Lighter is a decentralized exchange (DEX) for perpetual futures and spot trading built as a custom application-specific Layer 2 zero-knowledge (ZK) rollup on Ethereum. The platform is designed to provide a high-performance trading experience with low latency and high throughput, comparable to centralized exchanges (CEXs), while maintaining the security and self-custodial principles of decentralized finance (DeFi). ^{[1] [2]} Lighter gained significant market attention in late 2025 after a successful invite-only launch phase, culminating in a 1.5 billion. ^[3]​

Overview

Lighter aims to bridge the performance gap between centralized and decentralized trading venues. Its core architecture utilizes a hybrid model, combining an off-chain order book and matching engine for speed with on-chain settlement and verification on the Ethereum mainnet for security and transparency. ^[4] All exchange operations, including order matching and liquidations, are cryptographically proven using ZK-SNARKs, ensuring that the platform's operator cannot manipulate or censor transactions. This design is intended to prevent common issues in DeFi such as front-running and Maximal Extractable Value (MEV). ^[5]​

The platform’s go-to-market strategy involved an eight-month private beta phase, which was invite-only. This approach allowed the project to bootstrap liquidity by onboarding professional traders and market makers, ensuring platform stability and deep order books before opening to the public. ^{[6] [7]} Following its public launch, Lighter implemented a zero-fee model for retail traders to attract a wider user base. ^[3] The protocol's native governance and utility token is the Lighter Infrastructure Token (LIT). ^[8]​

History

Lighter was founded in 2022 by former AI entrepreneur Vladimir Novakovski and is developed by Elliot Technologies, Inc. ^{[6] [5]}​

The project launched its private beta in January 2025, which ran for eight months before the public mainnet went live on October 1, 2025. ^{[8] [6]} Just nine days after its public debut, on October 10, 2025, the platform experienced a significant outage during a period of high market volatility. The team attributed the failure to its database capacity being insufficient to handle the traffic surge. The outage resulted in an estimated $50 million in losses for traders who were unable to manage their positions. Lighter announced it would compensate affected users with "Lighter points," a pre-token asset intended to be exchangeable in a future airdrop. ^[6]​

Despite the early setback, the platform's trading volume grew substantially. On November 11, 2025, Lighter announced it had raised 1.5 billion valuation. ^{[3] [9]} The following day, data from DefiLlama showed that Lighter had become the largest decentralized perpetuals exchange by both daily and weekly trading volume. ^[6]​

Lighter continued to expand its product offerings, introducing spot trading for Ethereum on December 4, 2025, and previously adding Foreign Exchange (FX) perpetuals in October 2025. ^{[10] [8]} In late December 2025, the project conducted the Token Generation Event (TGE) for its native LIT token and airdropped 25% of the total supply to early users. ^[2] Following the TGE, in early January 2026, the Lighter team commenced a token buyback program funded by protocol fees. ^[11]​

Key Figures

​Vladimir Novakovski is the founder of Lighter. ^[3] He founded the project in 2022 and has publicly discussed its plans, including the expansion into spot markets. The protocol is developed and maintained by Elliot Technologies, Inc. ^[5]​

Joey Krug, a partner at Founders Fund, commented on the firm's investment decision, stating to Fortune:

"Vlad and the team that he’s built is like 85% to 90% of why we made the investment." ^[3]

Technology and Architecture

Lighter is built on a custom technology stack named "Lighter Core," which functions as an application-specific ZK-rollup designed for high-frequency trading. This architecture differs from dApps built on general-purpose Layer 2 networks. ^[2]​

Lighter Core and ZK-Rollup

The platform's hybrid architecture consists of three main components: ^[5]​

• Sequencer: An off-chain execution engine that receives user orders, arranges them in a first-come, first-served queue, and matches them. It provides low-latency "soft finality" to traders.
• Prover: The cryptographic core of the system. It takes batches of transactions from the Sequencer and generates a ZK-SNARK proof that attests to the validity of the entire exchange logic, including order matching and liquidations. This ensures the Sequencer cannot censor transactions or execute trades unfairly.
• Smart Contracts: A set of smart contracts on the Ethereum mainnet that serve as the trust anchor. These contracts hold user funds, store the protocol's state root, verify the ZK proofs submitted by the Prover, and facilitate censorship-resistant withdrawals.

Order Book Tree

A core technological innovation of Lighter is its "Order Book Tree," a novel data structure that is crucial for achieving high performance within a ZK circuit. It combines properties of a Merkle Tree and a Prefix Tree to store active orders. An order's priority (based on price and time) is encoded into its leaf index, allowing the Prover to verify matching logic with logarithmic complexity (O(log N)). This design makes it computationally feasible to prove the correct execution of a Central Limit Order Book (CLOB) on-chain, regardless of the book's depth. ^{[5] [2]}​

Security and Self-Custody

Lighter's design incorporates several features to ensure user funds are secure and the platform remains trustless.

• Verifiable Matching: ZK proofs cryptographically enforce the price-time priority rule for all trades. Any attempt by the Sequencer to reorder or unfairly match trades would produce an invalid proof that would be rejected by the Ethereum smart contracts. ^[1]
• Escape Hatch: This is a critical security mechanism that guarantees user sovereignty. If the Sequencer goes offline or censors a user's withdrawal request, the user can submit a "priority transaction" directly to the Lighter smart contract on Ethereum. If the Sequencer fails to process this request within a set time frame, the protocol freezes. Users can then use data previously published to Ethereum to generate a proof of their account balance and withdraw their funds directly from the Layer 1 contract, bypassing the Sequencer entirely. ^[5]

Data Availability

The protocol uses a hybrid data availability model. To enable the Escape Hatch, minimal data required for state reconstruction (such as account balances and positions) is posted to the Ethereum mainnet as data blobs using EIP-4844. This ensures that even if the Lighter Sequencer disappears, users have the necessary on-chain data to reclaim their assets. ^[5]​

Products and Features

Lighter offers a suite of products and features aimed at both retail and professional traders. ^[12]

• Perpetual Futures: The platform's flagship product, offering leveraged trading on various digital assets. Contracts are settled in Ethereum (ETH). ^[13]
• Spot Trading: Introduced in December 2025, allowing users to trade underlying assets directly. The first market offered was for Ethereum. ^[10]
• Pre-Launch Markets: A feature that allows users to trade perpetual contracts on tokens that have not yet officially launched, providing early price discovery. An example was the market for the $MON token. ^[8]
• Foreign Exchange (FX) Perpetuals: Lighter expanded its derivatives offerings to include markets for major FX pairs, such as EUR/USD and GBP/USD, with up to 25x leverage. ^[8]
• Points Program: An incentive system designed to reward genuine user activity, such as trading and providing liquidity. The program is organized into "seasons," and points were used to compensate users after the October 2025 outage and for the LIT token airdrop. ^[4]

LIT Tokenomics

Lighter has a native token, the Lighter Infrastructure Token (LIT), which is integral to its ecosystem.

Token Details and Allocation

• Token Ticker: LIT

• Total Supply: 1,000,000,000 LIT ^[11]

• Token Allocation: ^[2]

  • Team: 26% (260 million)
  • Investors: 24% (240 million)
  • Airdrop: 25% (250 million)
  • Ecosystem: 25% (250 million)

Utility and Value Accrual

The LIT token is designed for governance and value accrual. Following its token generation event, 25% of the total supply was airdropped directly to the wallets of early users who participated in the platform's points program. ^[2] A portion of the protocol's trading fee revenue is used to buy back LIT tokens from the open market, a mechanism designed to create buying pressure and distribute value to the ecosystem. ^{[14] [11]} The protocol has also introduced a vote-escrowed token model (veLIT) to allow long-term token holders to participate in governance and earn a share of protocol revenue. ^[15]​

Funding

On November 11, 2025, Lighter announced it had closed a $68 million funding round at a post-money valuation of $1.5 billion. ^{[3] [16]}

The round was co-led by Founders Fund and Ribbit Capital. Other notable investors included Haun Ventures, a16z, Dragonfly, Coatue, and strategic investments from Robinhood and Coinbase. ^[1]

Market Performance and Reception

Lighter's initial invite-only strategy proved effective in creating a stable, high-liquidity environment before opening to the public. This curated launch helped it manage growth and establish a reputation for performance among professional traders. ^{[17] [7]}​

Following its public launch, the platform saw a rapid increase in user adoption and trading metrics. Total Value Locked (TVL) surpassed 1 billion three days after the public mainnet launch in October 2025. ^[8] By November 2025, its daily trading volume exceeded 284 billion placed it second in the market, behind Aster. ^[6] As of January 2026, its TVL was approximately $1.2 billion. ^[18]​

October 2025 Outage

A significant event in Lighter's early history was a platform-wide outage on October 10, 2025, amid a sharp market crash. The system failure was caused by an inability to handle the sudden surge in user activity. ^[6] Traders were unable to access their positions, leading to an estimated $50 million in collective losses due to forced liquidations or the inability to close positions. The Lighter team publicly acknowledged the failure and announced a compensation plan, distributing "Lighter points" to affected wallets. These points were tied to a future token airdrop, linking user reimbursement to the protocol's long-term success. The incident highlighted the challenges of scaling decentralized infrastructure to handle CEX-level traffic during extreme market conditions. ^[6]​