Lighter's Prediction Market Mechanism Exposed, Plans to Adopt HIP-3 Whitelist Model

The decentralized order book exchange platform Lighter has a commit in its codebase titled "Binary options support," indicating that its ZK Circuits may have begun to support binary outcome markets. Each market has a settlement cap, and share prices will trade between 0 and that cap, ultimately settling at either 0 or the cap based on the outcome. This mechanism uses full collateral in USDC and does not support leveraged trading, avoiding liquidation or margin call risks. There are two key points in Lighter's design: First, the Circuits support continuous market settlement, allowing market outcomes to settle at any value within the range of 0 to the cap, supporting contracts based on actual measurement data. Second, Lighter may introduce a "market operator" model that allows whitelisted operators to create, manage, and be responsible for market settlements, similar to the deployment model of HIP-3. This means that Lighter's prediction markets could expand the types of markets through authorized operators rather than being entirely created by the platform itself.