Thanks a lot for actively participating in the Nord Finance AMA held on 16th July 2021 at the Game of Bitcoins Channel. We really appreciate all your support. This post is a recap of the entire session held with Lithium Finance

We have with us David Lighton

Lithium Finance is the world's first decentralized data oracle for private assets. What we're really doing is to create an environment where people with knowledge and expertise about various asset classes can help price the unpriced. Let me give you an example

Increasingly, folks trade synthetic stocks on crypto exchanges like FTX or convergence

often, these are private stocks. Take SpaceX for example

since there are no financials, you won't really know what the spaceX shares are "worth". All you'll really know is what someone else paid for them.

As the market begins to set prices, Lithium can give its own pricing data helping to guide the decisions of investors

so basically this technology  - based on the DMI mechanism, developed at Peking University - can be used to price almost anything.

We're very excited for the future

My background - I have been a startup founder in crypto blockchain for 3+ years now, having built my first company SendFriend, a cross-border payments startup right after finishing my MBA at MIT Sloan. Prior to that, I spent about 5 years in the World Bank Group 🙂

Q1. As I see, currently data oracles are still used by a lot of blockchain projects. So how do you evaluate the limitations of data oracles? Why does Lithium need a blockchain solution when traditional asset valuation firms are still doing well?

Currently data oracles do not provide regular updated pricing for private companies. In fact, the only way to price an illiquid asset is through an expensive and slow valuation process. This limits the pricing to only very highly valued assets.

For example, even an existing investor in SpaceX won't know the latest valuation and transaction price. Current price discovery is impossible - brokers and investors have no incentive to disclose the latest price of private companies. Decentralization can remove the “trusted” intermediaries of the financial world, creating more efficiency, transparency, and better pricing for everyone.

Lithium harnesses the wisdom of the crowd to quickly create a dominant truth. Experts (Wisdom Nodes) answer a series of questions about pricing of upcoming private stock sales and stake tokens to signal confidence levels in their answers. The more they stake, the more they stand to win.

Q2. How do you make your platform safe for investors, and is it secure against hackers? And what happens if your platform is hacked, compromising the sensitive information of your users? Is your platform up to the task?

As an Ethereum-based project, we leverage many of the same security features as other ethereum-based projects. The specifics of our IT security program are less interesting, however, than the ways in which we keep the actual quality of the data on Lithium secure. We are constantly asked questions about how we will protect against individuals trying to manipulate our algorithms, who will either ask fraudulent questions or provide fraudulent answers. We want to make it very clear from the outset that we recognize the risks associated with creating incentives for our users, and that they may try to free-ride off the system. Luckily, part of the value of the DMI mechanism’s peer prediction capabilities, is that it is not difficult for us to weed out bad answers, or even bad questions, which are outside of the standard deviation of good answers. Based on the learning capabilities of our protocol and the sophistication of the game theory that will be embedded in the protocol’s logic, we believe we can overcome fraudulent and malicious actors on the platform, just through the protocol’s learning alone.

Another tool we have in our backpockets is that of disincentives. For example, if we deem certain actors to be malicious or fraudulent, we can dock their tokens. We can actually take away value that they have invested in the platform as punishment for bad behavior. We believe that, so long as we address the risks of the protocol itself behaving out of line with Lithium’s values, we can manage risks to the integrity of our dataset.

Q3. Thank you for the elaborate Litepaper on your website. I have a query - How does your system decide the amount of incentive to the data provider?

Once either the ground truth is known or the time limit is up, the answering process stops and the answers are aggregated and the solution is calculated using the DMI-Mechanism. The answers

will be aggregated in a matrix form. Where answers are in agreement they will provide strong values in A11 , A22 , A33 (diagonally across from the top left corner to the bottom right corner of the matrix). These answers will receive the largest percentage of rewards and improvements to their overall reputation. Malicious answers will be far from the central axis and mostly in the A31 (top left of the matrix) and A13 (bottom right of the matrix), which will be negatively impacted meaning their stake will be slashed (and allocated to the honest pool) and their reputation slashed. Those in-between (minor-subaxis) will receive a smaller percentage of the overall reward pool and no change to their reputation (A32 or A12 , for example).

Q4. Lithium Oracle values assets through a DMI mechanism where wisdom nodes provide results to price seekers. So what if a large number of wisdom nodes gather together and intentionally falsify the results. How can Lithium Oracle prevent that?

Reputation is an added incentive and enhancement to correctness over time. Initially individuals may have low or no reputation, but as their performance improves they receive a higher reward, all else being equal. The closer a Wisdom Node is to the final ground truth, the higher their compensation. In addition, the more an individual signals their confidence in the results (by staking more tokens) the more they earn, enabling a strong feedback loop to encourage positive, honest behavior.

Of course if a malicious actor decides to provide answers designed to manipulate, they might also decide to add a significant stake to their answer to maximize the impact. In this case, once the consensus answer or ground truth is uncovered, not only will the malicious actor’s reputation be slashed, so will all of their stake. In the case of an attempt to collude with a number of malicious actors, the amount of funds required to stake plus the lack of direct influence (due to the random down-selection) means all of these funds will get slashed and the resulting answers will not be impacted. Therefore, the best action is to both answer honestly and stake your confidence.

Another tool we have in our backpockets is that of disincentives. For example, if we deem certain actors to be malicious or fraudulent, we can dock their tokens. We can actually take away value that they have invested in the platform as punishment for bad behavior. We believe that, so long as we address the risks of the protocol itself behaving out of line with Lithium’s values, we can manage risks to the integrity of our dataset.

Q5. My question is about the matter of MARKETING. Introducing the project to the pros, I think it shouldn't be difficult for you, because your project is amazing. But how do you get your product out to ordinary people - especially non-cryptocurrency users?

My greatest hope for Lithium is to create a bridge between DeFi and traditional financial services and functions that opens doors for millions of users. Our protocol not only benefits institutional investors, but is also built to serve the cause of individual investors and casual enthusiasts. Anyone with a stake in our ecosystem- by value of holding and staking $LITH tokens stands to gain from being a wisdom seeker or a wisdom node, as and how their situation dictates. Most importantly, ordinary people and cryptocurrency enthusiasts stand to gain from our upcoming IDO and by investing in the $LITH ecosystem. The $LITH token is one that forms the bedrock of a robust use-case. Lithium Finance’s cutting-edge pricing oracle will revolutionise the world of finance by making accurate pricing for illiquid assets accessible to one and all.

The LITH token powers this fascinating movement. Members can hold Lithium tokens and become part owners in the protocol, and get a high reputation by doing so. Members can realistically make meaningful profits on the platform as the reputation multiplied by the value of staking is the value you can take away from the platform. $LITH is a deflationary currency, so early investors in the token potentially stand to earn huge rewards! Getting a chance to invest early in a robust ecosystem that is poised for success in the blockchain space, one that is backed by top VCs such as Hashed and Pantera, is a unique opportunity for everyone- including you and I. Our IDO is a once in a lifetime investment opportunity, and early investors stand to make extremely healthy monetary gains from the success of the IDO and our native token. It is getting this information out to as many people as we can that forms the crux of our marketing efforts to crypto enthusiasts and casual users.

Q6. Currently Binance is developing strongly NFT, do you intend to cooperate with Binance?

We will be making announcements about questions related to this in the next few days. Stay tuned!!!

Q7. According to the project's roadmap- what are your most important next priorities? Does your team have enough Funds and Community to achieve those milestones?

You can see the news of our recent seed extension on our linkedin and twitter. We have raised a total of just under $8,000,000, led by Pantera Capital and Hashed 🙂 We are well funded 🙂

Q8. Since starting the project, did you achieve everything you planned or did you have to make drastic changes to your main idea at the start and what makes your project better than your competitors?

So far we are following our original roadmap very closely 🙂

Q9. Security and privacy are the most important, issues. Can Your project users, be confident about security?

Please refer to our litepaper on the website which elaborates upon security 🙂

Q10. How many rewards campaigns could Lithium run in the near future? Do you want to attract more users to your ecosystem?

If you come to act as a wisdom node, you will be allowed to earn LITH. Come join us!

Q11. Can you explain us what s re the requirements that a user must complete to be considered a Wisdom node? Also how works your reputation system?

Anyone can be a wisdom node. Your reputation will be determined by the quality of your answers, according to the protocol. Please join us!!! You can be a wisdom node!!!

Q12. In their roadmap they are planning to explore Asian and Eastern markets. Are you also planning to expand into the Americas? How are you working to expand the community to these regions?

Great question. For now we are confined to non-US markets. However, this could all change! Stay tuned!

Q13. What is the team's orientation and development plan for 2021 in the Defi region, why do you think Defi, this immature term, has a future? What results do you expect to achieve?

We have some big announcements forthcoming regarding the team. Please follow us on twitter! This will be an exciting month for our community. We really value your support.

Q14. Since community is one of the biggest growth drivers for projects, how do you plan to include even more the community in your project?

We will occasionally do airdrops 🙂

Q15. What do you value most in future project development? Where will you start? What is the general plan?

Right now we are heavily involved in product development. We will update the community as we get closer to a mainnet launch. Please stay tuned to our twitter for announcements.

Q16. What are the partnerships you are looking for in future as it might play a vital role in the development of project?what are the future plans?

At this time for the wisdom nodes function, we are focused on partnering with individuals, asset managers, DeFi projects, venture investors, private equity investors, brokers, and others. We are dedicated to building the highest quality ecosystem we can.

Q17. How does project increase the token's value, liquidity and utility?  So that it can lead to an increase in token prices?  What is your plan to make your project stable and provide the highest return for investors in the long term?

Good question. People will use LITH to access our protocol's data. We are launching a utility token. Please come join the platform!

If anyone is in India: please join our Indian telegram group!!! https://t.me/lithiumfinanceindia

Q18. You point out that Lithium Finance is at a single point of convergence between blockchain, thus allowing a bridge between traditional finance and DeFi, but does this bridge really only work between Linear and Convergence as shown on your website?

No, in the longer term it will be bridge assets from anywhere. It's just that we launched our pre-IDO campaign with convergence because they are a longstanding partner of ours 🙂

Q19. Lithium Finance offer a way where illiquid assets can get value easily, but this is enough to increase the commercial speed of this kind of assets? Lithium Finance can be used to help the most popular illiquid asset ( real state)?

We do hope to work on real estate in the future 🙂

Q20. Do you have any plans to attract non-crypto investors to your project Because it is the success of a project to get more investors who are still not in the crypto world. What are the plans to increase awareness around your in non-crypto space?Could you please explain your tokenomics on about how can we trust this project ?

We are keen to work with wall street investors as our wisdom nodes 🙂

Q21. What are you doing to promote your project in countries where different languages are spoken?

We are trying to do AMAs with as many different communities as we can.

I would like to say a final thank you to the community for your time here! I really appreciate all the great questions! We are excited to stay in touch 🙂 Please follow us on twitter 🙂

https://twitter.com/lithiumfinance