Lighter Platform $ARC Funding Rate Soars to 2100% Annualized! Whale with $24 million in heavy long positions sparks a bearish feast

On the decentralized perpetual contract platform Lighter, a high-risk funding rate game is unfolding: a whale has taken a heavy long position of $24 million in $ARC and continues to add to it every hour, pushing the funding rate to an extreme annualized level of 2100%. This creates an enticing “more you short, the more you earn” trap for short traders, while also filling the market with systemic risks of unknown magnitude.
(Background: Perpetual contracts crossing into prediction markets: Hyperliquid’s ambition and challenge with HIP-4)
(Additional context: BitMEX report: Cryptocurrency perpetual contracts enter the “post-profit era”)

Recently, an unusual event has attracted attention on Lighter: a large holder (whale) has accumulated a massive long position in $ARC, causing the funding rate to spike to an extreme annualized level of 2100%. Short traders, facing high funding costs, keep shorting, creating a complex game of risk and reward.

There’s quite an interesting situation going on at Lighter at the moment.
There is a guy that is long $24m of $ARC, and he continues to add $360k every hour on TWAP.
There are some similarities to the Jelly Jelly incident on Hyperliquid last year, and we saw a 10% drop in… pic.twitter.com/BJ7GKPGv1a
— Route 2 FI (@Route2FI) February 25, 2026

Cause of the Event: Whale Continues to Increase Long Positions

According to a post by well-known crypto analysis account @Route2FI on X (formerly Twitter), a trader on Lighter holds a long position worth about $24 million in $ARC, adding $360,000 per hour via TWAP (Time-Weighted Average Price). The whale has currently realized a profit of about $5 million, but their ultimate intention remains unclear.

Notably, this move resembles last year’s “Jelly Jelly” incident on Hyperliquid, where large orders raised concerns about systemic risk, causing temporary drops in related assets. However, Lighter’s design differs: its liquidity provider pool (LLP) does not automatically absorb such large positions. If the price continues to deviate, it may trigger an ADL (Auto-Deleveraging) mechanism, forcing the system to liquidate excess risk.

Extreme Surge in Funding Rate: The “High-Yield Trap” for Shorts

As the whale keeps pushing the long side, the funding rate for $ARC soared to 10% daily, equivalent to an astonishing 2100% annualized rate (later falling back to about 5% daily). This means short sellers not only suppress the price but also collect extremely high funding fees, effectively earning a daily “subsidy” from longs.

Many shorts have rushed in, continuously pushing the price down, creating a “the more you short, the more you earn” incentive. But this also increases market volatility, with $ARC’s price experiencing about 10% sharp swings in a short period, causing panic among some investors.

The whale’s “ultimate goal” remains a mystery. The market continues to watch whether this will develop into a larger liquidation storm or just another high-risk arbitrage game.