How it works

A coin moves through four phases on its own, driven by how much liquidity it has attracted. Nothing about it is manual and there is no migration event for holders to wait through.

1. Launch

You choose an underlying and a direction — the backing is always 5× — then a name, ticker and image. The protocol mints a fixed 1,000,000,000 supply and puts all of it into a fresh Uniswap V4 pool single-sided — 100% coin, 0 WETH, in a concentrated range above the starting price.

That single-sided range is the trick. Buys walk up the ladder and the price rises with every purchase, exactly like a bonding curve, but it is a real pool from the first block. There is nothing to graduate out of.

2. Pure spot

Below roughly $11,600 of accumulated pool WETH, the coin is a plain memecoin. Every dollar that comes in stays in the pool as trading depth — no hedge, no perp, no margin. harvest() reverts BelowHedgeStart under that floor, so this is enforced on-chain, not by keeper policy.

The floor is deliberate: a new coin needs a thick round-trip more than it needs exposure, and bridging tiny amounts of margin costs more in fees than it's worth.

3. Hedged

Past the floor, the keeper starts harvesting. Each sweep it pulls the WETH the pool holds above its keep target, swaps it to USDG, mints the coin's backing leveraged token, and the value bridges to Lighter as perp margin.

The pool always keeps the majority of its capital as visible depth — roughly 70% for a small coin, tapering toward a 35% floor as it grows. Only the excess is hedged, which is why your ability to sell never waits on the perp.

4. Feedback

The hedge doesn't just sit there. When the underlying moves the coin's way, the protocol redeems part of the position, market-buys the coin on its own pool and burns a share of what it bought — see Buyback & burn. When sells thin the pool, it recalls margin from Lighter and puts it back as WETH depth beneath the price — see The hedge.

The pool and the perp are two chambers of the same lung. Capital moving between them is what we call breathing.

A worked example

A coin launches long 5× NVDA.

Day 0. Launch. Buys walk the ladder up. Pool at $4,000 — pure spot, no hedge.
Day 1. The pool crosses $11.6k. The keeper harvests the excess: roughly $8k stays as depth, roughly $3.6k becomes 5× NVDA long margin.
Day 2. NVDA gains 4%. The perp is up about 20%. The coin's backing grew roughly $720 without a single trade.
Day 2. The gain clears the buyback floor: the protocol buys the coin on its own pool and burns part of it. Price up, supply down.
Day 3. Holders take profit and the pool thins. The keeper recalls margin from Lighter and depth is refilled.

Run it the other way and NVDA drops 4%, the perp loses about 20%, the backing shrinks, and no buyback fires. The mechanism is symmetric — it amplifies both directions.

Who does what

The pool prices the coin and holds the depth; that part is trustless. The launcher contract owns every coin's liquidity position and executes harvest, expand, reanchor and buyback; the logic is on-chain but only a keeper can trigger it. The keeper itself is off-chain: it manages margin on Lighter, decides when to act, and signs the NAV.

The contracts never talk to Lighter. They only know what a hedge is worth because the keeper signs that value and posts it on-chain. If the keeper stops, the value goes stale and the affected vault freezes rather than trading on an old number. That is a deliberate fail-safe, and it is the system's main trust assumption — see Risks & Security.

Per-coin backing is tracked on-chain in backingLtShares[meme], so a keeper restart can never lose count of what a coin is owed.