Analysing the Angel Protocol ‘HaloSwap’ event:
Following successful allocations of 60 million $HALO on both the Starterra and Apollo platforms, the HaloSwap was Angel Protocol’s Liquidity Bootstrapping Pool (LBP) event to distribute $HALO tokens into the open market.
Why was an LBP chosen?
Unfortunately, we’ve all recently seen the shortcomings of AMM token launches: very little liquidity is provided, bots make large orders microseconds after the opening of the pool, price spikes, investors buy in after the bots and the bots dump on investors for a quick profit, leaving everyone frustrated.
The LBP is an excellent tool to counter this situation. The price is high at the outset specifically to avoid front-running. Because the end price is unknown to bots, it could prove unprofitable to buy in the first hours of the event.
As time passes and the price decreases, participants can buy the token at a price they’re comfortable with. And anyone can join in. There is no minimum or maximum amount.
Unlike with normal IDO’s, participants can also sell their tokens at any time they want. This allows for market forces to enter into play until the token price finds its equilibrium at fair market value.
The result? Well, that was intended to be fair, bot-resistant price discovery.
So let’s take a look at the figures to find out if this was the case.
To collect the figures, our friends at Flipside Crypto ran a bounty and the following data was collected from three sources. More details of that at the end of the article. Do take a look at their full work, where you can also use their interactive graphs and tables.
How many took part? And how much was raised?
During the three days, 899 unique addresses took part (and all will be able to claim a uniquely minted ‘Tales of Terra’ NFT commemorating this incredible event).
There were 2455 total transactions (purchases and sales) and 4.14M $UST changed hands. Of those, there were 2259 purchases totalling 3.24 M $UST, and the 30M $HALO tokens purchased from the pool raised 2.35M $UST.
Following the end of HaloSwap, the Loop Liquidity Pool was fed with $2 million worth of liquidity, $1 million in UST and ~13m $HALO tokens.
Importantly, 23% of the $UST raised was immediately added to the Angel Protocol charitable endowment. That’s another 530k $UST straight to a charitable endowment controlled by $HALO holders. Now YOU have the power to help allocate charitable funding where it will be most impactful, including those in need of disaster relief funding.
Did the LBP mechanism stop the bots?
The price immediately opened at $0.40 but thanks to the diligence of the purchasers and the LBP mechanism, started falling over day 1 and continued to do so into day 2. This seems to suggest that generally people did not get rekt through action of bots as with many normal IDOs and we shall come back to average purchase price later.
Trading activity during the LBP
To gain an overall understanding of trading activity during the LBP, the hourly price and cumulative net swap volume is visualised below. As was expected and indeed asked for, there was very little trade volume during the first day of the LBP.
Once the $HALO price dropped below 8 cents ($UST) on the 20th of December, there were significant token purchases of almost 500k in a single hour.
The price continued to fall during the 21st of December, falling almost below 6 cents. Towards the end of the day as the price reached it’s lowest point, trade spiked and reached almost 600,000 $UST in a single hour.
The price did not fall back below 8 cents in the last few hours of the LBP, and there was actually a net sale of $HALO tokens back into the pool, which could indicate that most participants with demand above that price had sufficient opportunities to execute their trades.
HaloSwap volume and price during the LBP
If we look at the hourly $UST volume of purchases and sales, we see that sales coincided with large purchases, as might be expected if profit taking or position reduction occurs.
What was the average price paid?
Those who bought on day 1 obviously paid more than those buying later, although DCA might have mitigated their final average price if they used that strategy.
We can see that 12 addresses paid an average of more than 0.30 $UST. These were likely to be bots. As with many of the graphs on this article, feel free to analyse the addresses you can see on the graph below if you visit the Flipside Crypto Page.
Whilst immediate profit is not the main incentive for $HALO token purchases, over 47% of the participants were in profit after the event, which is a strong result compared to those experiencing the effects of front-running bots. It is clear though that anyone taking part in LBP events anywhere else for profit reasons should not buy in the first 24 hours.
If we look at the chart below which shows price and total paid on each purchase, we see one lucky person managed to buy 1 $UST worth of tokens at 0.017, but we can see a clear ‘floor’ at about 0.06 $UST.
Distribution of HALO tokens acquired by participants
It is also interesting to uncover who the largest actors were during the LBP.
The top 10 addresses by $HALO purchase volume acquired the majority (almost 58%) of all $HALO tokens purchased during the LBP.
The top address contributed to almost 27% of this purchase volume, and exceeded all other addresses by far, likely having a significant contribution to most of the price action during the program. Indeed, the purchase & sales graph above shows that sales immediately increased at the time the large purchase went through, raising the price.
Was the HaloSwap a success?
Yes, we think so. The LBP did its job — no-one got rekt, the amounts raised mean that Angel Protocol itself can keep on giving more to charity, enable others to give more to charity over the coming years, with more being made of the sums donated to the endowments. The future of the $HALO token is firmly rooted in Governance, and the financial implications of holding $HALO are considerable.
We do want to thank the three Bounty Hunters for their work to build the charts above, do take a look at their interactive charts on the Flipside Crypto site (direct links below).
Many thanks go to:
(J) Junyuan98 — Hard LBP analysis
(A) AD — HALO Liquidity Bootstrapping Pool Analysis
(B) Bjpetkus — Halo Liquidity Bootstrapping Pools Analysis
