AMA Satoshi Club x Lithium Finance, August 4th
We were delighted to welcome our guest from Lithium. The AMA took place on July 10th, 2021 and our guest was @davidlighton.
The total reward pool was 500$ and was divided into three parts. In this AMA Recap, we will try to summarize some of the most interesting points for you.
Part 1 — introduction and questions from the Telegram&Bitcointalk community
Mary Satoshi Club: Hello Satoshi Club! We are happy to announce our AMA session with Lithium Finance! Welcome to Satoshi Club
D. Папа Роуч: today our guest — @davidlighton!
David Lighton: Hello!
D. Папа Роуч: welcome! good to have you here today!
Mary Satoshi Club: Happy to e-meet you, David!
D. Папа Роуч: how are doing? @davidlighton
David Lighton: Oh I’m doing well, thanks for asking.
David Lighton: Pleasure to be here with you.
David Lighton: How are you!
D. Папа Роуч: fantastic!
Mary Satoshi Club: I am fine and excited to hear more about Lithium Finance
Mary Satoshi Club: let’s start our AMA
D. Папа Роуч: with intro
Mary Satoshi Club: David, could you please introduce yourself and tell us more about Lithium Finance
David Lighton: Great stuff and by the way, im excited to see close to 20,000 guests online. Thank you for having us. We’re excited about our upcoming IDO —
David Lighton: And yes…let me introduce myself…
Mary Satoshi Club: Sure
David Lighton: Hi everyone, I’m David, the co-founder of Lithium — and an entrepreneur passionate about inclusive financial innovation. My team and I feel the traditional financial sector can be improved enormously by the innovative tools of DeFi and cryptocurrency. These changes are happening now and fast. As the DeFi space and the traditional finance world converge, the needs and expectations of having real-world assets in the DeFi space are also growing simultaneously. Pricing these assets in a decentralized manner is an inevitable process of bridging the two worlds together.
David Lighton: Before Lithium, I was the Founder and CEO of SendFriend, a FinTech startup using the blockchain to create faster, less expensive, and more inclusive international money transfers for immigrants in the US. Prior to founding SendFriend, I served as Special Assistant on the Haiti Desk in the World Bank following the devastating earthquake of 2010, and co-authored the Haiti National Financial Inclusion Strategy, a Central Bank-sponsored initiative to increase consumer account penetration from 25% to 50% of adults. I hold an MBA from MIT — Sloan School of Management and an M.A. and B.A. with honors from Johns Hopkins University.
David Lighton: Lithium Finance is an on-chain pricing oracle that fills one of the most important missing links between real-world asset investment and DeFi. The protocol leverages collective intelligence to price real-world assets, especially assets that are hard to value, such as pre-IPO stocks, private equity, and other illiquid assets.
D. Папа Роуч: that’s impressive background you have
Mary Satoshi Club: Your experience is great!
Mary Satoshi Club: To be honest i see such concept first time and that’s what we need now
D. Папа Роуч: me as well
Mary Satoshi Club: Tell us more about Lithium Finance team
David Lighton: Ok !!!
David Lighton: Thank you !!!
David Lighton: I’d like to use this opportunity to talk about my fellow co-founder, Steve Derezinski. Steve is a Senior Executive and MIT Blockchain Engineer & MBA, who has launched 80+ startups that have cumulatively raised over $250M to date. Steve and I share the same ethos, that bringing real-world assets into the world of decentralized finance — offering financial services with no intermediaries or guarantors — is the final frontier of crypto.
Mary Satoshi Club: I think Steve has a chance to double his raised funds with Lithium Finance
David Lighton: haha
Mary Satoshi Club: @davidlighton thank you for your intro! We have 6 questions from our community which we choose for the first part of our AMA
do you want to add something or we can go to the questions?
David Lighton: I would just add that it’s a pleasure to be here speaking with you and I know we’ll have a great discussion — go for it…
D. Папа Роуч: thank you!
and thanks for great intro! let’s gooo!
Q1 from Telegram User @KathDM
You recently announced the launch of an IEO on KuCoin, this news came at the time that Lithium is going through an IDO on Polkastarter which the team announced earlier. What are the benefits of the dual IDO + IEO? Why did you decide to do both IDO + IEO simultaneously?
David Lighton: Thanks for the question. We had initially planned to just do an IDO; however, we were presented with the great opportunity to list on KuCoin early.
Of course, this isn’t an opportunity afforded to every DeFi project. Listing on a high volume exchange such as KuCoin helps our credibility and our mission to be a universal token for pricing illiquid assets.
The view is that, while we don’t want to list on ALL exchanges at the same time, we did want to demonstrate to the community that we look at the world in a certain way and that we’re not only very focused on product but also on developing relationships with exchanges. For example, in our last round, Alameda Research (FTX), Huobi Ventures, and OKEX all invested. While we don’t have announcements pending yet about listing, our intention is to list where we can to demonstrate our credibility…
I hope this helps to answer the question !!!
D. Папа Роуч: thank you! is it not too late to take part in your IDO and IEO?
Mary Satoshi Club: Yes, we love Kucoin!
D. Папа Роуч: if it’s not too late, can you share with us info, about how people can do it
David Lighton: Here are the related links if you need:
IEO subscription page: https://www.kucoin.com/land/spotlight_r5/124?lang=en_US
Mary Satoshi Club: Thank you for sharing!
Mary Satoshi Club: Good luck to everyone who is going to participate!
Mary Satoshi Club: Thank you for your answers, David! Ready to go to the next question?
Mary Satoshi Club: @davidlighton
David Lighton: Yes
Q2 from Telegram User @victorogb
On the Lithium Finance tokenomics and token allocation formula, there would be a total supply of 10 billion $LITH tokens of which 10% is reserved for liquidity, 10% for community, 0.8 for public sales and 30% allocated to staking rewards. With an allocation of a meagre 0.8% of $LITH for public sales as compared to a 30% allocation for staking rewards, wouldn’t this be inadequate for investors and traders and why would your largest token allocation go to staking rewards? Additionally only 10% is reserved for Liquidity, how will Lithium Finance hope to grow it’s liquidity reserves and what are the scheduled vesting periods for the various token allocations?
David Lighton: This is an interesting question.
Candidly, I would say it is a more financially technical question than we typically answer.
On the one hand, our tokenomics structure is quite typical and indeed a similar structure has been employed in other projects Liquefy Labs has incubated, such as Linear and Convergence. Moreover, this is a similar structure to those used in other successful projects.
Having said all of this, I would add that we remain open to feedback and we’re happy to take suggestions under advisement. Please feel free to DM me with comments and I can raise them with the team in due course.
Thanks for another interesting question!
D. Папа Роуч: thank you for the great answer!
by the way will you plan to start any farming events after the end of public sale?
David Lighton: There will be more announcements about this forthcoming…
D. Папа Роуч: appreciate for answers! ready for the next question?
David Lighton: Yesss
D. Папа Роуч:
Q3 from Telegram User @josegamboac
Virtually all of the listed chain protocols use publicly available pricing information. Lithium is generating prices that are not available in the chain and most are not available anywhere, pricing the ones that are priceless. This is what sets lithium apart from other chain protocols. But what is the source from which lithium drives prices? How do you guarantee to encourage the best responses from all sources?
David Lighton: Sure
David Lighton: Recent advances in peer-prediction capabilities allow Lithium to query individuals to provide answers without access to the ground truth (an external answer with finality, i.e. stock price once IPO, or final score of match). Previously, aggregating multiple users’ opinions has been thought to require access to final answers (ground truth) — but this is not the case. We can therefore select a set of Wisdom Nodes or aspiring Wisdom Nodes to answer questions in binary fashion (i.e. higher / lower or yes / no) or ternary(i.e. higher / neutral / lower) or categorically (i.e. <$10, $10-$20, >$20). From this set of Wisdom Nodes And their confidence staking, we can mathematically determine the best answer prior to disclosure of the future ground truth, giving us the pricing information we need during illiquidity. The mathematical combination of all answers allows common answers to reinforce each other and off-axis — ornon-correlated answers to cancel each other. This combination allows us to reward those participating inconsistent results. In some cases where the eventual ground truth is revealed, the reward will be distributed on disclosure, meaning once an asset is priced in the market. The algorithm’s core is based on calculating the determinant of answers after randomizing their sequence into a set of matrices. This has been proven to simultaneously a) discourage and negatively impact incongruent answers and b) provide a strong reward calculation to encourage honest answers.
Mary Satoshi Club: I want to ask you which blockchain Lithium Finance will be based on or you will have your own?
David Lighton: We’re an Ethereum-based project
Mary Satoshi Club: Do you plan to add more blockchains?
David Lighton: We will make announcements about cross-chain compatibility as we go forward…
David Lighton: Good questions…
D. Папа Роуч:
do you have plans on your own mainnet? can you share this info?
David Lighton: Yes we will have a mainnet launch, in due course
D. Папа Роуч: nice! thank you for answer!
David Lighton: You ask a lot of good questions, eh?
Mary Satoshi Club: Btw, will your protocol work only for big industry players who want to know prices or may be me and @Cool_as_Ice will also be able to use it to price our actives?
David Lighton: I guess that’s how you have so many followers
Mary Satoshi Club: We are doing our best
David Lighton: In the spirit of DeFi and FinTech, Lithium is FOR EVERYBODY.
D. Папа Роуч: yes we trying to
Mary Satoshi Club: That’s great! We will definitely follow your development progress
Mary Satoshi Club: Thank you for your answers, @davidlighton ! Ready to go to the next question?
David Lighton: Yes
Q4 from Telegram User @Cheriemike
We are all familiar with Proof of Stake and Proof of Work consensus protocol and now Lithium Finance has what is called Proof of Wisdom Staking (PoWS) Can you briefly explain to us the benefit of this concensus protocol and how will the incentive structures implied by these algorithm affect participation in the protocols themselves and the services built on top of them?
David Lighton: Proof of Wisdom Staking (PoWS), is a protocol that builds on the wisdom of the public to reward them. 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.
D. Папа Роуч: PoWS protocol was made by your team? is it something new that was never used before in crypto?
David Lighton: Yes it’s new !!!
D. Папа Роуч: awesome!
Mary Satoshi Club: What will be the minimum of tokens user need to hold to participate in staking?
David Lighton: Here is our medium post…
David Lighton: Should answer some of the staking questions, but of course, we will make more announcements on staking in time…
Mary Satoshi Club: Oh, this is connected to our next question
Mary Satoshi Club: @Cool_as_Ice
David Lighton: Am I sending too many emojis??
Q5 from Telegram user @lukacy
Pre-Staking is starting August 5 on the testnet where LITH holders can stake and get massive rewards. During the pre-staking period, will this reward be locked or unlocked? There is also a part you said stakers can unstake a week before migration to mainnet. What happens after the mainnet? Will staked LITH be locked for a period of time? Will there be any changes when the mainnet is launched?
Mary Satoshi Club: Nooo
Mary Satoshi Club: As i see we got answers about pre staking
but what will happen after?
D. Папа Роуч: the most interesting thing
David Lighton: 1. rewards will be locked and released over a course of 6 months after mainnet
2. tokens will be migrated to mainnet staking program
David Lighton: Hope this helps…
Mary Satoshi Club: Also, as i see staking will be on your platform
is it safe?
Mary Satoshi Club: What about audits? Did you pass any?
D. Папа Роуч: i think this is the next question
D. Папа Роуч: about security and everything
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.
Mary Satoshi Club: Partially yes
Mary Satoshi Club: Thank you for your answers, David! Ready for the 6th and last question from this part?
David Lighton: I think so!
Q6 from Telegram user @Parmeet1
Security and anonymity are always prioritized by BlockChain projects in the development of project platforms and technologies. So, does you have any technological solutions or plans to enhance user trust in these issues?
David Lighton: Well
David Lighton: I think I answered this in some sense in my previous answer
D. Папа Роуч:
Mary Satoshi Club: I want to ask about possible restrictions for your platform users
will you have such?
David Lighton: What kinds of restrictions?
David Lighton: We are geo-fenced — No US users
Mary Satoshi Club: Only for USA?
David Lighton: We are not allowing US users
David Lighton: To hold LITH
Mary Satoshi Club: Is it possible that users will have to pass KYC?
Mary Satoshi Club: If they will buy on DEX? I think you won’t be able to prevent this
David Lighton: Yes all of our users have to pass KYC for the IDO/IEO
Part 2 — live questions from the Telegram community
Q1 from Telegram User @Eliasbb
You mentioned that on 2015 you started your journey and work with several projects. Can you name some of the projects that you work with since 2015? And what makes you attracted to build Lithium?
Sure. My journey in crypto has been multidimensional. When I went to business school at MIT I was excited about the ways the crypto/blockchain could influence financial inclusion and financial innovation.
I worked with the MIT Digital Currency Initiative. That was before I founded SendFriend, blockchain basedb cross-border payments.
This is my first foray into DeFi, however…
Q2 from Telegram User @jahlru
You recently announce a partnership with Injective protocol. Why did you make this partnership? What is the purpose behind this partnership?
Injective, a protocol for synthetics will be a wisdom seeker. We will allow Injective to poll the protocol for data…hope this makes sense… Injective is a great partner…
Q3 from Telegram User @Guandog
As a fan of lending, staking and farming, are there opportunities for me in Lithium?
Hi, we will be making more announcements about staking in the future but for now here’s our medium post: https://medium.com/lithiumfinance/lithium-finance-to-launch-pre-staking-rewards-program-on-5th-august-1008bca0688f
Q4 from Telegram User @Ratash97
Who is able to provide answers in the process of priceing a company and how the protocol establish the ground truth based on those answers ?
Wisdom nodes provide answers! Please, may I refer you to our litepaper?
Q5 from Telegram User @Angelbowmrt
Team spent a lot of money to organize AMA sessions to introduce and answer users’ questions about the project. So after the AMA sessions, what does the teamb expect in return from their community? What can we do to help the project?
I love this question…
Listen, Lithium is nothing without the community so I want you all to know how much we appreciate you. Thank you for your support! To help Lithium you can follow us on social:
Q6 from Telegram User @Leoking30
Now the market is flooded with many projects and the If we see then the competition is fierce. How will you & your team ensure that Your project maintain a competitive advantage?
Leo, thanks !
For now at least, we are THE FIRST EVER DATA ORACLE TO PRICE ILLIQUID ASSETS !!!
Q7 from Telegram User @DF3295
As a pricing Pre-IPO company, what happens if the company is not listed as an IPO at the end?
Good question — those who staked tokens would get theirs back. It’s a bummer to have to consider this situation, but we want you to know we’ve thought everything through !!! Cheers…
Q8 from Telegram User @Gutike95
One of the great limitations of blockchain assets is that having little liquidity, their value will decrease considerably, but if lithium allows to regulate the price of illiquid assets, how will they manage to maintain a fixed price when it has very little demand and liquidity?
The idea behind Lithium is that having more robust pricing data on the real sector will allow us bring more assets on chain…this helps solve the liquidity issues.
Lithium wants to bring DeFi mainstream!!!
Q9 from Telegram User @KeymerS
You mention that Lithium seeks to become a tool that allows anyone to put a price on anything, but will it really be so simple that users can set the price they want? Will it be something similar to what is seen in the NFT market?
We can certainly run NFTs through the protocol. Please try !!!
Q10 from Telegram User @Prof_Rz
Can you tell us, as an Oracle Provider, how Lithium differs from Chainlink? Why is Lithium focusing solely on private assets?
We are focused on private assets, whereas all the other oracles including Chainlink so far have focused on public assets……hope this helps…..
Part 3 — Quiz Results
In the final part we tested your knowledge in terms of Lithium. They’ve prepared 4 questions for this part. The total reward pool for the quiz was 300$.