Lighter Due Diligence: the highest growth L2?

Due diligence:

Beta on HYPE:
Hyperliquid is amazing right now, and I expect them to do well. Perpification of all assets is going way faster that most realized, while tokenization of rwa’s have taken much longer due to the complexity of regulations, cross chain considerations, liquidity concerns, split order books etc.

Perps have become the top choice for people to gamble on commodities like gold, silver, oil, and of course stocks and even pre IPO stocks. Volatility is a tailwind for perp dex revenue, and I expect further volatility this summer and rest of the year.

Notice I didn’t even mention crypto perps. Even when crypto has low liquidity and mindshare, perp dex’s will still do well as people trade all assets.

Lighter is currently much smaller than HYPE. About 2% of both MC and FDV.

$LIT alpha:
1) it’s free for retail users. Zero tx costs. They only charge institutions or premium users who need 0 latency. For most of us retail traders, some small milliseconds won’t matter much

2) US based: Vlad, the founder of Lighter, has strong connections to both Silicon Valley, DC heavyweights, and NYC tradfi institutions.

He has strong connections to Robinhood, and was an early advisor and HS friend to the other Vlad, ceo of RH. RH was an early investor to Lighter, and I expect some collaboration with them in the future, as Vlad mentioned in a few interviews. I expected some integration of the options market form RH may be able to flow through Lighter on chain, or lighter can help RH with the perps in Us market.

Vlad is also friends with Mike Selig of the CFTC, and also with David Sacks. Sacks was an early investor in Lighter before divesting and working for the Trump admin. I expect lighter to receive CFTC approval for us perps market and perhaps tokenization way before hyperliquid

Ken Griffin, ceo of citadel, personally hired Vlad when he was 19. Citadel looks to be the perfect partner to provide liquidity to lighter. Citadel would make money on spreads. They also would need to buy $LIT token to be included in the liquidity pool as that’s how the tokenomics are set up

3) token buybacks. Lighter is using 100% of the revenue to buy back the $LIT token, and their buybacks is about 150% higher than $HYPE as % of market cap

4) Vlad also has strong relationships with EF and Vitalik, BMNR and tom Lee, and Joe Lubin from Sbet and Metamask. Excited to see where these partnerships go. And I wouldn’t be surprised if these orgs invest in lighter as ethereum community is in their lowest sentiment. They need a killer app.