Litecoin Enters Smart Contract Era With New Layer-2 Chain

Lunar Digital Assets has launched LitVM, the first zero-knowledge Layer-2 for Litecoin LTC/USD, signaling a shift toward on-chain programmability and real-world asset integration for the decade-old cryptocurrency.

What Happened: The Layer-2 was announced at the Litecoin Summit and is built using BitcoinOS and Polygon CDK, with endorsement from the Litecoin Foundation.

Litecoin, long known as a lightweight peer-to-peer alternative to Bitcoin BTC/USD, may be entering a new development phase.

Lunar Digital Assets announced the launch of LitVM, a trustless, EVM-compatible Layer-2 network at the Litecoin Summit in Las Vegas.

The zero-knowledge rollup is designed to bring smart contract functionality and cross-chain liquidity to Litecoin for the first time.

Built with BitcoinOS and Polygon's MATIC/USD Chain Development Kit (CDK), LitVM introduces the first ZK rollup infrastructure to the Litecoin ecosystem.

The rollout marks a notable evolution for Litecoin, which has traditionally focused on speed and simplicity in everyday transactions rather than complex programmable applications.

“Since creating Litecoin in 2011, our focus has been security and reliability,” said Litecoin creator Charlie Lee. “This Layer 2 pushes Litecoin into the smart contract era while preserving those principles.”

LitVM aims to bridge Litecoin into the wider DeFi and Web3 world, allowing for tokenized real-world assets (RWAs), stablecoin payment rails, and culture-focused on-chain assets such as Runes and Lordinals.

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What’s Next: Developers will now have the tools to deploy decentralized applications using native Litecoin assets in a secure and composable manner.

Lunar Digital Assets CEO Roc Zacharias noted the increasing traction of Layer 2 solutions across other chains, citing over $12 billion in combined TVL across Bitcoin and Ethereum ETH/USD rollups.

"Litecoin remains one of the most used cryptocurrencies globally," Zacharias said. "LitVM is designed to meet that demand with infrastructure that enables real-world utility and programmable liquidity."

LitVM's architecture provides access to AggLayer's cross-chain liquidity and includes support for tokenized assets with built-in time locks, trustless bridging, and DeFi-ready smart contract capabilities.

The Litecoin Foundation has endorsed the initiative, stating that LitVM addresses long-standing developer demand for programmable functionality.

By enabling secure movement of native LTC and related assets to an L2 environment, LitVM could open the door for greater experimentation on Litecoin's base layer while reducing risk.

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