Architecture

The protocol is built from a small set of components that form one continuous loop: trading activity in the LEV7 pool funds the vault, the vault runs a leveraged strategy, and rewards flow back to eligible token holders through the points program.

The token and the fee hook

LEV7 trades in a Uniswap v4 pool fitted with a custom hook — a contract that runs before every trade. On each purchase, the hook:

• collects a 3% fee in the paired currency and uses it to buy USDG;
• deposits that USDG into the vault and forwards the resulting vault shares to the distributor contract, which funds the points program's daily rewards;
• records referral attribution and emits the verification events the points program relies on.

LEV7 is a governance token, not a claim on the vault. Holding LEV7 does not give direct access to the portfolio, and LEV7 does not offer or sell vault shares — vault share tokens reach holders only as rewards under the points program.

The vault: LEV7 Dollar (LV7D)

There is one vault and one vault token for the entire portfolio. The vault follows the ERC-7540 asynchronous vault standard, with a withdrawal queue.

• Minting. Shares are issued only when the hook deposits USDG. LEV7 does not sell vault shares — they are distributed exclusively as rewards under the points program.
• Strategy. On-chain, the vault does exactly one thing with its capital: it sends USDG to a designated deposit address on Lighter, where the trading engine puts it to work.
• Valuation. A programmatic oracle reports the vault's fair share value: the value of the Lighter account plus the vault's spot USDG balance. The net asset value is published on-chain daily.
• Redemptions. Exits are asynchronous. Holders submit shares to an exit queue; if the vault holds open positions, it partially winds them down and withdraws from Lighter to fund the queue; redeemed shares are then burned.

The trading engine

The vault's capital is managed by an automated agent operating through a tightly restricted wallet:

• The agent's wallet is bound by policy controls: it can only trade the vault's designated account on Lighter and can only withdraw funds to a single pre-approved address. Wallet logs and policy enforcement are independently verifiable through the wallet infrastructure provider.
• The engine targets 7X leverage across the portfolio, settled daily.
• The portfolio's weights are set by a weekly governance vote — see staking and governance below.

Staking and governance

LEV7 holders who meet the eligibility threshold can stake their tokens and vote on the portfolio weights each week.

• Longer locks, more power. Voting power scales with how long tokens are locked, up to a 10X multiplier at the maximum period.
• Delegation. Holders can delegate their voting power to another address.
• Sealed voting. Votes are recorded on-chain as salted hashes, so choices cannot be read before the vote closes.
• Entry. Stakes are accepted either instantly, with a signed eligibility approval issued through the LEV7 app, or asynchronously, with deposits batch-approved at the next daily settlement.
• Staking does not issue a separate receipt token, and staked tokens keep their verified status.

Referrals

Verified users can create a referral code to share with others. Referrals are tracked on-chain, and both sides benefit:

• Referrers earn 7% of each referred user's base points.
• Referred users receive a 7% point bonus.

A referral stays active only while the referrer remains eligible for rewards. The full mechanics are covered in Points.

Operations

The protocol runs on a daily and weekly cadence, with results published on-chain:

• Daily — the vault's net asset value is published on-chain, deposits and withdrawals are settled, points are calculated, and the day's rewards are delivered to the distributor.
• Weekly — the governance vote closes, the winning portfolio weights take effect, and the strategy's performance is measured against a benchmark for the performance bonus.

The points program is verifiable: every calculation is derived from on-chain data, and each epoch's results are published so holders can check their own rewards — see Points for the full calculation.