Our vision is to harness collective intelligence for better decision making. Initially, Lithium Finance focuses on building a decentralized collective intelligence platform to gauge accurate market sentiment. These pricing information previously unavailable will facilitate liquidity and financial innovation for illiquid assets.
Illiquid assets are assets that lack an active market or a ready pool of buyers and sellers. These assets cannot be quickly transacted or exchanged without having to incur a substantial transaction cost. The market prices of which are not available for comparison or reference. Examples of illiquid assets include crypto projects, NFTs, real estate, antiques, private equities, artwork, and collectibles.
Lithium addresses the issue of unavailable pricing information of illiquid assets by bringing in accurate pricing through collective intelligence and tokenomics. Lithium is applicable to both digital and real world assets, all Price Seekers have to do is to submit their enquiry attached with a bounty offer to receive genuine pricing information from Price Experts who in turn, are incentivized by our platform’s tokenomics (more on that later).
Lithium should not be mistaken for a data oracle. A data oracle receives information from the outside world, such as daily temperatures, number of votes of a political candidate, successful transactions, or price changes to feed into its smart contracts and the underpinning blockchain. Lithium leverages on collective intelligence to aggregate data and produce first hand genuine pricing data that cannot be found anywhere else.
There are two main roles participants can assume in the protocol — Price Seekers and Price Experts — which allows them to interact and keep the ecosystem running smoothly. Price Seekers are participants who enter the Lithium ecosystem in search of accurate pricing information on illiquid assets such as crypto projects, issuers, investors, lenders, and analysts. Price Seekers will submit questions on asset prices and offer a bounty to incentivize Price Experts to submit accurate pricing of the assets in question. The bounty will then be distributed to Price Experts with good performance. Price Experts are participants who enter the Lithium ecosystem to offer their price estimates — to answer the Price Seeker’s enquiries. Price Experts are subject matter experts or market participants with insights into the asset prices in question. They are usually brokers, traders or investors who are now motivated by the economic incentives up for grabs on Lithium.
LITH is Lithium’s native token, from which all rewards and staking will be denominated within the ecosystem.
Two parties can maximize the utility of LITH, namely the Price Seekers and Price Experts when participating within the ecosystem. Price Seekers post a bounty offer into the reward pool upon submitting their price enquiries on their interested illiquid assets. When Price Experts respond to the price enquiries, they stake LITH to signal their confidence in their price estimates and receive LITH as reward according to the accuracy of their price estimates.
You can perceive LITH as essentially the key to access a hub where users gather to exchange collective intelligence. It is where they will always be incentivized to keep the economy robust in the service of the common good.
The Reputation Tokens (RPs) are reputation scores held by Price Experts to signal their reputational capital. RPs are not transferable and can only be earned. They are used as a weighting factor for Lithium’s pricing mechanism through RP staking.
Our pricing mechanism integrates users track record and reputation in determining pricing output. RP held by Price Experts are adjusted according to their performance and contribution to accurate pricing information.
Lithium Finance is implemented through our protocol design premised on the following methods: (a) economics and reputation tokens, (b) pricing mechanism featuring two-way price inputs with reputation weighting, and (c) reward mechanism that incentivizes accurate estimation deduced upon the nascent market sentiment.
To respond to a pricing enquiry as posted by a Price Seeker, participating Price Experts will submit pricing estimates and stake refundable LITH to signal their confidence. High reputation Price Experts may also optionally stake their reputation (RP) so that they will be able to increase their Staking Limits, and in turn, stake more LITH.
Nobel Prize Laureates Prof. Daniel Kahneman and Prof. Richard Thaler pointed out that people assign different values to buying and selling, especially for assets that are held for use or not regularly traded.
The Lithium protocol assists Price Experts to consider pricing thoroughly by requiring estimates in a two-way bid and ask pricing format. Price Experts are required to quote price estimates they believe the market is prepared to buy or sell a particular asset at a specific time.
We are very confident in our collective intelligence model because a large number of market participants are involved to attest to and ensure its integrity. We receive constant feedback from our community and enhance our protocol accordingly. The protocol itself is equipped with financial incentives to prompt Price Experts into providing accurate and genuine price estimates. Price Experts are also held accountable with their reputation tokens, their historical performance can be tracked, both features are open-sourced.
Machine Learning (ML) based predictions attempt to forecast prices based on predictive models constructed on relationships between independent variables or features against pricing from historical data.
Lithium, on the other hand, leverages collective intelligence to harness and incorporate human insights in pricing, where human feedback could be used to help validate and/or retrain ML models. We believe collective intelligence is complementary to and enhances ML in many use cases.
When participating in pricing enquiries, Price Experts will be rewarded with shares drawn from the reward pools. They are rewarded based on the following factors: (a) accuracy of price estimates and (b) amount of LITH staked by the participating Price Experts. (Note: amount of LITH that a Price Expert may stake is subject to Staking Limits).
Boosters will also be rewarded to Price Seekers whose bid and ask price estimates are closest to the respective mean. Stake (and shares in the reward pools) can potentially be boosted by as much as 100x for the most accurate submissions.
RP Staking is optional. It only applies to those who want to utilize their reputation to increase their influence in the market and the market clearing price.
RP Staking’s benefits are manifold, as previously mentioned, your pricing estimate will be more influential at the end of the pricing estimate process. You will also be granted higher staking limits to be used to stake more LITH. And as a result, elevate your gains from the shares in the reward pool.
Staking Limits are controls to limit the maximum amount of LITH and RP that Price Experts could stake in a price enquiry. They are designed to enhance the security and integrity of Lithium’s protocol.
In general, high reputation users will be allowed to stake higher amount of LITH and RP. Given their RP, opinions of these users will carry more influence in the pricing output. Being able to stake more LITH, high reputation users will also be entitled to larger share in reward pools given the same level of accuracy for their price estimates.
Our protocol is designed to collect genuine pricing estimates. In order to achieve this, Lithium’s reward mechanism makes it economically impractical for malicious actors to provide false pricing estimates to the ecosystem. As doing so will affect the RP and rewards an expert receives.
Our mission has always been to harness decentralized collective intelligence for better decision making. As use cases for the protocol evolve, we are continually updating and optimising protocol design to solve the pricing inaccessibility issue of illiquid assets.
Having said that, we maintain our view of DMI as a useful tool for appropriate use cases as we expand to further cover asset classes and additional collective intelligence solutions.
In the meantime, Lithium continues to explore upgrades and changes to bring more illiquid asset solutions and make it even more inclusive for all market participants.
All LITH staked on the platform are refundable.
Price Experts will be rewarded with shares in the reward pools for participating in the pricing estimate process. Users are only responsible for gas fees but not the process or outcome of any of the price estimates.
Please note that reputation of Price Experts will be adjusted based on the accuracy of their price estimates submitted to the platform.
Price Experts offer answers to pricing quests posted by Price Seekers.
As a price expert, you can stake your LITH and RP (Reputation Token) to signal confidence on your pricing estimates. The larger amount of RP stakes, the more market clearing power the pricing estimates will have as a result.
Price Experts with higher RP will enjoy higher staking limits in addition to enhanced market influence.
Anyone who has a price they want to enquire about can become a Price Seeker on Lithium. For example, you can post your enquiry about an upcoming NFT project they’re excited about but not sure what price to expect it to be, along with a bounty offer. Interested in becoming a Price Seeker? Let us know how we can help.
LITH rewards from the pre-staking program follow a linear vesting schedule that will accumulate every second from beginning April 1st, 2022 until October 15th, 2022. Users may choose to redeem rewards as many times as they like (in smaller amounts) or wait until October 15th, 2022, or anytime afterward to redeem their rewards in full amount.
Please refer to the links below where you’ll find instructions and screenshots that show you how to claim your pre-staking rewards.
To submit your price enquiry, you'll need:
- 1.A wallet (such as MetaMask), with LITH and MATIC tokens for gas deposited in it. These tokens will be used by you to participate and stake on Lithium as well as to pay gas fees
- 2.Input bid and ask price estimates you believe the market is ready to buy and sell at
- 3.Input LITH and RP (Reputation Token) stake
- 4.Submit your price enquiry and wait for our protocol and Price Experts to work its magic
- 5.Reward mechanism is in place for Price Experts who submit accurate price estimates from the bounties that Price Seekers put on when posting their price enquiries. There are base rewards and bonus rewards. The former offers a larger number of active Price Experts financial rewards while the latter offers a smaller number of active Price Experts a larger sum of financial rewards for their outstanding precision on price estimates. The accuracy of pricing estimates are measured by proximity to the respective mean bid and ask estimates and LITH staked.
Will there be open testing activities in the future? Could there be some reward for participating in the test?
We are planning for a public testnet and mainnet beta over the next two quarters. We’d certainly love to have your feedback to help refine Lithium. Users participating in beta tests will be able to win reputation tokens and other rewards. Stay tuned for more updates!
Lithium is a collective intelligence platform to gauge market sentiment and pricing. Lithium itself is not an exchange or marketplace for trading of illiquid assets.
Although Lithium is not an exchange, we have the edge over facilitating liquidity and financial innovation for illiquid assets by providing genuine and decentralized pricing information. We have a robust tokenomics design, liquid platform, and reward mechanism. All these pieces come together to create a go-to platform for illiquid pricing references so that all market participants can be equipped with reliable pricing information and make informed decisions in real-life and DeFi transactions.