IOV Token Sale: Bonus Bid
If you have understood the Level 1 explanation of the public sale and want to secure additional IOV tokens in the event that we are oversubscribed you can place an optional “Bonus Bid”. This bid is for those participants who want an extra allocation of IOV tokens.
If you want to skip the explanation and jump directly to the “simple equations” of the allocation, you can find them here.
How do I place a“Bonus Bid” for IOV Tokens in the Public Sale?
You will need to send two amounts to the address we will provide ahead of the sale.
- Your Primary Bid — see Token Sale Level 1 explanation. Your final allocation will be assessed in our “Fairness” and “Speed” distributions.
- Your Bonus Bid — this is an optional payment in ETH to secure additional IOV tokens from Stage 3 in case of oversubscription. Your Bonus Bid is how much you are willing to pay to increase your allocation by +30% of your unallocated amount after stage 1. It is only used if we are oversubscribed, in which case it guarantees a much higher fill ratio for the highest bidders. Your Bonus Bid is fully refunded if it is not used.
For example, if we are 2x oversubscribed, after stage 1 your allocation is 25% and this is all you get if you are slow. You place a successful Bonus Bid, now you receive a kicker of 30% above the proportional share of remaining tokens, which is here 20%. Now you are allocated (20+30) x 75 = + 37.5% IOV tokens and you are allowed to buy 62.5% of your Primary Bid (instead of 25%). More explanations and full tables below.
What is a successful “Bonus Bid” ?
We look at each individual contributors’ ratio of their Bonus Bid compared to their Primary Bid, and we rank all “bonus bids” on this result. This helps us allocate “bonus bid” tokens to those that can only contribute a small amount in their primary bids. In case of equality, the fastest bidder is allocated first. Your Bonus Bid is successful if it is high enough to give you an extra token allocation before the stage 3 token supply is fully allocated.
Then what happens?
The first two stages of the public sale happen as described in our IOV Token Sale Level 1 explanation.
In addition, if we are oversubscribed and your bonus bid is successful, you will get an additional allocation of IOV tokens at Stage 3. The detail of the calculation of allocation is below.
If your bonus bid has not been successful, or if you did not need the full bonus because you had a good stage 2 speed allocation, the remaining part of your bonus bid will be refunded. Your optional Bonus Bid only pays for the extra allocation you get.
Ok, sounds good but how is the allocation calculated?
As per Level 1 explanation, there are 3 stages to allocate all the IOV tokens during the public sale:
Stage 1: Fairness and Stage 2: Speed — up to 75% of the available tokens will be allocated in these stages.
Stage 3: Bonus Bid — The remaining of the IOV tokens will be distributed in proportion to each contributors’ bonus-bid-to-primary-bid ratio and what they received (and what they did not receive) in the stages 1 and 2 allocation. If your Bonus Bid is successful, you will receive your proportional stage 3 allocation plus an additional 30% kicker. We do this to ensure that participants who really want a larger allocation can get it here.
If your Bonus Bid is not accepted (i.e. your Bonus Bid was not high enough in proportion to your Primary Bid), you will be fully refunded on this amount and will only receive your allocation based on your Primary Bid.
If you want to see the math behind the Bonus Bid distribution, we’ve provided more details in the following part of the series: IOV Token Sale: Simple Equations.
Ok, how much do I get then?
If your Bonus Bid is too low, then it is refunded to you and you receive as the table T1 below which is the same as participating with Primary Bid only.
T1: Table of minimum allocation for unsuccessful Bonus Bid
Oversubscription (left) \ Stage 2 Speed ranking (top)
For example, if we are 2x oversubscribed (200% on the left) and your contribution speed ranks between 21% and 30% (21% on the top), then you will receive 50% of your requested allocation — and be refunded 50% of your Primary Bid and 100% of your bonus bid.
If your Bonus Bid is high enough, then you will be allocated as per table T2. This is the guaranteed allocation, not a minimum.
T2 — Table of allocation with a successful Bonus Bid
Oversubscription (left) \ Stage 2 Speed ranking (top)
For example, if we are 2x oversubscribed (200% on the left) and your contribution speed ranks between 21% and 30% (21% on the top), then you will receive 75% of your requested allocation — and be refunded 25% of your Primary Bid.
You can see that if you are slow, the impact of a successful Bonus Bid is higher than if you are fast, so this is a good way to guarantee a higher allocation.
If you were faster than average, part of your Bonus Bid will be refunded as per table T3 which shows how much of the Bonus Bid is used.
T3 — Table of Bonus Bid refund
Oversubscription (left) \ Stage 2 Speed ranking (top)
For example, if we are 2x oversubscribed (200% on the left) and your contribution speed ranks between 21% and 30% (21% on the top), then you get refunded 33% of your Bonus Bid.
This shows that the faster you are, the more of your Bonus Bid you get refunded when you need it less.
On the other hand, your optional bid will be fully useful if you happen to be slow and really need to catch up on allocation.
You can see the equations of this tables’ calculations here.
So what is the best strategy to maximize my allocation?
Being fast has the largest impact. But the speed is relative to the other contributors — in order to be “fast,” there have to be more contributions after you than there were before you, and you cannot control that except trying to be really fast or by getting as many people as you can to submit their bids after you.
Once you have your Primary Bid in mind, you should check how much you are willing to pay in case of oversubscription or late contribution to get more IOV tokens with your Bonus Bid. The Bonus Bid is where you can maximize your allocation (remember the 30% kicker if your bid is successful) — and if you’re unsuccessful at this stage or you don’t need it, you will get a full refund. This is like a free option to get more if there is a high demand.
Good luck in picking your bid strategy!
Example of allocation calculation — Rounded Overview.
Let’s take the same example we did in the Level 1: Primary Bid blog post we wrote:
We assume that we are 2x oversubscribed and that you’ve sent a Primary Bid of 100 ETH and a Bonus Bid of 10 ETH.
If your Bonus Bid is unsuccessful, your bonus bid is fully refunded and your final allocation is limited to what you receive through your primary bid in the fairness and speed stages. (25–40% of IOV tokens if the contribution was slower than average, and 67–74% of IOV tokens if the contribution was received faster than average).
If your Bonus Bid is successful, and :
You were slower than average to submit your Primary and Bonus Bids during the public sale, and you have a large unfilled request, then at Stage 3, you would receive an extra +38% of IOV tokens because you receive a minimum 30% of your request, plus 8% (in this example) based on your bonus-to-primary-bid ratio.
In this scenario, your final allocation will be 63% of your IOV token allocation request, and you get refunded 37 ETH of your primary amount.
Or
You were faster than average to submit your Primary and Bonus Bids when the public sale opens, you already have a good allocation, then at Stage 3, you get an extra +17% of IOV tokens.
Your final allocation is 84% of your requested allocation of IOV tokens. You get refunded 16 ETH of your primary amount and 6.6 ETH of your bonus bid.
If you want to see the math behind the Bonus Bid distribution, we’ve provided more details in our blog post here: IOV Token Sale — Distribution Explained with simple equations.
Using this example, you see that even if we are 2x oversubscribed, when you act fast and use the optional Bonus Bid, you can get 84% of your requested allocation (vs 50% if the whole allocation was only distributed proportionally). If your contribution is slow and you don’t use the bonus bid, you are only guaranteed to get 25%. On the other hand, if your contribution is slow but you use the bonus bid, you can get 63% of what you requested, a great compensation for those who haven’t contributed fast enough.
More examples
- A- Alice wants to buy for 100 ETH of IOV tokens and does not want to miss out in case of oversubscription, so she also sends 10 ETH as bonus bid. Unfortunately, her bid is too low. Her allocation is as per the participation without bid in the table T1. She was ranked in the 25% of contribution and the public sale was 1.5x oversubscribed, so she gets 67% of the IOV tokens she asked for and gets refunded 33 ETH. She gets refunded here 10 ETH from bonus bid.
- B- Bob also wants to buy for 100 ETH of IOV tokens and does not want to miss out in case of oversubscription, so he also sends 30 ETH as bonus bid. Fortunately, his bid is successful. His allocation is proportional to his bid as described in the table T2 above. He was ranked in the 25% of contribution and the public sale was 1.5x oversubscribed, so he gets 88% of the IOV tokens she asked for and gets refunded 12 ETH. As per the table T3 above, his bid was used for 49% so Bob is refunded 30 x 51% = 15.3 ETH from his bonus bid.
- C- Charlie also wants to buy for 100 ETH of IOV tokens and does not want to miss out in case of oversubscription, so he also sends 30 ETH as bonus bid. Fortunately, his bid is successful. His allocation is as per the participation with bid in the table T2 above. He was ranked in the after 51% of contribution and the public sale was 1.5x oversubscribed, so he gets 75% of the IOV tokens she asked for and gets refunded 25 ETH. As per the table T3 above, his bid was used for 100% so Charlie does not get a refund from his bonus bid.
We are looking forward to your contributions!
If you want to see the math behind the Bonus Bid distribution, we’ve provided more details in Part 3 of the guide here: IOV Token Sale — Distribution Explained with simple equations.
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