ARC funding rate surges to 2100% on Lighter amid whale long

Why ARC funding fee rate hit ~2100% on Lighter

The ARC funding fee rate on Lighter spiked to an annualized ~2100% after a sharp long–short imbalance developed in the perpetual market. In this structure, longs pay shorts when the contract trades rich to spot, so a concentrated build-up of long exposure mechanically elevates the funding transfer.

According to Route2FI, a whale has been scaling a long ARC position on Lighter via TWAP, placing roughly $24 million in orders and adding about $360,000 per hour; the analysis links this activity to the extreme “capital fee” and translates the annualized ~2100% into roughly 5.7% daily paid by longs to shorts.

What this means for traders right now

Elevated funding means shorts currently earn substantial cash flow independent of price moves, while longs face high carry costs. However, both sides encounter path risk: a squeeze could erase short PnL, and a funding collapse could strand longs who paid peak rates.

“As reported by AiCoin Real-time News, short sellers are earning about 5.7% per day in funding income, effectively turning the short into a fee-collection trade under these conditions.”

This configuration can be unstable. If the whale slows purchases or counterflow increases, funding may normalize quickly. Traders should be prepared for rapid shifts in basis, spreads, and liquidity as positioning adjusts.

The immediate effect is heightened volatility and sensitivity to order-flow shocks. As concentrated longs expand, the system’s risk controls become increasingly relevant because counterparty exposure grows when one side dominates.

Lighter’s Automatic Deleveraging (ADL) is designed to reduce systemic risk by auto-reducing positions when insurance mechanisms and margin buffers are stressed. It can interrupt cascade dynamics, though it does not guarantee avoidance of tail outcomes similar to past exchange-specific episodes like “JellyJelly.”

At the time of this writing, ARC is quoted near $0.00003064 with extremely high 70.38% volatility and a neutral RSI(14) of 43.7, alongside a bearish sentiment reading. These figures provide context rather than prediction.

Monitoring checklist and indicators to watch

Funding fee, basis, open interest, ADL index on Lighter

Track the ARC funding fee in real time; persistence near triple-digit annualized levels signals imbalance. Watch the futures basis versus spot; a narrowing basis often precedes funding normalization. Rising open interest with rising funding can indicate crowded longs; falling OI with high funding can signal capitulation. Monitor the ADL index or risk flags for signs that systemic protections may engage.

Whale TWAP flows, short-share shifts, platform activity changes

Observe whether large buys continue on a schedule-like cadence consistent with TWAP; a slowdown often precedes relief in funding. Track the short-share of OI; if shorts absorb flow faster than longs expand, fees can compress. Platform-wide activity changes, including liquidity depth and spread behavior, help assess how durable the current incentives are.

FAQ about ARC funding fee rate 2100%

Is a whale manipulating Lighter’s ARC market, and how is the TWAP long position being built?

A large, methodical TWAP-built long has been observed. Motive cannot be verified; the pattern appears designed to pull in shorts by sustaining elevated funding.

How does Lighter’s Automatic Deleveraging (ADL) work and can it prevent a Hyperliquid JellyJelly–style event?

ADL auto-reduces positions when imbalances strain risk buffers. It can mitigate cascades, but outcomes depend on liquidity and timing; full prevention is not guaranteed.