wLLP

what is wLLP

wLLP is Wick's liquid wrapper for the Lighter Liquidity Pool (LLP), Lighter's protocol-level insurance fund and liquidation backstop.

Deposit USDC, earn auto-compounded insurance fund yield, and keep the position liquid across DeFi.

LLP deposits are not transferable. wLLP wraps the insurance-fund position into a token you can hold, pair, use as collateral, or move across markets while the USDC keeps earning inside Lighter.

the LLP insurance fund

The LLP (Lighter Liquidity Pool) is the backbone of Lighter's risk engine. It is the counterparty of last resort across all markets: absorbing liquidated positions, collecting liquidation fees, and backstopping ADL events.

LLP collateral is allocated across strategy buckets such as crypto perpetuals, FX, and real-world assets. This is strategy isolation: losses in one bucket are capped to that bucket's allocation and do not spill directly into the others.

When a strategy's allocated collateral is fully depleted, that strategy enters auto-deleveraging (ADL). The bucket design lets the insurance fund support multiple market groups without treating every risk as one shared LLP bucket.

how LLP earns

LLP earns because it supplies capital to Lighter's liquidation system. When trader account health deteriorates, Lighter moves through a liquidation waterfall. LLP collects fees when accounts are partially liquidated and can take over full-liquidation positions directly.

During partial liquidations, LLP can receive up to a 1% liquidation fee when unhealthy accounts are reduced. During full liquidations, LLP can take over positions directly and earn if those positions close favorably. More volume, leverage, and market activity can create more events for the insurance fund to serve.

how wLLP compounds

wLLP packages the LLP position into one liquid token. Instead of manually managing an insurance-fund deposit, users hold wLLP while yield accrues into the token's USDC redemption value.

From deposit to exit:

1. deposit USDC into the LLP strategy when deposit capacity is available
2. receive wLLP as a liquid tokenized claim on the position
3. earn automatically — fees and takeovers compound into redemption value
4. exit when needed — redeem for USDC or swap wLLP on supported markets

The important ratio is wLLP to USDC, not wLLP to LLP. Users think in USDC terms: deposit USDC, hold wLLP, redeem for USDC plus any auto-compounded yield.

Compounded returns track Lighter's live LLP pool: liquidation fees, position takeovers, and other insurance-fund work performed with the pooled USDC.

Returns are variable: individual months can be negative when losses outweigh liquidation fees and profitable takeovers.

wLLP capacity

Anyone can deposit USDC into wLLP when the insurance fund has open capacity. You do not need to hold wLIT or sWICK to participate.

What sets the ceiling is wLIT supply: for every 1 LIT staked through wLIT, the system unlocks up to 10 USDC of insurance-fund deposit capacity. More wLIT in circulation means more total room for wLLP.

Every depositor gets a base allowance while capacity is open; holding sWICK raises your personal cap. The cap scales with sWICK holdings and whatever wLLP capacity remains open.

The same staked-LIT position that sets wLLP capacity also supports lower fees for sWICK holders and Wick arbitrage.

how wLLP fits into Wick

wLLP is Wick's USDC yield leg: a stable, composable asset that sits beside wLIT and exchange products without adding directional token exposure.

wLLP generates revenue for Wick in three places:

• wAMM pools. wLLP paired against USDC and stables on wAMM generates dynamic swap fees on exchange activity
• Protocol fee. Wick takes 10% on wLLP reward compounds, allocated to sWICK buybacks
• External use. wLLP used as portable collateral on Lighter EVM lending markets, other networks, exchanges, and third-party venues keeps accruing LLP yield and generates additional Wick revenue

Deeper Wick pools and more wLLP volume raise exchange fees and grow the underlying LLP position Wick operates. The 10% compound fee and revenue from external composability route to sWICK buybacks. Holders never need to exit the token to put it to work.