Glossary

API key — the keeper's trading key on Lighter, generated locally by the keeper's setup script and registered on the hedge wallet's account with the wallet key. It places and cancels orders and reads the account; it cannot withdraw anywhere but to the wallet's own address on Ethereum. Separate from the hedge wallet's own key.

Arbitrum — the Ethereum rollup where Lighter's fast withdrawals pay out. Nothing of Flake Fun's lives there, but every returning hedge dollar lands on the hedge wallet there for one hop before Circle's CCTP carries it back into the vault on Avalanche. See The hedge book.

Avalanche — the Avalanche C-Chain (chain id 43114), where every coin, pool, tracker vault and NAV oracle lives. Blocks come about every second and are final within a second or two; gas is paid in AVAX. Its explorer is snowtrace.io.

AVAX — Avalanche's native coin, used here for gas and nothing else. A transaction costs a fraction of a cent. No contract of ours accepts it as payment.

Backing — the quote-side balance sitting in a coin's own pool. Before the bond it is USDC; after, the coin's tracker. It is the money the coin's trading has actually put behind it, not a valuation.

Bond — the one-time migration that re-pairs a coin from USDC to its leveraged tracker, at the same dollar price, once the pool has accumulated the launcher's threshold. Permissionless.

bondBackingUsd — the bond threshold, in USDC, immutable and public on the launcher. 15,000 USDC.

Bond-gated tracker — a tracker that has not bonded yet: its NAV is pinned at exactly 1.0 and its vault refuses to send anything to the venue (fundHedge reverts NotBonded). Every shared tracker starts this way; the keeper bonds it (LTFactory.pokeBond) once its vault holds $15,000 of backing.

CCTP — Circle's Cross-Chain Transfer Protocol (V2): USDC is burned on one chain (depositForBurn on TokenMessengerV2), Circle's attestation service signs the burn, and the same amount is minted on the other chain (receiveMessage on MessageTransmitterV2). There is no wrapped token and no pool in between. The hedge wallet uses it on the way back only, from Arbitrum (domain 3) to Avalanche (domain 1), with the vault as the mint recipient. Circle can pause it, and its fee and latency on this route have not been measured yet.

CREATE2 mining — searching for a deployment salt that produces a coin address sorting below its quote (and below its tracker), so the coin is always token0 and is priced the right way up by every tracker.

Creator fee — 0.7% of every swap, booked to whoever launched the coin, claimable at any time, forever.

Cross margin — one USDC balance backing every position in a Lighter account. The hedge wallet's account holds every one of its trackers' positions, so the keeper's virtual ledger attributes each tracker its share of the cash and positions; a tracker's leverage is its notional divided by its share of the equity.

Direction — long or short. A long tracker rises with its market; a short tracker rises when its market falls. Marked by an S suffix on the tracker symbol.

Entry — on the hedge book, the mark at which a tracker's position was opened. Added backing averages into it at the mark it arrived at.

Escape hatch — Lighter's exit path on Ethereum: because Lighter is a rollup, an account holder can force a withdrawal on Ethereum if the venue stops processing them. It pays the account's own address — the hedge wallet — so it is a last resort, not the keeper's path.

Fast withdrawal — Lighter's quick way out: a transfer to Lighter's fast-withdraw pool, signed by the hedge wallet's key, that the pool pays to the same wallet on Arbitrum in 15–20 seconds according to Lighter's docs, for a fee its API quotes (3 USDC per the docs; not measured live yet), minimum 4 USDC. The keeper only ever names the wallet itself as recipient. If the pool is short, the return waits.

Funding — the periodic payment between longs and shorts that keeps a perpetual near its index. On Lighter it settles every hour, at the rate Lighter publishes for each market.

Funding cap (fundableUsdc()) — the most a tracker's vault can send to its hedge wallet right now: its idle USDC above its redemption floor, protocol fees excluded, enforced on chain by fundHedge. Shared trackers keep a floor of zero, so the books never run ahead of the venue.

Hedge wallet — the ordinary wallet (not a contract) that holds the Lighter account in which every one of its trackers is hedged, on the protocol's behalf. A tracker's vault records it as its hedgeFunder, the only address fundHedge can pay, and LTFactory.venueRouting(lt) returns it as the tracker's trader. Its key sits online on the keeper's machine, because deposits and recalls run automatically; it sends USDC to Lighter's deposit address on Avalanche, signs fast withdrawals that pay itself on Arbitrum, and burns those dollars back with CCTP naming a vault as recipient. It holds AVAX on Avalanche and a little ETH on Arbitrum for gas, both the operator's money. See The hedge book.

Holdable cap — the most leverage a position can hold on a market: 90% of Lighter's cap for the market, rounded down (18× on a 20× market, 9× on 10×, 22× on 25×, 27× on 30×, 45× on 50×). The factory lists it on chain.

Intent address (deposit address) — the address on Avalanche that Lighter issues for a wallet (createIntentAddress): a plain USDC transfer to it credits that wallet's Lighter account within minutes, minimum 5 USDC. It belongs to Lighter's bridge operator. The keeper asks for it again before every deposit and refuses an answer that differs from the last until it has been seen three times in a row.

Kill switch — setHedgeFunder(address(0)), called by a vault's owner: from that block no dollar can leave the vault for the venue, whoever asks. It does not reach money already on Lighter.

Leverage (the multiple) — how many times harder than its market a tracker moves. Chosen by the creator at launch, from 1× up to LTFactory.maxLeverageFor(symbol): the lower of the product ceiling (MAX_LEVERAGE = 5) and the holdable cap for the market. 5× on every market listed today.

Leveraged tracker (LT) — an ERC-20 following a real market at a fixed multiple, e.g. NVDAx5. Backed by a perpetual position on Lighter, held in the protocol's hedge wallet's account; valued at NAV, mintable and redeemable at NAV.

Lighter — the perpetuals exchange where every tracker's position is held: a zk-rollup on Ethereum with a verifiable matching engine and an escape hatch on Ethereum. Its markets are quoted and margined in USDC, a Standard account pays no trading fees, funding settles every hour, and its stock, index and commodity markets trade around the clock. It takes USDC deposits straight from Avalanche and pays fast withdrawals on Arbitrum.

Liquidation threshold — the point at which the venue closes a position for the account. On Lighter, the account's equity falling below its maintenance margin: at 5× on a 20× market such as Nvidia, about 17.5% against a long or 16.5% against a short, from entry, for a tracker alone in the account. Lighter adds a 1% liquidation fee. Because every tracker of a hedge wallet shares one account, the account's other positions move the real threshold.

Locked by absence — liquidity that cannot be withdrawn because the holding contract has no function that could, rather than because a timelock currently refuses.

Maintenance margin — the equity Lighter requires an account to keep: the position's notional times the market's maintenance margin fraction (3% on its 20× markets, 6% on its 10× markets, 2.4% on gold and silver, about 2% on QQQ, 1.2% on SPY, read on 2026-09-22). Below it, the account can be liquidated.

marketId — the Lighter market a tracker hedges on, as the factory stores it on chain: Lighter's integer market id. Nvidia is 110. LTFactory.underlying(symbol) returns (marketId, maxLeverage, listed) and LTFactory.venueRouting(lt) returns (marketId, trader).

MIGRATION_DUST — 1e12, the tolerance for coin left behind by a bond. Anything larger reverts the whole migration.

NAV — a tracker's net asset value: its backing — its share of the hedge account's equity, plus the USDC in its vault, plus any USDC on its way between the two — divided by its supply. Signed by the keeper and posted on chain, readable by anyone; the contracts refuse to mint or redeem on a NAV older than 15 minutes.

Notional — a position's exposure: size times mark. Five times the margin behind it, at 5×.

No-parking rule — the hedge wallet is a corridor, not a place where money rests. USDC it receives from a vault is sent on to Lighter's deposit address; dollars a fast withdrawal pays it on Arbitrum are burned towards Avalanche with the vault as recipient. While a leg is open the keeper books the dollars in transit, so NAV counts each one once.

Seed buy — the creator's opening purchase of their own coin, made inside the launch transaction. At least minSeedUsdc (1 USDC), paid in USDC. The only buy the token allows in the launch block.

Single-sided position — a Uniswap V3 position holding only one of the two tokens, valid because the pool is initialised exactly at the range's bound. It is why launching needs no capital.

sqrtPriceX96 — Uniswap V3's price representation, the square root of the price in smallest units, scaled by 2^96. Never square one: (2^160)^2 overflows a uint256.

Tracker pool — a tracker's own USDC market on Uniswap V3 (0.05% tier), with 70% of its depth in a band of ±200 ticks around NAV and the rest full-range underneath.

Transit books — the keeper's per-tracker record of dollars between the vault and the venue: sent to the hedge wallet but not yet transferred to Lighter, transferred but not yet credited, withdrawn but not yet paid on Arbitrum, burned on Arbitrum but not yet minted into the vault. Kept on disk across restarts so NAV counts every dollar exactly once; if they cannot be reconciled with the chains and the venue, no NAV is posted.

USDC (on Avalanche) — Circle's native dollar: the quote asset of every coin and the settlement asset on Lighter. The token lives at 0xB97EF9Ef8734C71904D8002F8b6Bc66Dd9c48a6E with 6 decimals, which is why every price conversion here carries a 10^(18 − dq) term. It is not USDC.e (0xA7D7…C664), the older bridged token, which nothing here accepts. USDC has a blocklist: an address on it can neither send nor receive USDC.

Virtual ledger — the keeper's per-tracker accounting inside the hedge wallet's one Lighter account: each tracker's cash and signed size per market, from which its equity is its cash plus size times mark; funding is attributed pro rata by size. The sum of the trackers' equities is checked against the account's equity every pass; a difference the ledger cannot explain (a liquidation, a manual trade) stops NAV for every tracker of the wallet until repaired by hand.

Volatility decay — the ground a constant-leverage product loses on a round trip in the underlying. Structural, not a defect.