Lithium Finance The First DeFi Pricing Oracle For Illiquid Private Assets — Whitelist Details
Lithium Finance is the first decentralized pricing oracle for illiquid private assets — leveraging collective intelligence to price the unpriced. The protocol aims to bring accurate pricing data for illiquid, non-public assets to DeFi
Why Lithium Finance?
The traditional financial sector can be improved enormously by the innovative tools of DeFi and cryptocurrency. These changes are happening now and fast. As the DeFi space and the traditional finance world converge, the needs and expectations of having real-world assets in the DeFi space are also growing simultaneously. Pricing these assets in a decentralized manner is an inevitable process of bridging the two worlds together.
Decentralization can remove the “trusted” intermediaries of the financial world, creating more efficiency, transparency, and better pricing for everyone. This is also an essential part of further integration of DeFi and traditional finance in the long run so that communities can offer their financial services without relying on banks, brokerage, valuation experts, and other intermediaries. Although existing oracles can bring pricing information to DeFi, most of these protocols cannot provide the information promptly. None of them are specialized in private and hard-to-value assets.
With all that in mind, Lithium Finance — a new type of pricing oracle that uses collective intelligence to price the unpriced — could be the key to open the door and bring real-world assets into the DeFi space.
How it works.
Lithium Finance is an on-chain pricing oracle that fills one of the most important missing links between real-world asset investment and DeFi. The protocol leverages collective intelligence to price real-world assets, especially assets that are hard to value, such as pre-IPO stocks, private equity, and other illiquid assets.
Lithium Finance is based on a Determinant-based Mutual Information (DMI) mechanism, in which participants are asked subjective multiple-choice questions to find a dominant truth. The answer provides price discovery for illiquid assets.
In the case of Lithium, the mechanism is fueled by reward and punishment of participants through staking the protocol’s native Lithium tokens (LITH). Staking ensures users who provide irrelevant and malicious answers are punished, while users who can generate insights are rewarded with LITH tokens. Through the collection of multiple users’ opinions, a “wisdom of the crowd” price, based on each user’s reputational stake, is produced.
Traditionally the only way to price a real-world asset is to hire expert appraisers who have been trained and hold credentials. The process is slow and expensive and therefore limited to few assets. Lithium’s Co-Founder Steve Derezinski said “By trying to bring highly accurate pricing of illiquid, non-public assets, from pre-IPO stocks and private equity to decentralized finance (DeFi), the protocol attempts to leverage collective decentralized intelligence,”. The initiative is targeted toward existing DeFi protocols, traders and investment analysts.
Lithium could be an excellent choice of oracle in many scenarios, from pricing a share of unicorn companies, to real estate, to a fine piece of a century-old antique.
Lithium, Linear and Convergence
You may have heard of Linear Finance and Convergence before. Linear finance is the largest synthetic asset exchange by trading volume. And Convergence… you remember that super successful 80x launch?! I do! This strategic partnership will set a solid foundation for Convergence to bring real assets into the DeFi space. Convergence is not only partnering with Lithium but Lithium will be the first Pre-IDO Asset on Convergence.
What does Pre-IDO mean? It is the token offering that happens before the traditional Initial DEX Offering takes place. Participating investors will gain exposure to VC-style private investment on crypto projects. In Lithium’s case, investors will be able to invest in Lithium and buy LITH tokens at a VC-level rate, which offers a much more significant first-mover advantage over those who will enter in the future IDO. Lithium’s pre-IDO will be held on June 24, 2021, and the whitelist will be opened on June 17, 2021. The offering will be available on Convergence Offering or ConvO. Eligible CONV token holders will be able to have “premium access” to the Lithium pre-IDO.
Conclusion
Steve Derezinski, co-Founder of Lithium Finance said “Bringing real-world assets into the DeFi space is the final frontier of crypto. However, this can’t be realized without the right pricing oracle, and the market still hasn’t seen one that’s able to price illiquid real-world assets effectively.”.
Lithium Finance is uniquely positioned to capitalize on a unique point of convergence between blockchain, distributed wisdom and the economic and technical engine to bring these forces together to pull the worlds of traditional finance and DeFi together, enabling tremendous growth and innovation at the interface. Crowdsourcing has been a powerful tool for creating datasets that already exist but are distributed throughout the web — Lithium Finance takes this into DeFi by gathering collective intelligence from people who previously wouldn’t give their expertise, but now have an incentive, to the benefit of the whole market.
Lithium’s testnet is target for Q3 and Mainnet for Q4. Keep your eye on Lithium. They very well could be a household name by the end of the year, if not sooner.
Till the next Medium, you’re on your own. Laterrrrrrr.
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