Lighter, an Ethereum-based perpetuals DEX, has experienced a significant decline in its $LIT token value following its token generation event (TGE) on December 30, 2025. The token, which debuted near $3.70 and peaked at $4.04, has plummeted to $2.05 by January 13, resulting in a market cap of $514 million. This sharp drop has raised concerns about Lighter's long-term sustainability and competitive edge against established platforms like HyperliquidX. Despite the decline, analysts note that Lighter's trading volume remains genuine, though it has decreased from over $10 billion to a base of $2-4 billion. Market analyst jez highlights that while Lighter's daily volume growth reflects real trading activity, the platform's focus should extend beyond trading revenue to secure market share. However, critics like Simon Dedic of Moonrock Capital argue that Lighter's strategy lacks long-term viability, pointing to declines in key metrics such as new users and total value locked (TVL). The platform's future success may hinge on developing unique features to differentiate itself from competitors. As 0xLouisT notes, HyperliquidX monetizes its trading volume at a rate 10 times higher than Lighter, underscoring the need for Lighter to innovate beyond merely undercutting fees to regain market dominance.