Is $LIT Cheap? | Will Price and Flip

**David** (0:00)
Is lit just a copycat beta trade to hype, or is it actually something like differentiated in strategy and revenue and economics?
As Hyperliquid breaks a $60 billion market cap and is positioned to earn a top 10 spot in the crypto industry, investors are starting to realize how big the perps market actually could be. When you see TradFi, FinTwit commentators tweeting about Hyperliquid and the Hyperliquid ETFs and DATs are pulling in tens to hundreds of millions of dollars of flows, it makes the entire perp sector more interesting and more exciting. But perhaps the number one reason to be excited about perps is that the world's largest capital market still hasn't given them regulatory approval. There's no one with a perps license inside the United States because that license doesn't exist yet. So while you may feel like you're late to the growth of offshore perps, the onshore perp game hasn't even started yet. And this isn't just Coinbase, Kraken or Robinhood competing amongst themselves for US perp market share. Perps are on their way to eat all of finance. So you are welcome to dream bigger dreams. The real prize are the big brokerages like IBKR or Charles Swab. And winning those as clients can result in tens of billions of dollars of flows in revenue going to whichever perp platform gets regulatory approval and can execute quickly. The two guests on the show today think that lighter, the ZKL2 on Ethereum is in prime position to win an outsized share of the United States market, given the eventual regulatory clear the United States is going to provide to the perps sector. But even outside of the domestic market, the lit token, the token of lighter is already buying back twice the rate of the token compared to hyperliquid and at just a $1 billion valuation compared to hyperliquid 60 All I want to ask you the question, is lit cheap? I'm here with Flip. He does research at Delphi Digital. Flip, welcome to Bankless.

**Trevor Flipper** (1:46)
Thank you. Thanks for having me.

**David** (1:47)
And I'm also joined by Will Price, a DeFi investor and also an advisor to lighter. And I think his first podcast in about four years. Will, welcome to Bankless. Also both of you guys' first time.

**Will Price** (1:57)
Hi David. I know I tried to record a podcast with you like five years ago, and we lost the audio very sadly.

**David** (2:03)
That's right.

**Will Price** (2:04)
This is my first appearance on Bankless. Right.

**David** (2:07)
Oh my God. It was about yams, right?

**Will Price** (2:09)
Oh my gosh, it was.

**David** (2:10)
It was about yams. Yeah.
We'll let the listener go investigate what yams was if they don't know. They don't know, you don't know.

**Will Price** (2:17)
Perfect.

**David** (2:18)
Okay, guys, I have some questions about LIDAR.
There has been a ton of attention on Hyperliquid. The hyperbusiness model is well established as working extremely well.
Hyperliquid is just getting known into TradFi circles, Wall Street circles, getting a lot of clout and brand.
And there is a lesser known ZK Layer 2 on Ethereum that is also doing well in terms of perps that I want to know just a little bit more of. And maybe to kind of start off this question, this is a question that I hear asked on crypto Twitter and around. Is the token of LIDAR is lit? Is lit just a copycat beta trade to hype? Or is it actually something like differentiated in strategy and revenue and economics? Maybe Flip, I'll kind of just throw that one to you to answer to start.

**Trevor Flipper** (3:09)
Yeah, and I think the short answer there, that's a good question. The short answer is yes, it's different. And I think the first and most obvious is zero fees.
And why does that matter? It really affects their distribution strategy and the way in which they onboard new users and sell to existing platforms. And to expand on that a little bit is if, like recently, they integrated with Ensilico. And Ensilico is also integrated with Hyperliquid. Well, Hyperliquid has a base builder code fee of 4.5.
And Ensilico, most OEM assets, order and execution management systems, charge one bit to their users for those type of orders. And so the total cost for the user is 5.5 bips. First, if you use Lightr, which has zero fees for their partner attribution program, which is just builder codes. I know the team would hate me saying that, but it's essentially a builder code. There's zero fees. So Ensilico can still charge one bit, but the trader, you say 4.5, which matters a lot for people who trade volume. And so the way in which they go about their distribution strategy is very different than a Hyperliquid. And this also goes into the team's density, the engineering team. They have quite a large engineering team. One of the sharpest teams I've met in crypto and the talent is very much show on par with a lot of the startups you see in AI now. And their talent density on the engineering side allows them to have a white glove treatment to integrating different partners like integrating Telegram. Eventually, hopefully they integrate with brokers, the IBKRs of the world, is they have a talent density to go integrate this tech stack for IBKR, where the competitors don't quite have the same resources to go do that. And nor do they take that approach. It's usually, here's our SDK, if you want to integrate it, please go for it.