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I joined Lighter in July and didn’t take it serious. In August I realized the potential and locked in a little more. I tried some strategies over the span of 4 weeks and documented which factors determine the amount of points I get.
The following is something that I once again wrote for a friend, so i’ll just change it up slightly to make it fit here as an article independently. It’s once again not super well written.
Though, even if i were to take writing serious, i couldn’t do it well. I don’t think the strategies for maximizing points are a big secret, but If you feel a little lost right now and are new, just know growth is exploding and points are harder to get each week.
There are 2 ways:
Nr. 1: trading low Open Interest/ Volume coins is by far the biggest factor/contributor to your points. Simply sort coins on Lighter for lowest OI or Volume, or the average lowest of both combined and crank the leverage to the max. Its a boost of 300–800% compared to trading BTC/ETH/SOL etc.
Positive PnL and sharpe ratio also gives you a 20–50% boost in general, but like the pareto principle says, focus on the 80%, and ignore the 20%.
Knowing that alt coins yield the most points, we will focus solely on that. We employ a delta neutral strategy to farm volume across 2 exchanges. The exchange of choice i heavily recommend is MEXC. For 2 reasons:
It has enough liquidity on most coins for you to not get messed up on by slippage
It also has zero trading fees on around ~70% of offered Lighter alt pairs currently. (Alternative possible Dexs you can use instead of MEXC include Paradex, Variational & Vest exchange, as they offer either 0 or extremely low fees. And you can collect points on those as well. But I haven’t tested the slippage/liquidity on either so I can’t vouch for them, nor the selection of tickers they have available. But I will keep using MEXC for my example)
This way you can farm volume without paying trading fees. Just market buy in and out of both positions at the same time. It will not be working picture perfect every single time, esp the more capital you use it gets difficult to get out of low vol/OI coins, but this is one of the most capital efficient ways to farm Lighter.
While Volume matters, hold time matters as well. After all, wash trading gets punished.
So i experimented around with both volume & hold time over a span of 4 weeks in August.
And what I on my own, as well as consulting with others regularly noticed were 2 things.
The formula changes each week without fail
Long hold time gets rewarded and is similarly important
Sometimes volume gets rewarded more, sometimes hold time more. It changes, but the ratio would probably be 2:1 or 3:1
Week 1: 2M volume on alts, 25min hold time, 59 points
W2: 3M volume on alts, 13min hold time, 48 points
W3: 1M volume on alts, 6H hold time, 38 points
W4: 2M Vol on alts, 1h hold time, 30 points.
As you can see my points decreased Week over Week despite staying roughly consistent. But they decreased more or less proportionally to how much the plattform grew Week over week. Ultimately I came to the conclusion that I got diluted by the amount of people being onboarded every week. And not because once strategy was much better than the last.
Regardless, based on my experience and my gut feeling, I would say that 30min — 1h hold time is roughly the sweet spot. If you keep it too short, you’ll get punished on weeks where holding time is rewarded disproportional. And the same vice versa. If you hold for too long, you get punished on weeks where volume is rewarded disproportional. Market open both legs at the same time, hold for 30min — 1 hour, close both, pick a new ticker and redo the scheme. Trading multiple tickers might yield a bonus. I always traded tickers that had 3x, 5x 10x and 15x leverage available. Not just the ones with 15x for the highest Volume
Lastly, if you are good at reading charts, try to be profitable on your lighter account when executing these delta neutral trades as it might give you a boost. I suck at it spectacularly, so I ended up in the red every single week. I think I only had oneprofitable week on lighter since joining in July.
Now, i mentioned there are 2 ways of farming good points.
The second is liquidations.
This is the method i’m currently using since shifting my focus towards Extended. I have a lot of tiny positions open with only 5–6$ margin on low OI/Volume pairs, and newly listed pairs on lighter. My goal is to get intentionally liquidated. Liquidations yield a lot of points. However, the points you earn decrease with every additional liquidation. So 2–4 liquidations per week are the sweet spot. Although, its not like you can control liquidations so it’s good to have 6–10 positions open. Simply holding those positions throughout the week will also yield you some points.
The tickers you choose are again, the ones with the tiniest volume and open interest. But additionally it would be wise to chose tickers that have trading fees on mexc, since you can’t use them for your Delta Neutral Strategy (DNS) anyway. In the end, you will get 1–3 points per liquidation. But getting liquidated for 2–3$ and in return getting 1–3 points worth 40–60$ each is very +EV.
Lastly, whenever there is a new ticker, trade them. If they list a new pair, it will give you a higher multiplier and bonus points. Also, trading the token $prove which is also a low volume coin may give you an airdrop upon introduction of spot markets on Lighter. (There was a specific week in which they encouraged users to trade the Prove token, and mentioned that those who do, will be airdropped some tokens once spot is live. However, i think there is a chance that this goes beyond just the 1 week where they advertised it, although it’s not clear or confirmed)
Public user pools, (not the LLP) will earn points going forward too. Look into deploying maybe 5–10% of your total Lighter allocation into each if you can. New products in general will give bonus points to some degree. But your own trading will always be rewarded the most.
Unfortunately I don’t have a ref code to shill here. Will get 3 new ones on tuesday. If you liked reading this, read my extended article from earlier today
cheers
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