Lighter Interpretation: How zk Technology Is Reshaping Perpetual Contract Trading

As the decentralized finance (DeFi) market continues to develop, on-chain derivatives trading—being a core sector for high-frequency trading and liquidity aggregation—has attracted increasing attention from capital and developers. Against this backdrop, the Ethereum-based perpetual contract decentralized trading protocol Lighter (hereinafter referred to as “Lighter”) has become one of the most discussed topics by the end of 2025. The project has sparked widespread discussion and anticipation in the market due to its innovative technical architecture, strong capital backing, and community expectations for the native token LIT.

1. Project Overview: A New Architecture for On-Chain Perpetual Contracts

Lighter is a perpetual contract decentralized exchange (Perpetual DEX) built on Ethereum Layer-2 (L2), utilizing zero-knowledge proof (zk-Rollup) technology. Unlike traditional AMM models, Lighter employs a verifiable centralized limit order book (CLOB) mechanism, executing order matching, settlement, and clearing logic through zk-SNARK cryptographic proofs. This approach maintains decentralization, transparency, and security while delivering high-performance trading experiences comparable to centralized exchanges.

Its core philosophy is to address the performance, security, and verifiability challenges faced by on-chain derivatives trading. By leveraging zk-Rollup and optimized data structures, the matching engine can operate off-chain, with state and proof compression submitted to the Ethereum mainnet, enabling auditable and verifiable on-chain transaction records.

Since its public mainnet launch in October 2025, Lighter has gradually opened trading pairs for major perpetual contracts such as BTC and ETH, and has attracted users with a broader product coverage, including subsequent additions like FX (foreign exchange), stock contracts, and spot trading functionalities.

2. Technical Highlights: Verifiable High-Performance Matching and Zero-Fee Strategy

Lighter’s technical architecture integrates several key elements:

Verifiable zk-Rollup Execution: Order matching, clearing, and state transitions are validated through custom zk-SNARK cryptographic proofs and submitted to the Ethereum mainnet, enhancing transparency and reducing trust assumptions.

High-Performance Order Book: Supports processing tens of thousands of orders per second with millisecond latency, significantly improving trading efficiency and market liquidity.

Non-Custodial and Reconfigurable Exit: User funds are controlled by Ethereum smart contracts. The system provides mechanisms such as public verification and “Escape Hatch” for emergency exits, ensuring users can withdraw funds in case of network interruptions or sequencer failures.

Zero-Fee Strategy: To enhance user experience and market competitiveness, Lighter offers zero maker and taker fees for regular retail traders, while certain professional or institutional API users are charged a fee.

These technological features enable Lighter not only to deliver high-performance trading but also to ensure fairness and transparency through on-chain verifiable methods, positioning it as a potential foundational infrastructure for decentralized derivatives markets.

3. Team and Capital Backing: Strong Support for Project Development

Lighter’s development team comprises members with extensive engineering and financial backgrounds, bringing together professionals from blockchain, traditional finance, and cryptography fields. Public information indicates that the founders and core team have held technical or managerial roles in multiple high-performance trading and system design projects, with rich experience in developing high-concurrency, low-latency systems.

Meanwhile, Lighter has also attracted top industry institutions’ investment. In November 2025, Lighter completed a $68 million Series A funding round (including pre-seed funding), led by Founders Fund and Ribbit Capital, with participation from Haun Ventures, Robinhood, and others. The project’s valuation is approximately $1.5 billion. This funding scale and valuation are among the leading in the DeFi space that year.

The capital support not only enhances Lighter’s resources for technological R&D and market expansion but also boosts the credibility of the entire ecosystem, helping to attract more users, liquidity providers, and partners.

4. LIT Token Economics: Structure and Future Uses

Lighter’s native token LIT is a vital component of the entire protocol ecosystem. Its tokenomics are designed to support governance, incentives, and ecosystem growth. According to public analyses, the total supply of LIT is 1 billion tokens, with the following anticipated distribution structure (this data is compiled from various market reports; specific issuance details may be adjusted based on official announcements):

Ecosystem Incentives (about 41.4%): Used for market incentives, trading mining, liquidity rewards, and other ecosystem development activities.

Team and Advisors (about 29.1%): Incentives for the team and core advisors, typically with long-term linear unlocking mechanisms to ensure sustained commitment.

Investors (about 16%): Held by early and strategic investors, with unlocking schedules similar to the team.

Public Sale and Community Distribution (about 6%): Allocated for public investors or community participants.

Airdrops and User Rewards (about 4.8%): Used for early users, testers, and other incentive distributions.

Foundation Reserves (about 2.7%): For strategic development and ecosystem partnership support.

The main uses of LIT include but are not limited to: ✅ Governance functions: Users can stake LIT to participate in protocol parameter adjustments and upgrade votes; ✅ Fee discounts: Staking LIT grants trading fee discounts and other benefits; ✅ Liquidity incentives: Participating in liquidity pools (LLP) can earn LIT rewards; ✅ Insurance mechanisms: Used to replenish insurance funds in extreme events.

Currently, LIT has not yet been fully circulated, but there is high market anticipation for airdrops and TGE discussions. The specific issuance time and details are subject to official announcements.