TechFlow reports that on February 26, decentralized derivatives platform Lighter issued a statement on X addressing an attempted attack on ARC via excessive long positioning by a whale, which ultimately failed. The LLP Strategies liquidity pool mechanism underwent its first real-world test over the past several hours, and results confirmed the system operated as designed—safeguarding both LLP holders and traders alike. A trader established an exceptionally large long position in ARC perpetual contracts relative to market size; approximately 600 other traders and market makers on the platform assumed the opposing short positions. At its peak, the open interest reached $50 million USDC.
LLP Strategies limits downside risk through “strategy-level isolation,” while preserving upside potential during price rebounds. Ultimately, the large long-position trader incurred losses of approximately $8.2 million USDC, while LLP losses were capped at $75,000 USDC. Meanwhile, the short-position traders who bore the risk realized profits. Lighter stated that this incident validated LLP Strategies’ ability to isolate risk and enforce loss caps under extreme market conditions.
