Lighter, a decentralized crypto exchange, successfully navigated a $50 million ARC perpetual long squeeze on February 26, testing its upgraded liquidity pool system. Approximately 600 traders reversed a whale's position, resulting in an $8.2 million loss for the whale, while Lighter's LLP Strategies limited liquidity provider losses to $75,000. The event marked the first major test for Lighter's new LLP infrastructure, which segments liquidity into distinct strategies for different market types. The ARC perpetuals were assigned to a high-risk strategy, which managed the risk effectively despite the market turbulence. Following the squeeze, ARC's price experienced a flash crash, dropping from $0.031 to $0.025 before recovering slightly. The token remains significantly down, reflecting broader market concerns about potential manipulation.