Interesting hangover from Friday night's liquidation, and one that goes to the discussion about the difference between HLP and LLP... The Lighter vault appears to be trapped in a YZY short since Friday night. LLP makes up nearly 100% of the OI in the market. Even if it tried to force exit through the book at any price, there's not enough liquidity to exit even half the position. The stuck position is bleeding about 2.5%/day in funding. Just to be clear, this is a pretty de minims position relative to the total size of LLP. ($500k notional, versus $300m+ of deposits). Even in the worse case scenario, it's not going to meaningfully hurt LLP in terms of performance or risk. But it does go to show the risks with LLP style "market maker of last resort" behavior. One big reason for less ADL at Lighter than HL, was because LLP was still acting as a large scale market maker when others stepped away. (By contrast HLP makes up a negligible proportion of market maker activity these days.) The upside is it keeps markets liquid even when third party market makers turn off. The downside is when you're the only counterparty in the market, it's very easy for your position to quickly swell to nearly all of the OI in the market. That's a situation that can get any trader in trouble, because the market knows they're a forced seller, and can wage a speculative attack on their trapped liquidity. Luckily with YZY, it's just a fun little market without a big blast radius. We'll get to watch the experiment play out without a ton of dollars at stake. But it is something to step back and think about what would happen if a trapped OI situation happened in a larger market.