What Is Lithium Finance (LITH) And How Does It Work? | KuCoin Crypto Gem Observer

2021/08/02 10:00:00

What is the best way to gather information on more obscure assets? While there are platforms like LINK and BAND that use publicly available price information for pricing, they fall behind when it comes to the pricing of unconventional assets in the absence of on-chain price information or even a complete lack of price information.

Lithium is filling this void by developing a protocol that will draw knowledge from a wide range of users to answer questions regarding such assets.

What is Lithium Finance?

Lithium is a protocol that regularly prices unlisted and illiquid assets. It uses collective wisdom to price assets that are difficult to value in the real world, such as pre-IPO stocks, private equity, and non-current assets.

The platform has developed an incentivization and reward model in order to attract users and the valuable information they can provide. In this way, LITH is building a bridge between DeFi and traditional finance, broadening the breadth of the investment market.

How does Lithium Finance work?

Lithium is supported by a cryptocurrency incentive mechanism that uses the immutability of Ethereum’s global asset track to reliably provide high-quality information and fundamentally solve the problem of information asymmetry in the private market.

It utilizes a Determinant-based Mutual Information (DMI) mechanism to solve pricing problems. The Lithium system is mainly composed of two types of participants, namely ‘Wisdom Nodes’ and ‘Wisdom Seekers’. Wisdom Seekers provide LITH as a bounty for ”answers“, and those who provide "answers" pledge LITH to show confidence in their "answers". This method of finding “consensus” by asking specific questions is called the DMI mechanism.

Who created Lithium Finance?

The two co-founders of Lithium have worked as blockchain mentors at MIT, and have senior venture capital business operations experience in the United States:

Steve Derezinski is a senior lecturer at Babson who has founded more than 80 start-up companies and has raised more than 250 million U.S. dollars to date.

David Lighton worked as a researcher in the Haiti Office of the World Bank and the Yale University Global Justice Project. He is currently the founder and CEO of SendFriend, a cross-border payment fintech startup.

What is the LITH token?

The LITH token is a utility token that plays a key role in the operation of the project. The token distribution is as follows:

Seed: 4.50%

Strategic round 1: 7.00%

Strategic round 2: 7.50%

Public Sale: 0.83%

Public liquidity: 0.17%

Team: 10.00%

Advisor: 5.00%

Liquidity: 10.00%

Ecosystem: 15.00%

Community: 10.00%

Staking Reward: 30.00%

What is LITH used for?

LITH serves several functions that help to balance out supply and demand of information of the platform:

It is used as the price feed bounty, where users posing questions can offer a bounty for answers in the form of LITH. The more they offer, the more likely they are to receive a response.

Then, those that provide correct answers and information to questions that are posed on the platform will receive the bounty for their input.

It is also used for staking. Users who answer questions can stake a certain amount of LITH in order to signal their confidence in their answer.

Closing Thoughts

Lithium offers a very unique yet crucial service to users. It has built an economic model - the DMI - around it using the LITH token to ensure users are incentivized and rewarded for their cooperation. It leverages the immutability of the Ethereum blockchain to to reliably provide high-quality information and fundamentally solve the problem of information asymmetry in the private market.

The finance market - both traditional and decentralized - is garnering more attention from a wider audience. At the same time, niche markets and obscure assets will also start to come to the forefront, which people will likely need information on. Therefore, there is a growing audience for a protocol like Lithium, making things look very promising for LITH.

The subscription for KuCoin's 13th Spotlight project, Lithium Finance (LITH), the oracle that precisely predicted the IPO value of Coinbase, will be started at 12:00 p.m. August 3, 2021 (UTC). As for more information, please follow our official News.

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