Vladimir Novakovski, a former Citadel engineer, founded Elliot Technologies, Inc., the US C-Corp trading as Lighter. This company operates a decentralized perpetual futures exchange built on custom zero-knowledge infrastructure anchored to Ethereum. While the prompt mentions "Physical Intelligence," the provided sources exclusively detail Lighter’s architecture and its integration with Robinhood Wallet. Lighter processes tens of thousands of orders per second with millisecond latency, ensuring retail traders pay zero fees. The system uses Plonky2 circuits to verify every match and liquidation, submitting validity proofs to Ethereum mainnet. This design combines centralized-exchange speed with self-custody, keeping user collateral in smart contracts rather than company-controlled wallets. If the operator goes offline or censors withdrawals, users can force an exit through Layer 1 mechanisms.
Technical Architecture and Verification
The exchange splits responsibilities between an off-chain operator and Ethereum smart contracts. A sequencer orders incoming transactions first-in, first-out and builds blocks, providing fast soft confirmations so makers and takers do not wait for Ethereum finality. API servers provide a low-latency gateway for submitting orders and reading market data directly from the rollup. Witness generators transform executed transaction batches into structured inputs required by the proving system. The prover generates execution proofs in parallel, demonstrating that each block followed protocol rules covering price-time priority and margin requirements. An aggregation engine combines many block proofs into a single batch proof across multiple layers, reducing the cost of verifying thousands of trades on Ethereum mainnet.
Lighter’s technical documentation describes six components that keep the system operating, including the sequencer, API servers, witness generators, prover, aggregation engine, and smart contracts. The Order Book Tree indexes leaves by price and nonce, embedding priority directly into the data structure. A separate State Tree commits to every market and account, allowing anyone to confirm that the Ethereum state root reflects valid execution. Proving speed remains the trade-off, though performance has improved significantly. An open challenge held with Eigen Labs in August 2026 produced a prover submission capable of roughly 50,000 transactions per second, more than five times the baseline. Faster proving reduces the delay between trade execution and Ethereum settlement, which is critical for high-frequency trading strategies.
| Component | Function |
|---|---|
| Sequencer | Orders transactions FIFO, builds blocks, provides soft confirmations |
| API Servers | Low-latency gateway for order submission and data reading |
| Witness Generators | Converts raw exchange activity into circuit-evaluable data |
| Prover | Generates parallel execution proofs for protocol rule compliance |
| Aggregation Engine | Combines block proofs into single batch proofs for cost efficiency |
| Smart Contracts | Hold collateral, verify proofs, handle deposits and withdrawals |
Economic Model and Risk Isolation
Lighter launched its public mainnet on October 2, 2025, and monthly volume climbed to nearly $232 billion that December as points farmers pursued the LIT airdrop. DeFiLlama currently shows $748 million in TVL and around $59 billion in 30-day perp volume, placing Lighter third among perp DEXs by volume. The company raised close to $90 million, including a $68 million round in November 2025 led by Founders Fund and Ribbit Capital at a reported $1.5 billion valuation. LIT tokens launched on December 30, 2025, with a maximum supply of one billion tokens and no inflation schedule beyond the original mint. CoinGecko prices LIT near $3.57, implying a market capitalisation of about $890 million.
The Lighter Liquidity Pool serves as the protocol’s market-making and insurance vault, quoting both sides of the order book and absorbing liquidation losses. Since January 2026, deposits have been limited to LIT stakers. The October 10, 2025 crash left Lighter offline for roughly 4.5 hours, prompting the team to split LLP into segregated strategies. Each market now belongs to a distinct bucket, such as crypto perps, FX, or equities. Once a bucket exhausts its allocated capital, auto-deleveraging takes over. That structure was tested in February 2026 when a trader lost an estimated $8.2 million in the ARC perp, yet LLP’s loss was limited to the $75,000 allocated to that strategy. However, Lighter is still classified as a Stage 0 rollup because its Security Council can bypass the 21-day upgrade delay. Every upgrade so far has been fast-tracked without providing an exit window, raising questions about long-term decentralization. Does this centralized control undermine the permissionless exit process that L2BEAT researchers confirmed works end-to-end?
