FAQ

Lighter is a perpetual trading protocol that introduces a scalable, secure, transparent, non-custodial, and verifiable order book trading infrastructure within the Ethereum ecosystem. As an application-specific zk-rollup, it employs advanced cryptographic techniques and data structures. Lighter significantly improves the security and fairness of order book trading with its verifiable matching engine, ensuring scalable and efficient market price discovery. Thus, Lighter lays the groundwork for creating new, high-performance, and secure digital trading platforms.

Lighter features a verifiable matching engine that guarantees fairness and security in order book matching. This engine cryptographically ensures that when a user places an order, it is matched following a strict price-time priority, offering the best available trades. Additionally, the engine operates transparently and non-custodially, allowing users to monitor rollup operations and retain full control over their assets at all times. Lighter also incorporates an 'exit hatch' mechanism, enabling participants to directly withdraw their assets back to the base layer through Lighter smart contracts.

The current version of Lighter is capable of processing thousands of order operations per second, maintaining only a few milliseconds of latency for traders, enabling high-frequency trading. The high optimization level of Lighter's infrastructure allows for the elimination of transaction fees for rollup transactions, enhancing user experience. Our ongoing efforts focus on enhancing Lighter's scalability even further, exploring avenues like hardware acceleration to support greater throughput.

Lighter, as an application-specific zk-rollup, serves as a specialized scaling solution that shifts the order book matching computation off Ethereum to its dedicated rollup chain. Leveraging cryptographic techniques like ZK-SNARKs and unique data structures tailored for Lighter, it creates proofs of order book matching executions that are verified and recorded on the Ethereum blockchain. This approach ensures the efficient and scalable handling of order book matching while upholding Ethereum's security and decentralization principles. Lighter users engage with the rollup by depositing assets into Lighter smart contracts, maintaining complete control over their assets.

The Lighter protocol does not impose any transaction fees on users. This means users can manage their orders without incurring any transaction costs.

Lighter employs a trustless data feed with a pre-commitment scheme, publishing transactions within milliseconds to ensure instant finality. Operating at the sequencer level, this system prevents any post-publication re-ordering of transactions. Should discrepancies between the data feed and committed blocks be detected, they can be reported to Lighter smart contracts, triggering severe penalties for the sequencer and safeguarding the integrity of transactions.

While Lighter currently supports perpetual trading of digital assets, its architecture is built to accommodate a variety of financial instruments, including derivatives, lending, and options. We are actively developing the support for new instruments and we will be announcing them in the coming weeks.

At its heart, Lighter is an innovative order book matching engine designed to support a broad spectrum of financial instruments, including spot, futures, options, perpetual trading, and potentially lending markets. Our mission is to redefine financial infrastructure by enhancing transparency and security, starting with the development of platforms for spot and derivatives trading of digital assets. This positions Lighter as a leader in the evolution of financial transactions, providing a dynamic and secure framework that can adapt to a variety of financial services. The Lighter team is dedicated to drastically reducing any potential Maximal Extractable Value (MEV) within the protocol. We're actively exploring fair sequencing techniques and various encryption methods to further mitigate MEV risks. A significant focus for us is on achieving the complete decentralization of the protocol, ensuring low latency while eliminating opportunities for MEV that could negatively impact users in a decentralized setting. Our ultimate goal is to create a platform that is secure, equitable, and focused on the needs and safety of its users.