Author: Hotcoin Research
I. Project Overview
Lighter is an Ethereum-based zero-knowledge rollup (zk-rollup) perpetual contract exchange. It utilizes a custom ZK circuit to achieve verifiable order book matching and settlement, balancing centralized exchange-level performance (millisecond latency, tens of thousands of TPS) with on-chain transparency. The protocol adopts a "zero-fee retail trading + institutional API fee" model, and uses the LIT token for governance, fee discounts, and liquidity incentives. In November 2025, Lighter completed a $68 million Series A funding round, co-led by Founders Fund and Ribbit Capital, valuing the company at approximately $1.5 billion.
II. Market Opportunities
The penetration rate of on-chain derivatives is less than 10%, but the daily trading volume has exceeded $33.8 billion, indicating huge growth potential.
The existing solution faces the "Blockchain Trilemma":
The cost and latency of general L2 (Arbitrum, OP) cannot meet the needs of high-frequency order placement;
Cosmos sidechains (dYdX v4, Hyperliquid) sacrifice Ethereum's security and composability;
Hybrid order books (0x, StarkEx) rely on centralized matching, which poses risks of censorship and MEV (Mean Equity Entities). Lighter fills this market gap by achieving a unified "performance-security-verifiability" solution on Ethereum through application-based zk-Rollups.
III. Product and Technology Architecture
3.1 Core Components
Sequencer: Responsible for sorting and packaging transactions and publishing pre-commitments, ensuring millisecond-level feedback;
Prover: Generates zk-SNARK proofs for matching, clearing, and state transitions, and verifies them on-chain;
Smart contracts: manage funds, verify proofs, and trigger emergency exits (Exit Hatch), completely non-custodial.
3.2 Innovation Points
Order Book Tree: A patented binary prefix tree that encodes the "price-time" priority into the leaf index, achieving a proof complexity of Θ(log₂N), and supporting batch matching and fast quoting;
Verifiable liquidation engine: a three-tier margin system (initial/maintenance/liquidation) + insurance fund, the liquidation process is completely enforced by the circuit, eliminating human intervention;
Exit Hatch: If the Sequencer reviews or rearranges transactions, users can directly submit a Merkel proof to the contract to trigger an emergency exit, with fund security relying solely on Ethereum.
3.3 Performance Indicators
Matching delay < 5 ms; a single block can package 20,000 orders/cancellations.
After on-chain data compression, the transaction size is less than 200 bytes per transaction, and the transaction fee approaches zero.
Supports 50+ perpetual markets, with leverage up to 50x, and uses an index-moving premium + funding rate mechanism to anchor to the spot market.
IV. Token Economy (LIT)
4.1 Total Amount and Allocation (Official Disclosure)
Ecosystem incentives: 41.4%, used for transaction mining, LP rewards, and liquidity budget;
Team & Advisors: 29.1%, 4-year linear unlocking, 12-month lock-up after TGE;
Investors: 16.0%, Series A and Seed rounds, same team unlocking the pace;
Public offering & community sale: 6.0%, expected to be available in Binance Launchpool and on the official website in Q1 2026;
Airdrop: 4.8%, incentivizing early adopters, testnet nodes, and Ciphernaut mission participants;
Foundation reserves: 2.7%, legal, auditing and strategic partnerships.
4.2 Token Usage
Transaction fee discount: Up to 50% discount available for staking LIT;
Governance: Modify risk parameters and launch new markets through Snapshot + on-chain execution modules;
Liquidity mining: Earn LIT rewards by contributing LLP (Lighter Liquidity Pool) shares;
Insurance fund supplement: In extreme cases, auction LIT to cover margin calls losses.
4.3 Circulation Rhythm
Initial circulation: 6% public offering + 4.8% airdrop ≈ 10.8% (approximately 108 million tokens);
No team/investor unlocking occurs in the first 12 months; starting in January 2027, 1/36 will be unlocked linearly each month.
It is projected that 25% of the supply will be in circulation by the end of 2026, 70% by the end of 2028, and all will be unlocked by 2030.
V. Competitive Landscape
Currently, the on-chain perpetual contract market is characterized by a three-way competition:
Aster uses the Cosmos application chain, has issued its own token, and has pushed its daily trading volume to $4.8 billion through high incentives, currently ranking first. However, it only has 21 validators, indicating a high degree of centralization.
Hyperliquid is also based on Cosmos, with its matching engine running on a single node. It has a daily trading volume of approximately $3.1 billion and enjoys high community popularity, but its assets need to be cross-chain, which poses a bridging risk.
Lighter is still in the uncirculated token stage, with a daily trading volume of $2.3 billion. It is rapidly catching up with Ethereum by virtue of zero transaction fees and the security boundaries of Ethereum. After TGE, it is expected to narrow the gap by leveraging liquidity mining.
VI. Team and Financing
Vladimir Novakovski (CEO): Former CEO of an AI quantitative fund, who once managed $400 million in assets; CTO Murat Ekici is the former high-frequency system architect at Jump Trading.
2024-11 Seed round of $12 million, led by Paradigm;
In November 2025, the company raised $68 million in its Series A funding round, led by Founders Fund and Ribbit Capital, with participation from Robinhood and Haun Ventures; bringing its total funding to $80 million and its valuation to $1.5 billion.
VII. Route Map
2026 Q1: Mainnet launch + LIT TGE (Binance Launchpool), launch of transaction mining;
2026 Q2: Launch mobile app, add 100+ perpetual marketplaces, and initiate DAO governance;
2026 Q4: Decentralized Sequencer (based on Timelock encryption + threshold signature);
2027: Supports spot, options, and lending markets, and cross-chain connectivity to Bitcoin and Solana.
VIII. Risks
Technically, ZK circuits are extremely complex, and potential vulnerabilities could lead to incorrect matching or settlement failures.
Regulation: The US CFTC is tightening its regulations on on-chain derivatives, which may affect user access;
Competition: Aster/Hyperliquid have already launched their tokens and secured liquidity, Lighter needs to quickly provide subsidies;
Token: Initial circulating supply is small, price fluctuates greatly; selling pressure needs to be monitored after unlocking.
IX. Conclusion
Lighter has achieved a "verifiable order book + millisecond-level matching" for the first time on Ethereum through an application-based zk-Rollup, balancing security, performance, and compliance transparency. Coupled with zero transaction fees, top-tier VC backing, and the catalyst of unreleased tokens, it has the potential to become the next leader in on-chain derivatives.
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