On Wednesday, July 21st, we had the pleasure to welcome to our Telegram chat:
David Lighton, The Co-founder of Lithium Finance.
We asked him questions about the development of Lithium Finance.
Q~ Thanks for joining us today. Please start off by introducing yourself to the Blockchain Space community and your role in the team ?
A~ Hi everyone, I’m David, the co-founder of Lithium — and an entrepreneur passionate about inclusive financial innovation. My team and I feel 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.
Before Lithium, I was the Founder and CEO of SendFriend, a FinTech startup using the blockchain to create faster, less expensive, and more inclusive international money transfers for immigrants in the US. Prior to founding SendFriend, I served as Special Assistant on the Haiti Desk in the World Bank following the devastating earthquake of 2010, and co-authored the Haiti National Financial Inclusion Strategy, a Central Bank-sponsored initiative to increase consumer account penetration from 25% to 50% of adults. I hold an MBA from MIT — Sloan School of Management and an M.A. and B.A. with honors from Johns Hopkins University.
Q~ Tell us what Lithium Finance is, how it works, and what kind of value the protocol adds to the ever expanding DeFi ecosystem ?
A~ Lithium Finance is the first collective-intelligence pricing oracle to give precise and timely pricing on private, illiquid assets. It’s 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.
Lithium Finance is uniquely positioned to capitalize on a distinctive point of convergence between blockchain, distributed wisdom and the economic & technical engine needed to pull the worlds of traditional finance and DeFi together, enabling tremendous growth and innovation at the interface.
The traditional financial sector can be improved enormously through the tools of DeFi and cryptocurrency. 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.
Q~ Can you share with us detailed information on the $LITH tokenomics and it’s usecases ?
A~ Lithium Finance’s native token, $LITH will be used as a reward mechanism and as a staking token for questions and answers. It is essentially the fuel that powers the Lithium ecosystem. During the process of posing a question and answering, each individual will stake a certain amount as either bounty (when asking a question) or confidence (when answering). This combination of staking creates stronger signals towards the best information. Bounty offers from Wisdom Seekers will incentivize Wisdom Node answers. The more valuable information is to someone, the more they are willing to pay for an answer. With many people wanting access to the same information, the bounty can become substantial. It is also a way for Wisdom Nodes to build their reputation and further increase their reward potential for correct information. When each Wisdom Node provides an answer to the question, they will stake a certain amount of LITH tokens to signal their confidence. This, together with their reputation within the sector of answers, increases their influence and also potential reward of the bounty plus other incorrect stakers. Lastly, the token facilitates rewards for Wisdom Nodes for correct answers.
Once the Wisdom Nodes’ answers are known, the bounties of $LITH and the Wisdom Node stakes are pooled and distributed according to how close their answers come to the ground truth. The $LITH token is one that forms the bedrock of a robust use-case. Lithium Finance’s cutting-edge pricing oracle will revolutionize the world of finance by making accurate pricing for illiquid assets accessible to one and all. The LITH token powers this fascinating movement. Members can hold Lithium tokens and become part owners in the protocol, and get a high reputation by doing so. Members can realistically make meaningful profits on the platform as the reputation multiplied by the value of staking is the value you can take away from the platform. $LITH is a deflationary currency, so early investors in the token potentially stand to earn huge rewards!
For the usecase:
Lithium could be an excellent choice of oracle in many scenarios, from pricing a share of unicorn companies to a fine piece of a century-old antique.
- Unicorn companies: Consider a potential investor in Stripe, SpaceX, or another highly valued private company, who may wonder just what would be a fair price per share. Data on the company’s earnings are private, proprietary, and carefully guarded. Even if we had access, revenue or EBITDA numbers would only be a small piece of the overall valuation puzzle. Because allocations in companies like these can be rare, sellers use the psychology of fear of missing out and other tools to create the perception of scarcity and use that to drive the price higher. Some of the brokers may even make matters worse. In some cases, they could covet their information and are reluctant to share without the proper incentives, leaving many accredited and other retail investors in the dark on the question of, “What would be a fair price for this stock?” Lithium leverages proprietary algorithms to poll a community of experts who are incentivized to win LITH if their answers are determined to be high-quality and to lose them if determined to be low-quality. The imperfect information in the market relished by investment banking and brokerage firms is unfair to investors like you; we have a new way.
- Antiques: Have you ever seen the antiques roadshow? We wouldn’t want to put one of our favorite television shows out of business, but… We can create a community to price the antique watch you saw on eBay and liked. The more data our protocol collects on any given asset, the more accurately we can price others. Collectible items and antiques represent another attractive market segment for our pricing oracle.
It has a fixed supply of 10 billion tokens.
Q~ Did you raise funds so far? If so, how did you handle them? Are you planning to do any future raises ?
A~ The past few months have been an exciting journey for the team at Lithium Finance. We are truly grateful for the enormous support of all our investors. They have been backing Lithium not just financially but also in many other aspects. Our team has boarded several additional investors and raised an extra $2.6 million from them to ramp up our product rollout. That’s on top of the $5 million that we raised during the seed round co-led by Pantera and Hashed. Also We have onboarded FBG Capital, Coin98 Ventures, Shima Capital, PetRock Capital, Vessel Capital, Soul Capital, Gate.io, DuckDAO, AU21 Capital, ZBS Capital, Divergence Ventures, Autonomy Capital, Astronaut Capital, Ellipti, GAINS Associates, and more. The $7.6 million we have raised in capital so far has been essential to our rapid growth in these past few months. As for our future raises, we will plan on raising more capital as per what our growth needs dictate post our IDO, as we are in a very exciting phase as a company.
Xiaolin : Great, can you share some more details on your upcoming IDO?
David Lighton : We’re excited about this, as you may know, we just made our announcement!
Of course, we had released an IDO announcement this Monday. We are proud to announce the launch of our IDO on Polkastarter on August 5. This came after the successful launch of our pre-IDO on Convergence earlier in June. For more IDO sales details, please visit our latest medium article here:
Lithium Finance IDO: Launching on Polkastarter on August 5th
Lithium Finance is proud to announce the launch of our IDO on Polkastarter on August 5. This came after the successful launch of our…
Q~ Can you give us an update on what the team at Lithium Finance has accomplished till date and your future plans for Lithium Finance ?
A~ I think we covered some of this already because we discussed the fundraise, we announced as well as the IDO and the product, so the only other thing I can really add is that…
We will be making some more big personnel announcements before too long and we’re working on some very exciting partnerships with big names that we look forward to announcing, but i guess to get into all that we will just have to do another AMA!
QUESTIONS FROM TELEGRAM
Q~ How do you select Wisdom nodes, what are the requirements to become one?
A~ This is one of my all-time favorite questions — anyone can be a wisdom node. You should join our network if you care about pricing assets and you have some expertise with this. I really hope we can welcome you into the community. Over time, you will develop a reputation, and you will be given tokens based on the accuracy of your answers.
Q~ Few weeks ago, Convergence Finance had an AMA at blockchainspace and they discussed the dual Pre-IDO of Lithium finance on their platform. Could you describe the outcome of that Pre-IDO event and how it has influenced your plans so far?
A~ The pre-IDO, i think was the first of its kind. It was also 88x oversubscribed. We considered it a very big success. We may even use Lithium to price pre-IDOs in the future.
Q~ Great project I must say 👍 What are the security mechanisms of Lithium to ensure that users’ assets are secured from hackers to the bearest minimum?
A~ Please read our litepaper, it gets into the security questions.
Q~ As an Oracle Provider, can you tell us how Lithium is different from Chainlink?
A~ We are only focused on private assets, so in that sense, we are not like other oracles, who are more or less focused on public market data, or other publicly available datasets, but not data relevant to illiquid assets.
Q~ What’s your plan towards Globalization, how do you plan to drive huge demand for your token and increase it worth. Will there be anything like TOKEN BURN AND BUY BACK ?
A~ Not sure if I totally undestand the question, but $LITH should trade everywhere but the US. Maybe we will pursue the US at a later date 😉 it just has a lot of regulatory hurdles.
Q~ How will LITHIUM master accurate peer forecasting AND WHY HAVE YOU THINK LEVERAGING BLOCKCHAIN TECHNOLOGY WILL BE OF GREAT HELP TO LIBERATE LITHIUM ?
A~ We use the DMI mechanism, a computational game theory tool, which allows us to distill the wisdom of crowds. We are very much in the peer prediction market, as well as the “data oracle” market. Please check out our litepaper for more context on the DMI mechanism. It’s cool stuff.
Q~ Your team and the wider ecosystem along with other alliances, what have you been successfully building so far? Why would it be convenient, profitable and ideal to join this project?
A~ The team here has the benefit of the experience of Linear Finance and Convergence Finance, two other projects incubated by Liquefy Labs, so we have a track record in the space already and are deeply experienced. Thanks for this question. Good one.
Q~ Do Lithium plan to develop its own AI technology or will you have a partnership to provide this from another project?
A~ Again, this is the DMI mechanism that forms the basis for the protocol’s decision making capabilities. Please read our litepaper, and I think you’ll enjoy the discussion of the technology.
Q~ There are two main stakeholders in the Lithium system: Wisdom Nodes; and seekers of wisdom. Because these two stakeholders, who provide the platform with this system, what will they benefit from?
A~ We’re currently signing up wisdom nodes of all shapes and sizes. For example, we’re in discussions with everyone from big institutional investors to individual analysts (people), down onto retail investors. Anyone can participate.
Q~ By deciding to be part of this project; Why will I eventually be able to say that I am lucky to be part of your project community?
A~ We are the only crowdsourced data oracle for illiquid assets in the world. 🙂
Q~ One of LITHIUM main features is making a bridge between traditional finance and DeFi. Can you tell me more about this point?
A~ I’m going to conclude on this question because it’s so important. At the moment, certain synthetic stocks are traded in the DeFi ecosystem. Certain loans are traded in the DeFi ecosystem; however, we believe the untapped potential of DeFi is stratospheric, and that communities and individuals can begin to play a more fundamental role in our financial system, rather than big financial institutions.
Picture a world where any financial service can be offered on-chain without untrustworthy intermediaries. Instead, all you have to do is trust the smart contracts. Our view is that this world is coming, one way or another. We need more market infrastructure so that it is easier to list private assets on chain. Stay tuned for an opinion piece coming from us and some other big names in the crypto space on this topic. We will tweet about it when it comes out. 🙂
I think with that everyone i am going to say a BIG THANK YOU. You have been an amazing group. Awesome, smart questions. Really appreciate the time.
I would just encourage the group to check out our website:
David Lighton is an entrepreneur passionate about inclusive financial innovation, known most recently for his work as…
You can find our litepaper there which gives a good overview of the protocol also please follow us on twitter!!!
It’s really nice having the Lithium Finance project in here!!!
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