# Lighter's Zero-Fee Strategy for US Perps

**Podcast:** The Milk Road Show
**Published:** 2026-09-24

## Transcript

We think it's...
10x more competitive over the next five years as the US markets open up.
So we think we'll be competing with a lot more people than just hyperliquid.
The Clarity Act has failed.
The SEC and CFTC are rushing to roll out regulatory clarity for the digital asset industry.
And everyone is wondering who is going to win the perps wars once they open the floodgates.
And most importantly, what do we need to know about all of this?
Hello and welcome to Milk Road Crypto, the show that knows that when your project is up more than 500% since March, people are going to ask a lot of questions.
I'm your host, host John Gillen and I'm here to ask questions.
Today is Wednesday, September 23rd.
And today we are joined by Trevor King, who is the head of investor relations and growth at Leiter, the zero fee ZK powered perpetual futures exchange built on Ethereum.
We're going to find out what that means and why it's so bullish.
That sounds good to you.
Make sure you like and subscribe, share this episode with somebody who's going to enjoy it.
As a reminder, today's podcast is free and that would not be possible without our wonderful partners at Nexo, the digital asset platform that lets you trade, earn, and borrow all in one place.
So keep an ear out for more information on them later in the episode.
But for now, welcome to Milk Road Crypto.
Trevor King, how are you?
Good.
That was a mouthful of an intro, man.
Well done.
I'm getting better at these.
Thank you.
Thank you.
Thank you.
Trevor, we crossed paths here in New York City and got to have a quick conversation about Leiter.
And something that jumped out to me from what you said was that you were already pretty full ported into Leiter before you started working there.
And you left Delphi to come to Leiter because you said it was, quote, a generational company.
Talk to me about your conviction in this relatively small project and what got you so excited about Leiter.
Yeah, absolutely.
I mean, maybe some background is for the prior two to three years, I'd focus solely on Perps for the most part.
And so I've gotten to know the team really well.
And I believe Perps was the fastest growing vertical in crypto outside of stable coins.
And now I would argue it's growing faster than stable coins.
And so if I look at tech more broadly, I think it's the second fastest growing vertical in tech outside of AI and AI include robotics.
So I'm like, okay, I really want to lean into perps.
This is a place I feel like I have edge.
I have somewhat of a network in crypto.
I don't in AI.
I have no edge here.
Let me lean into the edge I have.
And so I spent a lot of time speaking with various teams in the perp space.
And Leiter's kind of always stood out.
I remember meeting them here in Miami.
That's where I'm based now.
I remember meeting them 18 months ago and was very impressed.
kept close tabs on them.
And then over the months and quarters of spending more time with them, underwriting them for my personal portfolio, doing some work for Adelphi on that side as well, just getting really close to the team.
And I remember actually being somewhat critical going into their TGE.
And I thought, you know, valuations might have been a little bit lofty.
Actually, I thought valuations were actually probably pretty fair, but I thought the metrics were probably a bit overinflated.
And I think anytime you see incentives, I think it's...
save to like discount some of that volume and how you want to discount that is up to you.
For me, I generally speaking said somewhere between 60 and 80%, I would discount the volume there.
And so I think you kind of saw that post TGE.
And then I remember spending more time with the team after that and kind of, you know, just spending more time with them, their advisors, well priced as well.
I remember coming to the office when the token was down 60, 70% in a matter of whatever, six weeks it was.
And the team was like incredibly locked in.
A lot of times when you come visit teams and the token's down 60, 70, 80% in a few weeks, like morale is really low.
Morale was definitely low here, but usually had people kind of almost looking for the exit.
And there was none of that.
There was no one had resumes open on their computer.
Like everyone was very much so locked in like, hey, what we built is truly incredible.
And we just, we realized what we need to do to kind of like come to market in a better way.
And so I saw them really lean in.
That's when I personally really started putting a lot of my chips on the table.
And then later on, got the opportunity to join them.
And it's been an incredible time ever since.
But I do think it has the potential to be a generational company.
A lot of startups fail, both in crypto and tech and wherever, restaurant businesses, whatever, they fail.
But this is one I think has a great chance of succeeding.
And if we succeed, I think we'll be a household name.
Okay, well, let's talk a little bit more about some of the technicals here before we talk into that success story.
LiDAR is zero fees.
It's ZK powered.
It's zero knowledge technology.
It rolls up right to Ethereum.
Talk to me about what this actually unlocks for users that they should care about because most people don't really care about the tech.
They care about speed and low cost.
Is there an advantage that LiDAR gets from this technology solution they've applied here?
Yeah, so we can think of like an exchange having like three parties.
You have the exchange itself, you have the market makers, and then you have, you know, column.
normal discretionary traders and some of these can be systematic as well.
This is retail, prosumer, hedge funds, the exchange, market makers, things like this.
You kind of have to like exchange has to satisfy all three parties.
Generally speaking, you see an exchange charge both retail and market makers.
We decided we wanted to charge retail zero fees.
We think that's a competitive edge when it comes to getting partners and growing our distribution, especially here in the US.
I think you can look at brokerages and exchanges in the 2010s, 2015 really.
through 2020 and you saw zero fees really take off there.
I think we think something similar happens with perps over time, especially as the US market opens up.
And so we charge retail zero fees and we're able to do this because we give latency advantages to market makers.
A lot of people want to say this is like payment forwarder flow.
It's not quite PFOF.
It looks and smells like it, but it's not quite because we're not a broker.
So we're not technically offering up that flow.
So it's not PFOF.
But so we're able to satisfy these three parties because market makers have somewhat of an advantage over retail.
retail gets the best execution possible because one, it's zero fees to market makers are having to quote tight because they don't get a last look.
And so they're quoting incredibly tight to bid and get this benign flow of retail.
And we use so are profitable for market makers.
So you have all three of these parties who are satisfied.
And so we think this is very much show competitive edge for us going into the US markets and more globally.
More so as well, because we're really good dance partners.
Because we charge zero fees, we can share economics really well and be a good dance partner for some of these larger institutions.
And I think Robinhood is a great example of that.
Telegram is a great example of that.
Menara is a great example of that.
And those are like three of our largest partners to date.
Just want to pause for a quick second to remind you all that the crypto bull market is back.
I have been deploying capital into altcoins that I think are going to do very well this bull market.
Some of them are already up over 2x from where I entered.
So if you want to see what's in my portfolio, what's on my watch list, and have access to me in Discord to ask questions 24 hours a day, join Milkroad Pro now.
The link is in the description.
It's just a dollar.
I'll see you there.
Well, let's talk a little bit about some of these partnerships.
You've always referred to Leiter's model for partners as a white glove relationship where you actually deploy engineers to work with the partner on setting that up.
Is partnerships the main strategy for growing Leiter at this point?
And how do you think about finding new dance partners as you go about this process?
Yeah, I think this white glove approach and growing distribution with partners is definitely a big piece for us in growing overall market share.
growing our market share market dominance and things like that is definitely something we're leaning into and then we focus on multiple geographies like everyone assumes us with like associates us with the us and yes we are incredibly focused on US and getting US partners.
But we also spent a lot of time in Latin America.
We spent a lot of time in Asia as well trying to get partners in different places.
We announced a partnership with Bitcub, which should go live later this year.
And we're very excited to work with them, the largest exchange in Thailand.
And so we're really excited for these partnerships as well.
And yes, we do think this is a huge way to grow our distribution is working with these partners who already have huge distribution.
I mean, take Robinhood, for instance, I believe they've got 26 million monthly active users.
That's a lot of users.
as many multiples of what we have in crypto today.
And so really excited to continue to work with various partners in garage distribution.
The partnership with Robinhood has gotten a lot of attention, a lot of volume.
I'm curious your perspective on the success of this because it's not LIDR itself.
It's an instance of LIDR that's built specifically for Robinhood.
What's the success metric there?
And who's getting the better end of the deal?
Is Robinhood getting a better deal from LIDR?
How does that break down in your mind?
What's your view on this so far?
I think it's a very mutually beneficial relationship.
And so just for those that don't know, we have a 50-50 rev share with Robinhood on this.
So they make 50% of the revenue, we make 50% of the revenue.
And if you're following this on-chain, just for those on-chain sleuths out there, all the revenue will come to us.
We still manage that instance, and then we'll actually be dishing out and giving 50% back to whatever Robinhood wallet they want that to go to.
And we think that's an incredible relationship.
that we've got with them.
And we're excited to continue to explore what that looks like in the future.
And right now, success, I think, is open interest volume, revenue, and things like that, which are all growing at a rapid rate.
And we're very excited for this.
I think the Robinhood instance might be a top 10 by open interest now in DeFi Llama.
So we're really excited to see that success.
And we want to continue to see that grow.
RWAs are 70% of that open interest.
And so we're seeing a lot of interest there.
And a lot of that is driven from some composability aspects of on Robinhood chain.
So you've seen people like long.xyz do tokenize of professional futures and tokenizing those and doing interesting stuff.
And we've got many other partners who will come to market in short order who are doing something similar.
And so we're really excited to see the growth on that side of the business, which isn't something that's part of the business.
I definitely discounted.
I have discounted for ever since I've known LIDAR, like this composability aspect, I very much have discounted, but it's been pretty amazing to see this play out over the last call it two to three months.
Okay, so it's been positive for all parties.
It's just kind of like your example with the exchanges and how Leiter is trying to be beneficial for all stakeholders.
It seems like that's what you're aiming for here as well.
The reason why I wanted to start with this conversation on distribution is that I've heard you specifically name distribution as a key part of Leiter's strategy to go after the juggernaut of the space, which is hyperliquid, which is, you know.
20 times or so bigger by market cap and has, I think, just crossed all-time highs on open interest of around $18 billion.
Is this the essential strategic move, you think, to make Lighter compete with Hyperliquid?
And why is distribution so key for growing a Perp's platform right now?
Yeah, so, I mean, we want to grow distribution in the U.S., we want to grow it in the rest of the world.
And yes, everyone wants to kind of pin us against Hyperliquid.
We think they're an incredible team, very competent, a great product.
I've been using the product for many years.
But we're ultimately competing with a lot more than that.
We think as the U.S.
market opens up, the PERP landscape gets 100x more competitive because the TAM is 100x.
And so while I think a lot of people in crypto who've been around for the last 24 months think PERPs have been incredibly competitive over the last 24 months, you really saw the emergence of Hyperliquid and you've seen many others, including Lighter, come after and similar timelines and think that's really competitive.
We think it's 10x more competitive over the next.
five years as the US markets open up.
So we think we'll be competing with a lot more people than just Hyperliquid.
But regardless of who you're competing with, you need distribution, you need users, you need partners.
And so you can have the greatest tech in the world, which we think we might in this space, but we need the distribution.
And so we're very excited to continue to go after partners.
We want to grow the overall part pie.
Yes, I think there's like a lot of you know, low hanging fruits in crypto that in teams that we can start to work with.
And we think that's fantastic.
And we want to work with those teams.
But what's going to really grow the overall pie is more so working with traditional financial institutions here in the US because the US is still the capital markets of the world.
And we want to work with these teams.
And so we want to do both.
We want to focus on the crypto natives and continue to work with them.
We think they're incredible partners that move fast.
But we also want to spend a lot of time working on the elephants in the room that are very much the financial institutions here in the US.
And so like we want to grow the overall pie.
think it grows 100x from here and we want to own a decent chunk of that.
Okay.
I want to talk more about the total adjustable market as you see it.
But first, I think this conversation around institutional distribution is a really fascinating one because I've heard you say that...
perpetuals are like an ideal product for retail, but the institutional distribution competition is heating up payward, which is Kraken's parent company and BitGo recently disclosed deals with hyperliquid to make it easier for institutions to access hyperliquid.
And I'm curious your thoughts on the strategic moves that lighter needs to make to compete in that institutional distribution war with hyperliquid and other competitors, obviously, but like, what's your strategy for institutions specifically?
I think this also comes back to your first question regarding the tech and how I kind of explained how we're able to offer zero fees.
Zero fees makes us a really good dance partner because we can share economics really well.
And so when you go to work, if you want to go pitch an institution and if you say, hey, I want to take, you know, let's just call it a four to five bit take rate.
And then you can kind of like charge anything over that.
We're going to give you the short rate.
They're going to laugh at you and never talk to you again.
And so you need to be able to share economics really well.
And so we think we share economics really well.
And so as we think about going to market, one, we're spending a lot of time in D.C.
We're spending a lot of time with the CFTC trying to get U.S.
licensing to operate here in the U.S.
And we also have this economic advantage, if you will, to where we can share economics really, really well without it hurting our bottom line.
And so there's twofold, it's like spending a lot of time in DC trying to get the right licenses to operate in the US legally, and then also having taken this white glove approach and being able to share economics and being a great dance partner.
Okay, well, let's talk about what's been going on in DC because things have been popping off.
The SEC and the CFTC have been really clear about trying to roll out regulations to accommodate a lot of things in crypto, but perpetuals are definitely one of them.
Trump said hyperliquid by name in the White House.
And I'm curious if you think that they are kind of taking an even-handed approach to the whole asset class or the industry overall, or do you think that they are tilted a little more in favor of a hyperliquid or of some US native institution?
institutions and just kind of how you see this regulatory landscape evolving as you've been spending a lot of time in Washington.
Yeah, I didn't have Trump saying hyperliquid on my bingo card.
That's for sure.
But it's incredible.
I mean, I think it's a massive win for the overall industry.
It shows that it's important to more than just the CFTC and SEC, but it goes all the way up to the top of the food chain of people who are interested in this.
And yes, there's plenty of dollars behind those motives, of course.
But we've been very encouraged with how fast the CFTC is willing to work.
They operate very much like a startup.
And for those of you who don't know, generally speaking, if you were to submit an application with the CFTC, you have a 180-day window where they say yes, no, or hey, we need more time.
And generally speaking, in prior administrations, a lot of times you would see you'd go 179 days with nothing from them, and then they say they need more time.
And so it was...
It was frustrating.
And with this administration, they're very proactive.
We don't think they want to take the full 180 day window to come to a conclusion.
And so we've been very impressed.
We enjoy working with them.
We have great relationships with the CFTC.
And yes, Clarity didn't pass.
And I know a lot of people ask about this, but Clarity, you know, we supported Clarity, but Clarity not passing doesn't really affect our business whatsoever.
The way we operate as a business doesn't change.
And we think the SEC and CFTC will step in and make great rules and regulations around crypto assets.
Well, I think a lot of other players in the space see the same opportunity.
Kalshi already offers regulated perps onshore in the US.
For better or worse, there's a lot of drama around that, which we won't go into.
But Coinbase and Kraken are both applying to offer perps as well onshore in the United States directly here.
So it seems like we're just going to see a lot of competition in the perpetual space.
What's Leiter's strategy for survival here?
Do you think you just want to continue to try to be the best dance partner?
Are you expanding into other markets?
What's the view there?
be best dance partners is something I want to continue to hit home with both investors and retails.
Like we want to be an incredible dance partner.
We have what we think is incredible technology.
We have an incredible engineering team who we can.
Build things and customize things specifically for your users, for your clients.
What is the best use for you and your business?
We can do this and we can share economics.
And so it's going to be the same thing.
It's been three different questions.
It's the same answer because this is a big piece for us.
It's this white glove approach.
It's being a good dance partner.
It's having very talented and competitive software engineers.
We don't just have vibe coders.
We have some of the best engineering talent in the world here at Leiter.
And I have never been more impressed by an engineering team.
think we are incredibly competitive there.
And I think that's a huge competitive advantage for us.
Okay, well, let's just leave the strategy on competition there for a moment.
But I do want to come back to this question of the total addressable market as you see it, because a lot of people debate this question as it relates to perpetuals, as it relates to crypto overall.
How do you go about thinking about not just, you know, for perpetuals, but for LIDR specifically, what is the total addressable market for all of your products?
And how are you like thinking about getting from where you are today and towards that target?
Yeah, I mean, I think you've seen this over the last six months, eight months really start to play out.
Like you've seen commodities pick up late last year, early this year, as there was speculative fervor and animal spirits and gold, silver, copper, uranium, you name it, there was animal spirits there.
And now you saw that pivot kind of come down and you saw it go into equities and now equities.
We actually just had our largest equity per volume day ever in the history of lighter two days ago.
And so we are very encouraged by the continued growth there.
And so now I believe it's just about 20% or 30% of our daily volume comes from RWAs, which is asset class diversification from a revenue standpoint, from a business standpoint, which I really enjoy coming from the investor side.
You've less cyclical correlation to equities or to crypto.
And so I've been very encouraged with that.
And when you think about the TAM overall, it's like, okay, how big is crypto?
And how many more multiples bigger are equities?
And you add in commodities.
And then one no one's talking about right now is FX markets.
We think FX markets could be quite big as well.
FX is, generally speaking, not a super high margin business, but we think there is a use case there because those are markets that have a lot of room for improvement.
And we think we can step in and help there a lot.
And so when you think about that...
you know, it comes out to be, you know, 50 to 100 times larger than what it is in crypto, just from a market cap standpoint, from a volume standpoint.
And so we very much look forward to the expansion and the growth of equities, commodities, FX, you name it from various asset classes, led the first iteration of options live.
And then, you know, by end of the year, we'll have kind of a full options.
suite product.
And so then we'll have, you know, we'll have spot, perps, binaries, and dated.
And so we're very excited for that because we think that also we see huge, huge fall growth there.
Okay, so there's a lot in that question, but you talked about your view of the addressable market for perps.
And this was my next question, which is why I knew what you were talking about was options, because you guys are going into options and prediction markets, which, as you said, I gather you all refer to as binaries, like, yes, no, which is, you know, we call it a prediction market, you call it binary, whatever language you use for it, you're expanding in that direction.
Talk to me about how investors should interpret this.
Are you guys just trying to grow the pie by bringing out these new products?
Or is this sort of a tacit admission that, hey, maybe the perps landscape is too competitive for us and we need to bring new products to market to keep growing.
You're laughing, but how do you think about this?
What's the strategy?
We don't think it's too competitive for us.
We just think this is a natural extension of our business and it's a very complimentary product.
And then over time, we think asset managers come on chain.
We see really sophisticated vault growth over the years.
And if you're an asset manager in traditional finance, you have spot, you have futures, you have binaries, like traditional binaries, everyone calls them prediction markets now, but they're originally binaries.
And then you have data.
This gives you a lot of flexibility and a lot of explicity.
I can't say that word.
I'm illiterate.
You can be very explicit with the way in which you put on a bet.
And so you have a ton of flexibility there.
And so options and binaries.
Futures and spot gives you a ton of creativity in the way in which you express a bet.
And so we think that's huge growth.
It's not because we don't think we can compete in perps.
In fact, I think we are perfectly suited to compete at a very, very high level for many, many years and build a generational company in just perps.
But we think options is a very nice, complimentary product to have in this market.
I got tongue tied there.
I apologize.
That's okay.
We're both excited.
It's a bull market.
I understand.
What part of the market are you aiming to serve with some of these things, right?
Like, do you think that there are a lot of people who want these products who just can't get access to them?
Do you think that they already have access to products that you can just offer a better version of?
Because like you said, binaries have existed.
Options have existed.
What's your thought process on that?
And how do you see the market landscape right now?
The market landscape right now, I think you've got derived in the last few weeks, who's really emerged as kind of like the market leader.
You have Paradex and Dime, incubated by Paradigm, incredible options platform.
And I think they're actually pretty good products.
Like I've used them.
I think they're good products.
I started my career trading options.
I started when I was very young trading options in high school.
And they're near and dear to my heart, near and dear to many people on this team's heart.
And we think it's really just a complimentary product alongside perps.
I don't think we have a house view on options growth overall.
I mean, you can just look at zero DTEs and look at the growth on Robinhood.
It's pretty incredible.
And how much of that is cannibalized by perps, I don't have a personal view, but I just think it's a very complimentary product to have alongside options.
And I think there's great products.
you know, out there today.
I think Drive is pretty good.
I think Paradex is pretty good.
But I think we'll have a highly competitive product.
And I think we'll have incredible distribution.
And you asked who's the target audience there.
Here, it's definitely prosumers, there's definitely institutions, and it's definitely like retail.
So it's the same buckets that would trade perps.
But it's a very different expression of a bet.
And it's very complimentary.
And it can be a great hedge to an existing position or vice versa.
And so we think these play very well hand in hand.
Okay, so it's the products that your target?
user segments are going to want and you think you can compete there.
So that all makes sense strategically.
I think options too is like an easier cross sell than prediction markets.
Look at Kaushii, look at Polymarket, look at the cross sell they've had from prediction markets to perps.
Not that those aren't going to be successful, I'm sure they will be.
But if you look at it today, it's been pretty slow.
I think a lot of people thought it'd be incredibly fast.
And I think if you look at HIP 4.2, I think a lot of people thought, oh, boom, this is like going to be this, you know, within the month one, this can mean this massive revenue driver for the business, and it's just not.
And I think we kind of hold that view.
It's like having binary, we call them binaries because they are binary options.
I think those are great to have, and it's a nice tool, but it's not as complimentary as true dated vanilla options that are very convex.
You can have a lot of flexibility there.
Versus like having the dated options we think is going to be an incredible cross sell versus prediction markets.
Prediction markets, the prediction market user behavior, if you look at it on Polymarket or even just, yeah, Polymarket versus height versus slider, like it's a very different user behavior than trading.
Trading, you constantly are clicking most of the time.
Most users don't hold positions very long on perps.
Learn some discipline maybe, but they're clicking buttons a lot versus prediction markets.
It's kind of like I have this, but I think, you know, Trump gets elected.
A lot of it were politics originally, and now it's sports betting, regulatory arbitrage, whatever you want to call it.
And so people are going about it that way.
And that's a very different user behavior than taking an express or placing a bet and expressing a view on the world via perpetual futures or options.
So it's a very different bet that the user is making.
And so options is a much easier cross-sell, in our opinion, than prediction markets.
I really appreciate your views on that, and especially somebody who's such an experienced options trader.
We had Nick Forrester of Derive on the channel not long ago.
So I've been learning a lot about all of this.
Nick is great.
There's a lot of great things being built.
And I'm just learning a ton from all this.
I'm curious your thoughts on this.
We talked about retail users.
We talked about institutions.
I'm curious your thoughts and strategy for agentic finance and agentic users, because I've done a lot of interviews with people like Raul Powell and Jordi Visser, Tom Lee, talking about this collision between digital assets and agentic finance.
And I'm curious what Leiter's strategy or vision is on that, because we haven't talked about that yet.
We've launched a fair amount of tools for people to connect agents and trade via LiDAR.
We think there's growth there.
I mean, personally, it's one I'm excited about, but it's not a place I necessarily have competitive edge.
I think if you had one of our engineers on, they give you a much better answer than I would.
This is a place I don't feel like I have an edge or like a great, great point of view.
I think it's been overhyped so far.
I think it's going to be pretty big for micropayments.
for trading perps.
I'm not sure.
I think the best use case, and this really isn't agentic, but it's more of systematic.
One of our partners, Manara, who's actually our largest partner on the partner attribution side, they run systematic strategies and they've got agents and things like this as well.
And they've seen incredible success on lighter versus other platforms and that's strictly because zero fees.
And so when you're running these high turnover strategies and maybe an agent would run this, having zero fees.
is actually massively accretive to your P&L.
First, if you're having to pay fees and you have a ton of turnover, it really hits your P&L.
And so Manara is a great example of this.
I think Pair Protocol, to an extent, is also a great example of this.
They have had great success on Leiter, but they haven't necessarily on other platforms.
And so I know this isn't quite the agentic question you're asking, but if you think agents spend a lot of money and they do it frequently, having a lower cost there is going to be massively accretive to the performance of whatever agent you're running.
You know, one of the weird things about crypto is that the longer you're in it, the more accounts you seem to end up with.
You buy in one place, trade somewhere else, earn yield somewhere else.
And if you actually need capital, you end up having to sell something that you probably wanted to keep.
That's why we at Milk Road are partnering with Nexo.
These guys keep the whole thing under one account.
You can buy, trade crypto, earn interest on what you already hold, and even borrow against your capital without having to sell it.
All in one spot, all in one account, all on Nexo.
So if you need liquidity, but you don't want to give up your position, or you're already holding crypto and you want to be able to do more with it, I think Nexo is worth your time.
We love working with them.
I think you will too.
Tell them Milk Road sent you.
Gotcha.
Okay.
Well, I'm interested to see how that all plays out.
Let's talk about...
The token lit.
You guys have switched from a buy back and hold to a buy back and burn program.
I think July was when you guys made this transition.
Since then, you have burned over 6% of the total supply.
And I'm just curious your thoughts on this in terms of revenue that Lighter is making and driving that value to the token.
And just like, what's the response been from the market to this change?
Yeah, I think it's important to note that that's like 6% of circulating supply.
Okay.
For what it's worth, 6% of the circulating supply.
And yeah, we plan on continuing to do buybacks.
We think it's a great way to show alignment with the community.
I think buybacks, like Hyperliquid kind of championed those a few years ago.
I think it's just a great way to show and earn trust.
with the market.
I think in crypto over the last 10 years, we've kind of gotten burned by teams and founders.
And so it's a great way to align incentives, unfortunately.
And so I think we do buybacks to earn trust.
And I think over time, and maybe this is where SEC and CFTC step in, is once we can kind of assign token rights to token holders, I think that probably changes because Most companies that do buybacks today do it on a percentage of revenue and top line revenue, not bottom line, not earnings, not free cash flow.
And so I think over time, it's probably a percentage of free cash flow.
But yes, we continue to do 100% of buybacks with revenues and we want to be massively aligned with our community.
And as the regulatory landscape changes, we'll be flexible in that.
How do you see the strategy changing in that world where you can assign token rights to token holders and you don't have to use so much of the capital to just buy back the token?
What does that unlock for Leiter and what would change in that landscape?
We could be a lot more disciplined on our spend and growth.
I mean, I think if you look at a normal equity business, they spend most of their money on R&D and growth.
CapEx build out.
I mean, it's been the only talk of the talent on Bloomberg for the last six years with AI.
And like, this is very much so like how normal tech companies go.
And I think we're very much so a tech company.
Like, I don't like, yes, it's a crypto business, but like we're very much so a tech company and we are diversifying our revenue streams and various asset classes.
And so like, we want to operate very much so as a tech company, as a startup, we want to be investing into growth.
And so once we can assign rights and...
things like that to the token.
I definitely think it makes more sense to spend money on growth.
But for the foreseeable future, maybe that's years, we will continue to buy back 100% or buy back with 100% of revenues for the foreseeable future.
Maybe that's years, maybe that's not, who knows.
Okay, gotcha.
All right.
Yeah, we just want to make sure that we have a great relationship with the community investors and to trust us.
We want to be good stewards of the capital we have.
And we don't want to burn that.
Yes, we'll do buyback and burns, but we don't want to go light that on fire.
with various incentives.
And so when we think about going to do a deal with somebody, we want to be very selective with who we work with, how we spend, both internally and externally with partners.
We want to be good stewards of the capital we have.
We want to be good investors, good allocators from a business standpoint, making sure we're spending money on the right places that are going to have a really high ROIC, return on invested capital for the business.
You just said you want to be selective with your partners.
Are there conversations you've had with people where you've had to say no for certain reasons?
Or what might cause you to have to say no to a partner that you were interested in but couldn't get to a certain point on a deal?
What would happen there?
Yes, we have.
And this is more so specifically – I mean our SDK is open source.
LightRTS is now open source, which is a lot of our front-end components, which builders have been reaching out and are very appreciative of.
But so that's fine.
Whoever wants to build can build.
But then when it comes to instances like what we built for Robinhood, we have the Robinhood lighter instance.
There are other teams even prior to that instance going live who are asking if we could build an instance for them.
Sometimes it doesn't make sense to build an instance because they can't solve the bootstrapping problem.
Like you have to find the liquidity.
You have to have the distribution to have the taker flow.
You have to have the market maker relationships and you've got to have a pretty big balance sheet because you have to fund that.
And so sometimes it doesn't make sense from that standpoint, but if you can solve the bootstrapping problem and you've got great distribution like Robinhood, it makes a ton of sense.
There are others that don't have the same type of distribution that it doesn't make sense to kind of have your own instance.
And so it makes a lot more sense to just plug into our SDK and use partner attribution.
Okay, so there's a lot of variance in terms of what is the right solution for what partnership there.
In these conversations you're having, you're head of growth and investor relations.
In these conversations that you're having, is this more like people are coming to you desperate to get some sort of solution for perps?
Or are you still having to sort of pitch perps and crypto to them?
And what's the nature of those conversations?
Is it more like you knocking on doors or fielding income?
It's both, but it's definitely more of me knocking on doors.
Like we get some inbound, which is great.
And we love that.
But I don't know too many people that are knocking on traditional financial institution doors.
The same with some of the larger crypto players.
I don't know how many people are knocking on doors there.
And so we spend a lot of time knocking on doors.
I think we have been in sort of like Manu leads our BD team.
I think he's done a stellar job of growing the BD team and knocking on doors.
He really champions that.
I've stepped in there and started knocking on a lot more.
doors as well.
And, you know, I think that's like a core focus for me.
Like, yes, while I might lead investor relations, I continue to have conversations with investors.
If you're an investor watching this, please reach out.
I'm happy to chat, but I'm spending a lot more of my time on the BD side, like knocking on doors, getting deals done.
Like we want to grow our distribution.
And we don't want to just grow our distribution to actually want to grow to a hundred X and who are the right partners to work with.
And so spending a lot of time with these partners and a lot of them are slower moving.
First in crypto, generally speaking, you have a conversation and you usually have a proposal and a term seed shined within a week.
These are months, quarters.
And so it's very much like this courting phase where we spend a lot of time with these partners in person virtually.
So doing a lot of door knocking.
Yeah, well, I think if you're knocking on doors that are taking longer to get back to, it's usually because those conversations are more worth having.
So stick with it.
I want to ask another question around the token.
There's a staking rewards program that's been initiated, which I believe was funded with 250 million token reserve targeting around a 6% yield on lit.
But this seems like this program is set up to run for maybe a limited amount of time, but maybe not forever.
Is this also something you think you might sunset at some point or just like what's your thoughts on the evolution?
of the staking program.
We're flexible with that.
I don't think it's a needle mover if we were to increase that 4% or decrease that 4%, but we remain flexible in that allocation of capital.
Okay, well, we'll just let that sit there then.
Do you think that zero fees is going to be something that Lighter continues to offer in perpetuity?
Because I've wondered about this a lot.
Is this something you're committed to maintaining?
Is this something that might change in the future as dynamics in the market change and the business needs to bring in that revenue?
What's your thoughts on that and the outlook?
Yeah, absolutely.
We want it to be zero fees for retail.
We do believe that.
But it doesn't mean we won't monetize in different ways.
So we recently announced we've changed.
the way in which we monetize some flow.
So originally you had a standard account, which was free, and then you had a premium account, which a lot of market makers and call it, you know, sophisticated API traders were using because you had higher rate limits and you had to pay fees there.
Retail was free.
Now we've actually introduced a new tier called Plus.
And so we had a lot of users on the free accounts who are running into rate limit issues because they were using the API for TWAPs.
And so you would hit your rate limit pretty quickly.
pretty quickly there.
And so we've introduced this plus tier where we charge 0.5 bps maker-taker, and you have much higher rate limits.
And so we have seen some movement from free accounts to plus accounts, even to premium accounts for higher rate limits.
And so there's other ways in which to monetize.
We've also introduced a lot of OEMS type of features, order and execution management system type of trading features, icebergs, RFQ, advanced TWOPs that are both maker-taker, atomic orders.
And for some of those, we do charge 1 bp.
for retail, for free users.
Now they can use the other features, they're completely free, but we believe these are very much so premium features that just deserve a premium fee.
And so we do monetize on that a little bit as well.
But the core feature, the core functionality of the exchange, yes, will be free.
Okay, so you're going to try to maintain that, but the monetization strategy could evolve somewhat here.
Trevor, I'm curious about something.
Just one other piece on that.
I think we have a lot, there's a fair amount of pricing power, I think, to be had with our model as well.
And I think we can get very creative with flexing some of that pricing power.
I think you see some of that on Robinhood right now, actually.
So for those of you who don't know, who haven't looked at the docs, the market maker fees, the premium account fees on the Robinhood instance are three times as much as what they are on the main instance.
And so it's kind of, you can kind of see where some pricing power could come into play there.
Do you want to elaborate on that a little bit more for people who maybe aren't reading between the lines of what you're saying here?
What are you getting at here?
Yeah, so we make our money, as mentioned earlier, from market makers and sophisticated traders who are using advanced features and need higher rate limits.
And there's a fee on those on the main instance.
And what that fee is is three times as much on the Robinhood instance.
And it's kind of like, okay, well, how much can you charge these users before they leave?
And so that's what pricing power is.
And so we're kind of experimenting with that in a way.
And I think we did that about four or five months ago.
We actually increased it on the main instance.
And so I think it's safe to assume you'll see some more of that over the next year.
I think we want to be slow in this.
We don't have to monetize right now aggressively, and we don't want to do that.
We just want to focus on distribution, but there are a fair amount of monetization levers we can pull internally.
Okay, well, let's game this out a little bit, because it seems to me like a lot of the institutions and players in the industry that you might be partnering with or seeking to partner with to increase the distribution, at some point, maybe not in the short term, but at some point in the long run, eventually become sort of an adversary or a competitor in some way, at least at some point, right?
How do you think about that?
Because when you're trying to do this right now, it may be advantageous in the future, it may be adversarial.
How do you navigate those relationships when you're talking to these institutions?
I think most of the time it's a great partnership, a long-term partnership.
We don't plan on having 12-month partnerships, 24-month partnerships.
We want these to be long-term, five, 10-year partnerships.
And most of the people we're having conversations with, we don't view us competitors.
They don't view us as competitors, very much as partners.
Okay, well, I think we'll have to monitor how that situation evolves.
Trevor, I'm going to ask a question here, and you take this however you want.
When should I next expect to hear you making some headline news?
Sometime soon.
I know I don't have a good answer for you.
We're excited for the partners we're having conversations with.
And I think it's safe to assume you'll hear more from us.
Okay.
Well, you keep knocking on those doors.
Matt Hogan from Bitwise is a frequent guest of the show.
And he says that it takes like an average of eight meetings with an institutional player before anything happens.
So that can take months for those eight meetings to happen too.
So we'll keep paying attention.
Trevor, thank you so much for being here.
I would also add shout out to like the Bitwise guys.
They're fantastic.
Matt, Ryan, the whole team over there.
They just want, we have an ETP in Europe now.
And so they're an incredible team.
Yeah, no, I saw that.
It's like, I think this morning that came out.
So there's just a lot happening all the time and the headlines keep coming.
I'm sure they will continue to.
Trevor, thank you so much for being on Milk Road Crypto.
I learned a lot.
I think our audience has learned a lot.
Full disclosure, I have a bag of light as well.
Lit, light, lighter, whatever.
Because, you know, after talking to you and a lot of other people for a long time, you know, one of our analysts here at Milk Road called this like when lighter was below a dollar.
He said you guys were going to be huge.
So we've been a big fan of the work for a long time.
Where can we send people to find more of you and your work online?
just follow me trevor underscore flipper on x all right sir well let's make sure everybody does that uh i think that is the end of my questions so we'll probably cut me saying this out but trevor king head of investor relations and growth at lighter thank you so much for being on milco crypto it was a pleasure thanks for having me And thank you all for joining us.
I hope you all learned something today.
There's a lot of bullish alpha in this one.
So I hope you take some time to digest all of it.
Until next time, stay safe, stay educated, stay bullish.
And we will see you all on the next episode of Milk Road Crypto.
Thanks for being here, everyone.
Bye.
Check out Milk Road Pro at the link below.
Everything you hear on Milk Road is for informational purposes only.
These are our personal opinions, not financial advice.
And we may own some of the investments we talk about.
Always do your own research and make the decisions that are right for you.
See you next time.