Five interconnected wallets have sold $7.18 million worth of Lighter tokens since the project's token generation event. The wallets received nearly 10 million LIT tokens from an airdrop, representing 4% of circulating supply, raising questions about insider distribution and transparency within the Ethereum-based decentralized finance protocol.
What Happened: Coordinated Sales
Blockchain researcher MLM identified an entity that deposited approximately $5 million USDC into Lighter's liquidity protocol in April 2025.
These wallets subsequently received a total of 9,999,999.60 LIT tokens valued at $26 million at distribution.
The uniform allocation represents 1% of total LIT supply and gives the entity considerable market influence. The wallets accrued an additional $1 million to $2 million from liquidity protocol yield, further increasing available assets.
Since the token generation event, the linked wallets have sold 2,760,232.88 LIT tokens worth roughly $7.18 million. The methodical nature of these sales suggests intentional liquidation rather than reactive trading, according to analysts tracking the activity.
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Why It Matters: Transparency Concerns
Analyst Henrik questioned the implications for LIT holders. "If this is correct, that's a serious concern for every $LIT holder, especially given the lack of transparent communication from the Lighter team," Henrik wrote.
The Lighter team has not issued official statements regarding token allocation, vesting schedules or distribution mechanisms. Without transparency, investors cannot distinguish between legitimate market activity and potential insider selling, according to community members monitoring the situation.
The controversy emerges during heightened scrutiny of airdrop distributions in decentralized finance.
While airdrops aim to reward early adopters and encourage decentralized ownership, coordinated deposits and uniform allocations can allow single entities to claim disproportionate rewards.
LIT traded at $2.53 as of Jan. 1, down more than 7%. The remaining 7 million LIT tokens in these wallets could create additional selling pressure if liquidated, according to market observers.
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