Lubit, the pioneer in energy price prediction markets, today announced the world’s first dedicated marketplace for predictive energy markets. Announced at E-world, Europe’s premier energy trade fair, Lubit launches prediction markets for global energy.
The Lubit team will be at booth number 4H123 at E-world.
Pre-launch signup at lubit.com/coming-soon.
Prediction markets have historically been focused on one-time events, like election outcomes or questions like “will it rain tomorrow”, but Lubit reframes this theory for repeating predictions – seeing markets as incentivised aggregators of information – across multiple energy traders prediction models, aggregated into a prediction of the future direction of the market – better than individuals are able to, applied to the high-volume, high-complexity, world of energy – starting with price, but later also volume and other types of energy than electricity.
By opening with day-ahead electricity predictions, Lubit will provide traders with a venue to compete on their predictions and monetize these – competing with incentives for the best prediction accuracy.
The democratization of price discovery
The very few currently existing “synthetic energy markets” are roughly 50 times larger than the underlying markets, and they’ve been gated by high barriers to entry, including massive collateral requirements and complex IT integrations and certifications.
Lubit seeks to bring synthetic prediction markets to global energy.
The platform eliminates the current need for posted collateral, complex master trading agreements, and clearinghouse certifications, thereby allowing market access based on analytical skill rather than balance sheet depth.
“We are not launching a trading platform in the traditional sense; we are building a foundational architecture, allowing a crowd based discovery for price information that didn’t exist until now,” said Kris Ewald, CEO of Lubit and an Economist with a background in prediction modelling. “Drawing on the Hayekian insight that markets are the ultimate aggregators of asymmetric information, Lubit facilitates the skills based on ‘wisdom of the crowd’. We are democratizing participation in a globally relevant non-cyclical asset-class, offering a pure-play prediction infrastructure where alpha is generated by skill.”
Market structure and innovation
Lubit is initially focused on 1-hour day-ahead markets. This high-frequency predictive structure forces rapid consensus on price direction and movements, generating data that aims to exceed the accuracy of traditional analyst consensus. This creates a feedback loop for the traders – contribute your prediction by buying a position and gain a high quality direction signal in exchange.
The value proposition extends beyond the trading yields. The market liquidity itself will be yield-generating as the liquidity will be made available to certified (independent) energy traders. Later, non-professionals will be able to contribute liquidity. Lubit will not initially allow any secondary trading of the derivatives.
Strategic rollout and capitalization
The announcement of the Lubit.com platform, on the back of a successful global Angel Investor round, coincides with the launch of a EUR 5 million pre-SEED funding round, validating the global relevance of Lubit’s traction. Funds will be applied towards accelerated rollout in global markets – mainly via investments in technology, compliance and partnerships.
About Lubit
Lubit, is a Swiss FinTech, and licenses its software to independent operators, aiming to become the global pioneer in compliant predictive energy markets infrastructure. The company is the first to utilize multi-participant predictions in recurring energy prices (and later volumes) not tied to any energy Options or Commodities trading. Lubit has invested heavily in the state of the art algorithmic architecture – its core asset, and in full compliance, launching via licensed partners under Mifid II regulatory compliance.
For more information, please visit https://lubit.com.
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Media contact: Lubit@transformgroup.com
Beta (non-monetized simulation game) sign up: https://lubit.com.
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