We are excited to announce a new strategic partnership with Lithium Finance to launch decentralized Pre-IPO stock derivatives.
Our mission at Injective is to build an entirely decentralized ecosystem via which users can access any financial market of their choice. The collaboration with Lithium will focus on creating new markets for Pre-IPO stock derivatives on Injective for popular companies that are not yet publicly traded such as Stripe or SpaceX.
Lithium is an oracle built to regularly price illiquid assets using collective intelligence.
Lithium’s unique proposition is facilitated by the Determinant-based Mutual Information (DMI) mechanism. This method enables participants to request pricing on specific private assets, while simultaneously incentivizing and rewarding pricing providers who offer truthful, accurate answers. By the same token, the DMI mechanism punishes those who put forth inaccurate information.
A fundamental use case for this tech stack is pricing private market assets that are not yet actively traded. For instance, as it stands you would not accurately be able to know the share price of SpaceX since the stock is not yet live. If a user on Lithium wanted to know the value of SpaceX, he would post the question on the platform and stake Lithium tokens. Lithium will then leverage proprietary algorithms to poll a community of experts who are incentivized to win Lithium tokens if their answers are determined to be high-quality and to lose them if determined to be low-quality. In this manner, Lithium is able to price assets which would otherwise be inaccessible to individuals who are not industry insiders.
Decentralized Pre-IPO Derivatives
Using just Lithium’s price oracle, users of Injective can create new derivatives markets for private companies. The implications for this are simply profound since now our exchange protocol would be able to support trading for futures and perpetuals for private market deals that are not available anywhere else. In just a few minutes, a trader can use our governance module to create a new market for non-public companies such as Stripe, Instacart or Clubhouse.
“Lithium will be a crucial addition to our oracle module, since it would allow our users to discover new illiquid private markets that would otherwise be inaccessible. Our collaboration will help to massively lower the barriers to entry for users looking to enter new private markets in a completely decentralized manner,” said Injective CEO, Eric Chen.
This integration will vastly improve the price discovery process for Injective users for the most illiquid assets thanks to Lithium’s collective intelligence mechanism.
David Lighton, Co-founder of Lithium Finance, added, “The main focus of Lithium Finance is to price the unpriced in a timely and accurate manner, and we are glad that Injective shares this view and make Lithium part of the oracle module to help on pricing private and illiquid assets. We believe this partnership will help make private assets more accessible, and it’s an important step in bringing real assets into the DeFi space.”
Injective users will of course enjoy the added benefits of avoiding gas fees and our unmatched transaction times when trading on these new markets.
Combining the strengths of Lithium’s unique on-chain pricing oracle and Injective’s robust derivatives offering, both teams will work hand in hand to bring pre-IPO derivatives into the DeFi sector.
The movement to bring non-public valuation data to DeFi marks a true paradigm shift. The capacity for further synergies between Lithium and Injective is immense and we look forward to delving deeper into this collaboration as we seek to bring unlimited markets into a fully decentralized ecosystem.
About Lithium Finance
Lithium Finance is the first collective-intelligence pricing oracle to give precise and timely pricing on private, illiquid assets. It rewards analysts who provide truthful information and punish those who offer false pricing data. As a result, Lithium’s users obtain pricing for all hard-to-value assets such as pre-IPO stocks, private equity, and other illiquid assets effectively.
About Injective Protocol
Injective is the first decentralized multi-chain exchange protocol that unlocks the full potential of decentralized derivatives and borderless DeFi. Injective enables access to unlimited decentralized markets for futures, perpetuals, spots, synthetics, and much more. Injective is backed by a prominent group of stakeholders including Mark Cuban, Pantera Capital and Binance.
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