Introducing Lithium Finance Updated Whitepaper and the New Pricing Mechanism
Lithium Finance is building an innovative pricing mechanism for illiquid assets. Tremendous value will be unlocked by producing accurate price estimates across the NFT, DeFi, and traditional finance ecosystems through the Lithium protocol.
Since the release of our first Litepaper, we have been privileged to have received many insightful feedback through user research and community engagement. These allowed us to continually improve the protocol design as updated in the whitepaper.
Key updates include:
- Terminology: Ecosystem participants seeking and providing pricing information to be consistently referred as Price Seekers and Price Experts to enhance clarity.
- Reputation Scoring: Introduction of a new reputation token, the Reputation Token (RP Token), which is a non-transferable, non-purchasable metric for signaling the reputation of Price Experts. Through this metric, Price Experts with a track record of high performance will enjoy greater influence in pricing among the pool of other Price Experts.
- Pricing Mechanism: Implementation of a system for two-way (in bid and ask) price inputs, and a market clearing logic that takes into account reputation token staking to produce pricing estimates output.
- Reward Mechanism: Incentive structure to encourage accurate price estimation for the asset(s) in question. Price Experts’ entitlement in the reward pool for a Pricing Quest are allocated based on their respective stakes and pricing accuracy.
More details are available on our updated whitepaper. We will continue to share more use cases and details of our pricing mechanism ahead of public beta release.
About Lithium Finance
Lithium Finance is the first decentralized asset pricing mechanism powered by collective intelligence. We bring market participants together to estimate pricing for illiquid assets on demand.
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