Scamcoin Air Force Front's LIT Short Position Surpasses $10 Million, Becomes Largest on-chain Short for LIT

A major short position against the LIT token has grown to over $10 million, making it the largest on-chain short for the asset. The position is held by the "Meme Army Tank" whale on the Hyperliquid exchange. The whale has been systematically adding to the short, which is currently 38,131,960 LIT tokens according to onchain data.

The average entry price for the position is around $2.70, with a liquidation price of approximately $5. This indicates a high conviction bet that the token will struggle to maintain its price above that level. In addition, the same address holds short positions in multiple other tokens, including HYPE, ASTER, UNI, and ETH, many of which are profitable.

The LIT token, native to the Lighter decentralized exchange, has been a focus of both institutional and retail attention since its launch in late 2025. The token launched with a fully diluted valuation (FDV) of about $2.8 billion and a market cap of $700 million according to Cointelegraph.

Why Did This Short Position Grow to $10 Million?

Onchain analytics have shown that multiple large whales have been opening leveraged short positions on LIT, particularly after key announcements. This includes the activation of the LIT token airdrop in late 2025, which saw $675 million in value distributed to early users and liquidity providers according to Cointelegraph.

At the same time, one dormant whale address increased a long position in LIT despite floating in losses, suggesting a belief in the token's long-term potential. This contrast between bearish and bullish onchain activity highlights the polarized market sentiment.

The short position in question is unique because it is the largest on-chain short for the token. The whale is also earning funding rate revenue from its short positions on multiple tokens, which helps offset potential losses.

How Did Markets React to LIT's Launch and Trading Activity?

The LIT token's launch was accompanied by significant speculation on prediction platforms like Polymarket. Traders wagered over $74 million on whether LIT's FDV would exceed $1 billion, $2 billion, and $3 billion. The market priced a near-certainty for the $1 billion threshold, but confidence dropped for the higher valuation targets according to Cointelegraph.

Justin Sun, founder of Tron, also took a major stake in LIT, purchasing 13.25 million tokens for $33 million. This acquisition represents more than 5% of the circulating supply, reinforcing the belief in the token's long-term utility and governance role.

Meanwhile, concerns over airdrop distribution and liquidity have persisted. A single entity was found to have received 1% of the total supply of LIT through the airdrop, raising questions about the fairness of the distribution process.

What Are Analysts Watching for LIT's Future Performance?

Analysts are closely monitoring the balance between short-term volatility and long-term potential for LIT. The token's price has been observed to fluctuate within a $2.30–$2.80 range, with a current price of $2.70. Some traders have expressed caution about the 30% price swings observed in the first hours of trading.

At the same time, there is optimism about the token's utility. LIT holders earn a share of protocol fees, and the token is central to the governance and security of the Lighter platform according to CoinEdition. The platform itself has been expanding its offerings, with BingX recently listing LIT and offering rewards to users according to CryptoBriefing.

The token's onchain activity also suggests a growing level of interest. Whale movements, including those of Justin Sun, and the emergence of large short positions all indicate that LIT is becoming a significant asset in the DeFi ecosystem according to Cryptotimes.

As the LIT token continues to trade and gain adoption, market observers will likely focus on its ability to maintain a strong FDV while managing liquidity and volatility. With ongoing speculation and a mix of bullish and bearish onchain activity, the coming weeks could reveal more about its trajectory.