Efficiency of markets are often measured by quality and efficiency of price and asset allocation they produce. Illiquidity from high search and other transaction costs is an indication of market inefficiency. We believe illiquidity in digital assets and traditional finance alike can be improved enormously by accurate pricing in a decentralized manner and on demand.
NFT Creators: launching new collection with confidence NFT projects will be equipped with a tool for assessing demand and market sentiment on their artwork and/or their competitors, allowing them to launch with confidence. Investors will also gain insight on genuine pricing expectation from project community and fellow investors.
Investors: exchanging pricing insight and guidance Through Lithium, investors will be equipped with a sourcing mechanism that can generate the current price of an asset. With this advantage, they will be better positioned to make informed and much more rational decisions regarding the purchase or sale of an asset.
Companies & Prospective Issuers: gauging market sentiment and demand prior to tapping the market Prospective asset issuers will be equipped with a tool for assessing market sentiment before making final decisions to issue an asset to either the public or private marketplace. In traditional finance, roadshows are one method that issuers use to gauge current and perceived engagement on assets. With Lithium, these issuers will be able to access similar information instantly and across a wide range of assets.
Lenders & Lending Pools: receiving frequent pricing that will enable lending and collateral management. Private Lenders & Pools will be able to access frequent pricing that will in turn boost their lending appetite and hence the liquidity of the underlying assets. Private Lenders & Pools will be able to access pricing information that will enable frequent trading, synthetic assets, collateral management, and more.
Exchanges & Other Marketplaces: a new form of derivatives and financial instruments can be unlocked through benchmarking and/or referencing Lithium's pricing data. With the proliferation of blockchain technology, there has been growing interest in tokenization - whereby ownership of an asset will be administered on the blockchain, a token will represent a share or claim on the underlying illiquid asset, and smart contracts will handle any income distribution amongst token-holders. Tokenization, either through direct asset tokenization or securitization token issuance, requires the token issuer to have first acquired the target asset, which is not always possible. It also presents further challenges such as regulatory, governance, and asset management. When tokenization is not feasible or practical, access to invest in illiquid real-world assets could be unlocked through financial products benchmarking pricing information produced by the Lithium protocol.