KuCoin AMA With Lithium — Creating the First-Ever DeFi Pricing Oracle for Private Assets

2021/08/04 12:29:19

Dear KuCoin Users,

Time: August 3, 2021, 11:00-12:03 (UTC)

KuCoin hosted an AMA (Ask-Me-Anything) session with Lithium Co-Founder David Lighton in the KuCoin Exchange Group in line with the LITH token sale on KuCoin Spotlight.

Project Introduction

Lithium uses collective intelligence to price the unpriced. It is the world's first pricing oracle for illiquid assets. At the moment, finding data on illiquid assets such as private and pre-IPO stocks is next to impossible. Or, one has to pay high fees for appraisal services. This is a difficult market.

Lithium utilizes sophisticated technology to crowdsource wisdom from its users, creating the first-ever DeFi pricing oracle for private assets. If you want to know the value of a stock or the price that an IPO really should occur at, Lithium can create answers.

Official Website: https://lith.finance

LitePaper: https://lith.finance/Lithium_Finance_Litepaper.pdf

Follow Lithium on Twitter and Telegram.

Guest:

David Lighton — Co-Founder of Lithium Finance

David is an entrepreneur passionate about inclusive financial innovation known most recently for his work as 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, David served as Special Assistant on the Haiti Desk in the World Bank following the devastating earthquake of 2010. David is also an advisor to the Haitian Central Bank on payments and financial regulation.

He holds an MBA from the Massachusetts Institute of Technology – Sloan School of Management and M.A. and B.A. degrees with honors from the Johns Hopkins University in International Economics and International Relations.

Q&A from KuCoin

Q: Could you start by explaining what Lithium Finance is all about? What problem did you see, and how are you solving it?

David: 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 and technical engine needed to pull the worlds of traditional finance and DeFi together, enabling tremendous growth and innovation at the interface.

Q: Since the establishment of Lithium Finance, it has gone through a rapid development process, which can never occur without the effort of your team members. Would you give a brief introduction of your team members, including some interesting stories behind the project?

David: Yes, we love our team. It’s a great team.

I’d like to first introduce my fellow co-founder, Steve Derezinski. Steve is a Senior Executive and MIT Blockchain Engineer and MBA, who has launched 80+ startups that have cumulatively raised over $250M to date. We share the same ethos that bringing real-world assets into the world of decentralized finance — offering financial services with no intermediaries or guarantors — is the final frontier of crypto. The market still hasn't seen a pricing mechanism that's able to price illiquid real-world assets effectively. This is the problem that brought us together.

For me, I am 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. Before founding SendFriend, I served as Special Assistant on the Haiti Desk in the World Bank following the earthquake of 2010. I hold an MBA from MIT – Sloan School of Management and an M.A. and B.A. with honors from Johns Hopkins University.

Q: Why is DeFi so important in changing the face of finance?

David: I can promise you. DeFi is very important.

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: What are the highlights of Lithium’s technology and products that you believe will help you succeed?

David: Yes, good question. We have to make the narrative very clear.

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.

There are two major stakeholders in the Lithium system: Wisdom Nodes and Wisdom Seekers. Those seeking answers to questions about the price of an asset will use LITH tokens — Lithium’s native token — to provide a bounty, and those with expertise in delivering answers will stake LITH to signal confidence in their answers. This method of finding the dominant truth by asking subject questions is known as the Determinant-based Mutual Information mechanism or DMI-Mechanism.

Q: As a community-based project, how can the community donate their quota for your success? Do you have a Global Ambassador Program or a Referral Reward System?

David: Well, we are a community-based project. Let me tell you a bit about how we have built the ecosystem, and I hope you will participate! In our system, participants are asked subjective multiple-choice questions to find a dominant truth. The answer provides price discovery for illiquid assets.

So yes, there are really two major stakeholders in the Lithium system: Wisdom Nodes (e.g., experts who have knowledge in the latest pricing of private companies — they could be brokers, investors, or anyone that is familiar with private market activities) and Wisdom Seekers (e.g., crypto projects, investors, private equity firms, merger and acquisition investment banks, Wall Street analysts — all of these firms are seeking accurate pricing information to make decisions). Those seeking answers to questions about the price of an asset will use LITH tokens — Lithium’s native token — to provide a bounty, and those with expertise in delivering answers will stake LITH to signal confidence in their answers.

The theorums behind our DMI-mechanism can be found here in our Litepaper: https://lith.finance/Lithium_Finance_Litepaper.pdf

Q: What do you think about the explosion of NFT that is causing a lot of attention in the world? How does the Lithium Finance project take advantage and exploit it to the fullest extent?

David: NFTs have been somewhat of a revelation in the blockchain space and have quickly become one of the most talked-about use cases of the technology, with everything from luxury collectibles like Gucci stickers to digital artwork fetching millions of dollars getting a lot of attention in the space. It has become a lucrative avenue for artists as NFTs give you a way to sell work that there otherwise might not be much of a market for.

Being a nascent industry brimming with activity, the Lithium protocol can be a game-changer for investors. Let’s say a potential buyer wants to purchase a great NFT item. The market is hot, and the listing price has been skyrocketing. With the nature of NFTs — digitized ownership of artworks, luxury collectibles, music, etc. involving many intangible factors and with imperfect information floating around, accurate speculation becomes nearly impossible. Crucial data, accounting for real-time market conditions and sentiment, the opinion of other professionals and buyers on the specific collectible, and the intangibility of artwork in general — are all missing from the equation. Lithium can comb through these responses using machine learning and data science to generate our best estimates from the raw data inputs.

Q: What happens if the ground truth is never revealed? Do the Wisdom Nodes receive any rewards? For instance, if a company never goes public, would they get any rewards?

David: Good question. And this brings up a whole process of question formulation. As you know, we need to create a set of questions for the nodes to answer. Within that set is at least one question with a ground truth that will be revealed prior to the set of answers being calculated. If the ground truth is never revealed, then it is treated as a subjective question with no ground truth and the answer is the honest nodes’ consensus. The other questions are subjective (meaning no ground truth) and are rewarded via the DMI mechanism reward calculation.

Also, in general, there are many cases when we would halt a question session — not enough answers, time has expired, or other issues. Then we just refund everything and start over. Not really a fun thing to talk about but important that people know they will get their money or stake back if there is an error somewhere.

Q: Can you introduce Lithium Finance's investment background and ecosystem partners? How are these corporations carried out?

David: The past few months have been an exciting journey for the team at Lithium Finance. From protocol design to fundraising, pre-IDO, and marketing, we won’t be able to be where we are today without 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. You can find more information in our article here: https://medium.com/lithiumfinance/lithium-finance-takes-on-additional-investors-total-raise-reached-7-6m-878ef4f73bb7.

Of course, we had released an IDO announcement last weeks. 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: https://medium.com/lithiumfinance/lithium-finance-ido-launching-on-polkastarter-on-august-5th-dcf11a51023f

Last but not least: https://www.kucoin.com/news/en-announcement-of-lithium-lith-token-sale-on-kucoin-spotlight

We are listing on KuCoin!

Free-Ask from KuCoin Community

Q: Love your energy David, so tell me, is LITH connected to Polkastarter? If so, how is it connected? Also, why is it so important that you decide to solve the problem of illiquid assets? And last but not least, with crypto facing attacks from regulators, does Lithium Finance have a plan in place to wade through the SEC attacks?

David: Wow, this is many questions.

- LITH is doing its IDO on Polkastarter (and IEO on KuCoin)

- Illiquid assets are one of the final frontiers to move more commerce on chain

- We are not listing in the US at this time which mitigates certain risks

Q: At this point, do you think you need exchanges such as Binance to keep growing? Or is it better to forget those things and focus on other activities? Marketing of Lithium as we know that every project in crypto needs adoption for growth. So, what are the future plans of Lithium for mass adoption?

David: We are interested in listing on exchanges. For today, we are honored to be working with our colleagues at KuCoin. More to come.

Q: What is the utility of the native token of Lithium Finance? Also, what special features do you have or plan to implement that keep you ahead of your competitors?

David: Lithium tokens allow you access to pricing data on illiquid assets such as pre-IPO stocks, real estate, and private equity.

Q: Who will be Lithium's biggest competitor?

David: Well, this is a question I like.

At this time, there is no other data oracle for private assets, so we have no competition! Today that is.

Other prominent oracles in the space focused on public markets include Chainlink.

Q: Can a participant be a wisdom node and a wisdom seeker at the same time?

David: Yes! This is so important.

ANYONE can be a wisdom node or a wisdom seeker. Please join the community and help us grow into the success story we know we can be.

Thank you for an amazing AMA, everyone!

Q: Is there anything else you would like to share or you want us to know?

Well, yes. Here is the IEO subscription page: https://www.kucoin.com/land/spotlight_r5/124?lang=en_US

Thanks everyone for just a fantastic discussion today! This is fun!

Giveaway Section

KuCoin and Lithium have prepared a total of 90,000 LITH to give away to AMA participants.