airdrop may have favored whales. Over $24M in tokens were awarded to Jump Crypto for its large-scale activity as a market maker.

The Lighter airdrop was linked to whale wallets, with a significant allocation to Jump Crypto. The market maker was among the large-scale entities to farm points and receive significant token allocations.

Lighter allocated 25% of the tokens to the community with immediate unlocks, while team and other allocations remained vested. However, on-chain data suggests some of the community wallets may be linked to deliberate farming groups, leaving whales well-supplied with new LIT tokens.

Is the Lighter airdrop going to insiders?

The Lighter airdrop arrived after months of point farming. On-chain data shows the airdrop allocations are concentrated at the top, distributed among the most active wallets. Trading on the exchange was heavily incentivized, and whales could easily afford to farm points.

On-chain researchers noticed clusters of wallets that ended up with significant allocations. One cluster was traced to a total of $26M in LIT tokens following the airdrop.

Another batch of wallets was also connected to Jump Crypto, receiving over $24M in LIT tokens. The allocation was based on market maker activity from early November onward.

Jump Crypto received market maker allocation and fees

According to wallet allocations, Jump Crypto received 323,956 LIT, which was awarded as a fee for market making activities.

Before that, the market maker received 9,284,890 LIT as liquidity for its activities, or 0.93% of the total supply, or 3.72% of the circulating supply.

Using market makers on new exchanges has been a normal practice for crypto projects. Yet the inclusion of large-scale whales sets questions on the ability of LIT to survive early price discovery. Previously, Jump Crypto has also been active on Hyperliquid, becoming a large-scale holder of HYPE tokens.

Will the LIT token recover its rising trend?

LIT set out to become a revenue-sharing token, modeled after HYPE. After its launch, LIT peaked at $2.82. Since then, LIT started to slide, and is down to the $2.50 range.

LIT has a smaller community allocation compared to HYPE, and even the community tokens are taken into whale wallets or sniped by potential insiders.

In the early stages, LIT also fell to panic-selling, with fears it may repeat the fate of XPL and continue losing to new all-time lows. LIT still has limited derivative open interest, and only five whales are making bets on Hyperliquid.

Two of the Hyperliquid whales hold unrealized gains from shorting the token, while three are still holding long positions, signaling confidence in a price recovery.

Lighter has also hinted at a potential Coinbase listing, which would change the liquidity profile of the token. Now, Lighter has to show it can sustain its real demand and activity following the point farming season and initial token-listing hype.

Based on DeFiLlama data, Lighter fees have slowed down in December, from $1.39M daily down to $139K, a 90% shrinking of activity. The perpetual futures DEX recently passed Aster in daily volume, but is yet to prove its sustainability beyond the effect of whales and market makers.