Injection protocol, one Second-tier derivatives platform, Today announced the establishment of a new strategic partnership with Lithium Finance to launch a decentralized pre-IPO Stock derivatives. Lithium Finance provides an oracle that can use collective intelligence to systematically price non-current assets.
The Determinant Mutual Information (DMI) mechanism facilitated the lithium proposal. This method enables participants to request pricing for specific private assets; at the same time, it incentivizes and rewards pricing providers that provide the most accurate answers. Similarly, the DMI mechanism punishes those who provide incorrect information.
Main use cases Lithium battery Pricing is in progress for private market assets that have not yet been actively traded. For example, for the time being, you cannot accurately understand SpaceX’s stock price; because the stock has not yet gone online. Therefore, if a user on Lithium wants to know the value of SpaceX, he will post questions on the platform and pledge Lithium tokens.
Subsequently, Lithium uses a proprietary algorithm to vote on the expert community. If their answers are determined to be high quality, they will be incentivized to get Lithium tokens…or lose them if the answers are determined to be low quality. Therefore, Lithium can measure asset prices that are not available to non-industry players.
Decentralized pre-market derivatives
Injective currently provides access to many different oracle providers, including Chainlink, Band Protocol, and API3. The addition of lithium allows the Injective Protocol to increase the number of available markets.
Using Lithium’s price prediction machine; Injective users can create new derivatives markets for private companies. Therefore, the Injective transaction agreement will be able to support futures and perpetual contract transactions in private market transactions that cannot be conducted anywhere else. Traders will use Injective’s governance module to create a new market for non-listed companies.
“Lithium will be an important supplement to our oracle module. Because it will allow our users to discover new private markets with poor liquidity, otherwise these markets will be inaccessible. Our cooperation will help reduce users who wish to enter new private markets Barriers to entry; in a completely decentralized way.”
– Eric Chen, CEO of Injective Protocol
When trading in these new markets, Injective users can also enjoy the additional benefits of avoiding gas fees and fast transaction times. Combining the advantages of Lithium’s on-chain pricing oracle and Injective’s derivative products; both teams will work to introduce pre-IPO derivatives into the DeFi field.
“The main focus of Lithium Finance is to price unpriced assets in a timely and accurate manner. We are very pleased that Injective agrees with this view and uses Lithium as part of the oracle module to help price private and non-current assets. We believe in this kind of partner. Relationships will help make private assets more accessible; this is an important step in bringing real assets into the DeFi space.”
– David Lighton, co-founder of Lithium Finance
The Injective chain is the core pillar of Injective’s second-tier derivatives platform, and it hosts a fully decentralized order book, transaction execution coordinator, EVM execution environment, and a two-way token bridge with Ethereum.