0 fee Crypto Assets exchange, how Lighter supported by Peter Thiel replicates the Robinhood business model

Lighter recently completed its latest round of financing, raising 68 million USD, led by Silicon Valley pro Peter Thiel's Founders Fund and Ribbit Capital, with participation from Haun Ventures and Robinhood. According to insiders, this round of financing has brought the company's valuation to 1.5 billion USD, with the transaction including equity and warrants for tokens that have not yet been issued (token warrants).

(Lighter secured $68 million from Founders Fund and Robinhood, with a valuation looking at $1.5 billion)

In 2024, there will also be a $21 million financing led by Haun Ventures and Craft Ventures. Other notable investors include a16z, Lightspeed Venture, and Coatue Management.

Order flow payment PFOF, 2025 0 fee cryptocurrency exchange

Among them, besides Peter Thiel's Founders Fund, I particularly noticed the participation of Robinhood, as Lighter is essentially replicating Robinhood's business model. Now that Robinhood is also involved in Lighter, the implications behind it go beyond mere investment.

Lighter, like Hyperliquid and Aster, has the biggest feature of being an on-chain contract exchange with 0 fees. Most people will be surprised, 0 fees, then how does the exchange make money? In fact, this has long been a validated business model. Lighter “sells” retail orders to market makers. The job of market makers is to ensure sufficient liquidity, and placing an order in Lighter is equivalent to selling “liquidity” to market makers, which means that the charging object has shifted from small retail investors to market makers.

The most well-known business model is the U.S. stock and crypto brokerage Robinhood, which also emphasizes a 0 fee structure. The PFOF “Payment for Order Flow” data refers to the revenue that exchanges can earn for every $1 traded. Robinhood earns approximately $0.00026 for every $1 traded. At the beginning of September, someone calculated that if Lighter could negotiate a similar PFOF, its annual revenue would be around $474.5 million.

Lighter Genesis Airdrop Share 30%, AMA Highlights Summary

Last month, Lighter officially held an AMA, and the summary of the content is as follows:

The ecosystem is built on Ethereum (L2 mode ), and will integrate DeFi applications such as Aave/Morph/Uniswap, using LLP Token for L1 DeFi collateral.

Spot trading is expected to go live in late October/early November, with fees being zero or far lower than competitors' prices.

Cross-margin will be launched before the end of the year. ( uses spot as collateral for perpetual contracts ).

The RWA sector has launched gold and other assets, with stocks set to launch before the end of the year. Options will be introduced next year, followed by dark pools.

Revenue Model and Transparency: Retail user transactions are free, while professional market makers/high-frequency trading users need to pay extremely low fees, with revenues exceeding expectations. Lighter will announce the revenue status as soon as the tiered charging rules are finalized.

Airdrops, points, and tokens: The airdrop of points for the first and second quarters accounts for 25-30% of the token supply. The total community allocation will reach 50% ( for future airdrops/partners/donations ). There are plans for buybacks and various uses of tokens, including entry into exclusive/experimental LP pools, markets, reducing market maker fees, and potential staking. Governance will be postponed until the system is more decentralized, possibly around 2 years.

In contrast, Hyperliquid's genesis airdrop is 31% Token, community rewards are 38.888% Token, and the current price of Lighter's off-market points has already reached 100 USD/point. It is understood that the official will soon airdrop meme coins to users.

(Reviewing this year's most successful airdrop: What makes Hyperliquid a textbook example of narrative and Token economics?)

This article on 0 transaction fee cryptocurrency exchanges, how Lighter, supported by Peter Thiel, replicates the business model of Robinhood, first appeared in Chain News ABMedia.