Lithium Finance has raised $5 million in a founding round led by Pantera Capital and Korean blockchain VC Hashed to build a decentralized data oracle protocol for pricing private assets.
The startup said in a statement on Tuesday that other investors who have backed the round included Alameda Research, Huobi Ventures' Blockchain Fund, OKEx's Blockdream Ventures, NGC, LongHash and Genesis Block.
Founded earlier this year, the team behind Lithium touts a plan to build a "collective-intelligence pricing oracle" specifically for relatively illiquid assets such as private equity, pre-IPO stocks. The goal is to have a blockchain-based protocol that can accurately value assets, benefitting other decentralized finance protocols and traders.
"Bringing non-public valuation data to make it accessible will be a paradigm shift. It will enable tremendous growth and innovation at Trad-Fi and DeFi's interface and pull the two worlds closer than ever," added Adrian Lai, CEO of Liquefy Labs. He added that the initial roadmap is to launch the testnet in Q3 and mainnet by the end of the year.
According to the release, the protocol works by rewarding analysts who provide accurate pricing information and punishing those who put forward inaccurate data.
Lithium Finance is the third project incubated by Liquefy Labs, a DeFi arm under Hong Kong-based investment firm Liquefy. It will initially be used to support Linear Finance, which is also incubated by Liquefy and has raised $1.8 million to build a decentralized synthetic asset exchange protocol.
"Bringing real-world assets into the DeFi space is the final frontier of crypto," said Steve Derezinski, co-Founder of Lithium Finance. "However, this can’t be realized without the right pricing oracle, and the market still hasn’t seen one that’s able to price illiquid real-world assets effectively."