What is Hotstuff L1?
At its core, Hotstuff L1 is an opinionated state machine: an on-chain orderbook powering spot, perpetuals, and eventually options across crypto and traditional instruments including FX, commodities, and equities indices. Like HyperLiquid or Lighter, it is vertically integrated for trading performance. But that is only the first layer. The deeper thesis: DeFi will become the default venue for all finance, and the scarce resource will not be blockspace, but distribution and access.The Problem
Onboarding today is broken.| Challenge | Impact |
|---|---|
| Fragmented KYC | Users fight through verification across multiple venues. |
| Fiat Friction | Converting local fiat to crypto remains the highest friction touchpoint. |
| Siloed Liquidity | Liquidity is stranded in single-venue silos. |
| Limited Vaults | Retail vaults cannot behave like real multi-venue market makers. |
| Passive Validators | Validators earn inflation rewards with no incentive for service quality. |
The Solution
Hotstuff L1 tackles both access and liquidity at the protocol level.Validators as Financial Access Points
DracoBFT treats validators not just as block producers, but as financial access points. Validators opt in as permissioned service providers, integrating with on/off-ramps, banking partners, FX platforms, and card programs. Using zkTLS and auxiliary proof loops, validators prove to the chain that users have verified accounts, balances, and status at providers like Bridge, Avenia, and Brale without leaking private keys or API credentials. The consensus layer does not just finalize blocks; it finalizes onboarding and money movement.Multi-Venue Liquidity via HLV
The Hotstuff Liquidity Vault (HLV) runs in hedge mode with per-account netting:- Quote both sides of the book across all markets.
- Margin only on net delta plus dedicated liquidator sleeve.
- Achieve ~50% capital efficiency improvement versus one-way vaults.
Key Differentiators
| Feature | Description |
|---|---|
| Sub-second Finality | DracoBFT two-chain consensus with 2-round finalization. |
| Gasless Trading | Zero gas for end users, funded by MEV capture and service fees. |
| Validator Services | Validators earn from fiat rails, payments, and liquidity provision. |
| Multi-Venue MM | HLV quotes across venues with ~50% better capital efficiency. |
| Trustless Proofs | zkTLS for off-chain APIs, ZK execution proofs for cross-chain state. |
| O(m) State Commitment | Change-Log Hash replaces O(n log n) Merkle Patricia Tries. |
Validator Economics
Gas on Hotstuff L1 is zero for end users. Validators monetize flows and access:| Revenue Stream | Description |
|---|---|
| Fiat Rails | Compliant fiat and payment rails. |
| On/Off-Ramps | Remittance corridors, card and account infrastructure. |
| Liquidity | Multi-venue liquidity and strategy vaults. |
| Consensus | Block production rewards. |