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Litecoin's <a href="https://yellow.com/asset/ltc">LTC</a> first EVM-compatible Layer 2 LitVM is preparing to launch its testnet in the first quarter of 2026.
This comes as Litecoin <a href="https://themarketperiodical.com/2025/11/18/litecoin-hits-360m-transactions-as-price-stalls-unexpectedly/">surpassed</a> 360 million lifetime transactions in November, with 60 million processed in 2025 alone.
Lunar Digital Assets, the development studio behind LitVM, declared 2025 the year of "Litecoin Meta" following institutional adoption and network growth.
The announcement follows Canary Capital's launch of the first U.S. spot Litecoin ETF in late October.
Litecoin ETF activity before had ground to a halt, <a href="https://yellow.com/news/litecoin-etf-records-zero-inflows-over-five-trading-days-as-investor-interest-flatlines">recording zero net inflows for five consecutive trading days</a> through November 25, though.
LitVM was first <a href="https://www.bitget.com/en-CA/news/detail/12560604789175">unveiled</a> at the Litecoin Summit in Las Vegas in May 2025.
Read also: <a href="https://yellow.com/news/xrp-drops-below-dollar2-as-whales-dump-dollar783m-despite-dollar1b-etf-inflows">XRP Drops Below $2 as Whales Dump $783M Despite $1B ETF Inflows</a>
<h2 id="what-happened">What Happened</h2>
LitVM will enable EVM-compatible smart contracts and zero-knowledge rollups on Litecoin.
The Layer 2 is built using <a href="https://yellow.com/asset/pol">Polygon</a>'s Chain Development Kit and BitcoinOS technology.
"Looking ahead to 2026, LitVM is laser-focused on delivering key milestones: launching our Testnet, closing our raise, opening the network to the public alongside our Token Generation Event, and spinning up our Mainnet activation," said Aztec Amaya, Chief Strategy Officer at Lunar Digital Assets.
The platform aims to center its ecosystem around Litecoin-native yield opportunities, LTC-backed real-world assets, and AI integrations.
Litecoin processed over 60 million transactions in 2025, representing more than 16% of its total historical volume since launching in October 2011.
The network reached new hashrate highs in 2025, reinforcing its proof-of-work security.
Corporate adoption increased with Luxxfolio Holdings holding over 20,000 LTC and MEI Pharma allocating $100 million to a Litecoin treasury.
Canary Capital's spot Litecoin ETF began trading on Nasdaq under ticker LTCC on October 28.
The Litecoin Foundation formally endorsed the LitVM initiative following community requests for programmable functionality.
<h2 id="why-it-matters">Why It Matters</h2>
LitVM represents Litecoin's first major push into decentralized finance and Web3 applications.
The Layer 2 will allow developers to deploy smart contracts while maintaining Litecoin's base layer security.
"2025 proved that the market is ready for a more capable Litecoin," said Charlie Lee, Creator of Litecoin.
"The growth of the network, institutional commitments, and the community's appetite for programmability signal that Litecoin's next evolution is inevitable."
The testnet launch will enable developers to experiment with zero-knowledge applications and scalable rollup architectures.
LitVM provides cross-chain interoperability through Polygon's AggLayer, connecting to <a href="https://yellow.com/asset/btc">Bitcoin</a>, <a href="https://yellow.com/asset/eth">Ethereum</a>, and other blockchains.
The platform aims to transform Litecoin from a payment network into a programmable Web3 ecosystem.
The upcoming testnet will mark the beginning of developer onboarding for the Litecoin Layer 2 ecosystem.
Read next: <a href="https://yellow.com/news/gold-nears-all-time-high-at-dollar4305-while-bitcoin-drops-30-from-october-peak">Gold Nears All-Time High at $4,305 While Bitcoin Drops 30% From October Peak</a>

LitVM to Open Testnet in Q1 2026 as Litecoin Transaction Volume Surges

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