Three minutes with Lithium Finance: A decentralized prophecy machine priced with collective intelligence

Unlike most prophecy machine products on the market, Lithium Finance uses collective intelligence to price hard-to-value real-world assets such as Pre-IPO stocks and private equity.

Three minutes with Lithium Finance: A decentralized prophecy machine priced with collective intelligence

While the rapid growth of decentralized finance (DeFi) is not yet large enough to shake up the traditional financial market, the emergence of a large number of innovative elements has made the market feel the possibility of improving traditional finance with DeFi, and this change has already begun to happen. The need and expectation to bring real-world assets into DeFi is growing in tandem, and the question of how to price real assets in a decentralized way is an inescapable one.

Decentralization means that the “trusted” intermediaries of traditional financial markets will no longer exist, and while there is a range of prophecy machine products that can bring pricing information to the DeFi world for some assets, these prophecy machines tend to lag in what they can offer, and are more “powerless” for unlisted assets or assets that do not yet have consensus prices in the real world. Lithium Finance, a new type of prophecy machine that uses collective intelligence to price hard-to-price assets, may solve this market pain point and be the key to bringing real-world “complex assets” into the DeFi world.

The Power of Collective Intelligence
Lithium Finance is an on-chain pricing prophecy machine that fills one of the most important missing links between real-world assets and DeFi. Unlike most existing prophecy machine products on the market, this protocol leverages collective intelligence to price real-world assets including Pre-IPO stocks, private equity, and illiquid assets, which are difficult to value.

The Lithium system consists of two main categories of participants, Wisdom Nodes and Wisdom Seekers, with those seeking answers to asset price questions offering Lithium’s native token, LITH, as a bounty, and those with expertise providing answers and pledging LITH to demonstrate confidence in their answers. This method of finding “consensus” by asking specific questions is known as the DMI mechanism.

Traditionally, the only way to put a fair price on real-world assets was to hire trained and certified expert appraisers, a slow and expensive process that clearly could not be a “public act”. With Lithium Finance’s DMI mechanism, such evaluation is expected to be possible on-chain at a fairly low cost, and the process of incentivizing intelligent nodes that provide quality answers is greatly simplified.

Lithium Use Case: From pricing unlisted companies to millennial antiques
In the case of unlisted unicorns like Stripe and SpaceX, if investors want to invest in these companies at an early stage, they obviously need to assess the value of these companies and give them a relatively reasonable “stock price” expectation. However, given that key data such as revenue is closely protected before the companies go public, even if some of the data is accessible, valuing the company as a whole is still a big challenge.

This “dilemma” often leads to sellers and brokers in the market to take advantage of the information gap to create FOMO sentiment in the market, and thus inflate asset prices, resulting in investors not being able to invest at a reasonable price, or even “what is a reasonable price for this stock? which is clearly an unhealthy phenomenon.

Lithium uses a proprietary algorithm to count votes within the expert community, and if an expert’s answer is determined to be of high quality, he or she wins LITH tokens as a reward, and if it is determined to be of low quality, his or her pledged LITH is forfeited. The unfairness created by the asymmetry of market information that investment banks and brokerages relish is being dissolved by Lithium’s proposed decentralized solution, which is of great benefit to the average investor.

The real estate market is another area where Lithium is making a splash. Let’s say a potential buyer wants to buy a prime condo and the market is currently hot with list prices skyrocketing. This potential buyer may want to know when the price will drop but doesn’t want to pay high fees to those property appraisers. In this case Lithium can use machine learning and data to compile the best valuation for the property by taking into account key data on real-time market conditions and sentiment, as well as the opinions of other professionals and buyers of the subject property.

How to price an antique is obviously not an easy task for most people, but assuming we can create a community that involves enough “know-it-alls”, the problem seems much easier. collectively.

Lithium Finance is working to build a new type of on-chain pricing prophecy machine to price real-world assets more efficiently, transparently, and accurately, especially for specific assets for which there is no clear consensus price even in the real world. These use cases are just a few of the many examples of what Lithium can achieve.

Posted by:CoinYuppie,Reprinted with attribution to:
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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