Litecoin Enters Smart Contract Era with LitVM Zero-Knowledge Layer-2 Launch

Litecoin has introduced LitVM, a groundbreaking zero-knowledge Layer-2 network designed to enable smart contracts and cross-chain functionality, marking a pivotal shift toward DeFi and Web3.

Litecoin has officially entered the smart contract and DeFi arena with the launch of LitVM, a cutting-edge zero-knowledge Layer-2 network revealed on May 31, 2025. Developed by Lunar Digital Assets and supported by the Litecoin Foundation, LitVM signifies Litecoin’s bold step toward Web3 integration and decentralized finance (DeFi) innovation. Built using BitcoinOS and Polygon’s Chain Development Kit (CDK), the network is tailored to provide EVM compatibility and seamless cross-chain liquidity.

The project introduces zero-knowledge rollups to Litecoin’s UTXO-based architecture, aiming to bring advanced smart contract capabilities to a blockchain historically known for speed and security. With prominent backing from Litecoin’s creator Charlie Lee and DeFi builder Edan Yago, LitVM is poised to broaden the asset’s relevance in the evolving crypto landscape.

Charlie Lee emphasized that while Litecoin has always prioritized security and reliability since its inception in 2011, the addition of LitVM preserves those values while enabling it to compete in the modern smart contract ecosystem. EVM compatibility is a key feature, as it allows developers from Ethereum and other EVM-based networks to easily build on Litecoin via the new Layer-2 solution.

LitVM’s cross-chain features and smart contract support mark a significant technical evolution for Litecoin, enabling it to attract a broader developer base and unlock new decentralized applications (dApps) within its ecosystem. The launch of LitVM also sets a notable precedent—it is the first zero-knowledge Layer-2 solution built atop a UTXO-based chain, laying a path that may inform future research into similar capabilities for Bitcoin itself.

At the time of the announcement, Litecoin (LTC) was trading at $86.81 with a market capitalization of $6.59 billion. The 24-hour trading volume stood at $578.65 million, marking a 9.35% decline. Price movement over 24 hours and the last 90 days indicated drops of -3.46% and -28.78%, respectively, according to CoinMarketCap.

Analysts from Coincu’s research division note that LitVM may elevate Litecoin’s competitiveness within the Layer-2 space and serve as a catalyst for further decentralized innovation. With historical market data showing that EVM-based development often drives increased adoption, LitVM could soon become a vital piece of Litecoin’s long-term evolution.

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