Mechanics of the THX Token Launch Auction, 22nd of Nov. — 5 Dec. on Copper + Polygon ⚙️👷♂️👷♀️
This week we shared the exciting news of the upcoming $THX launch. Next we dove into the inner workings of THX Network and the basic tokenomics (part I), followed by (part II) explaining the details of token distribution, release schedule and governance.
Now it’s time to explore the background and details of the upcoming token launch. ⏱️ Make sure to stay tuned for our final piece before the start of the Token Launch Auction: the ‘How-To’ participate guide.📝
22 Nov. – 5 Dec. 2021; THX token launch! 📅
The THX token is the driving force behind the THX Network protocol and gives token holders voting control over the THX protocol’s parameters and future improvements, as well as the potential right to claim protocol fees.
The THX token is launching the 22nd of November 2021 will be live for 14 days on the Copper Token Launch Auction platform, it’s the world’s first Polygon-sidechain powered launch using Balancer pools.
What is a Token Launch Auction? 💱
In essence a Token Launch Auction is a so called ‘Dutch Auction’, which in various forms has been around for hundreds, if not thousands, of years. The basic set up is that the price of the asset that are being sold starts high and descends until a buyer is found. These types of descending-price auctions were used in 17th-century Holland for estate sales and paintings, and possibly even earlier in ancient times in the region of Babylon (current Iraq).
Nowadays, using the power of blockchain technology, we can perform these type of auctions online. Key benefits for participants are;
- fair price discovery; you can buy into or sell out of the auction at any time
- open participation; anyone can participate, for the amount they want
- no competition with transactions fees; everyone has plenty of time to participate, you don’t have to set ridiculously high blockchain transaction fees to be able to buy
Behind the scenes, from a technical perspective , the THX token launch auction is a special configuration of Balancer’s Liquidity Bootstrapping Pools (LBPs). The Copper platform, a product by Alchemist, provides a beautiful front-end to these type of auctions.
Copper has an excellent help article which offers more details about the benefits of a Token Launch Auction and gives examples of various stages of the auction a buyer might encounter. Make sure to check it out!
THX Token Launch Auction settings 🛠️
Now for the good stuff. The THX auction settings are as follows;
- start weights 10% USDC / 90% THX
- end weights 80% USDC / 20% THX (*adjusted from original 90% /10% setting on 21 Nov.)
- tokens pooled 125.000 $USDC and 10.000.000 $THX (see full distribution in tokenomics part II)
- duration 14 days; starting 14:00 CET 22 November 2021 — till afternoon CET 5 December 2021
- starting auction price of approximately ~$0.11.
- swap fees 0.95%
Below an example from another project on how the pool will look on Copper just before launch. The price is configured to fall until there is buying activity.
Remember you don’t have to participate right at the start of the auction, you can buy tokens anywhere during the 14 day window. For reference, below you see the same project after the completed launch.
The price indeed followed the dropping curve at first, becoming lower than the starting price. However after the first day buying activity increased slowly, increasing the price towards the end of the sale.
Liquidity after launch: 80/20 Balancer Pool ⚖️
Now, an important fact: the funds raised from the Token Launch Auction remain on-chain to provide early stage liquidity for the THX Network community. 🙌 That’s right… the core team doesn’t use the funds raised in the Token Launch Auction in any shape or form.
About 80/20 Balancer pools
The 80/20 ratio in a Balancer pool is considered an optimal configuration for a newly launched token. For people deciding to join the pool (which of course isn’t mandatory) it minimizes impermanent loss risks while offering benefits of providing liquidity such as earning trading fees.
Transfer of funds after the token launch
So how does the transfer of funds to a new pool work exactly? After the Token Launch Auction is finished that pool is frozen, meaning no trades can be performed against it. Then, within one day, the following steps are performed;
1) All liquidity in $USDC and $THX is withdrawn (by our multisig signers)
2) $USDC funds are matched with the corresponding amount of $THX from the Community Treasury to maintain the closing Token Launch Auction price
3) An 80% $THX / 20% $USDC is created on Balancer (on Polygon)
The $USDC in step 2) is the same USDC from the Token Launch Auction, minus initial seeding liquidity and swap fees which go back to our liquidity provider.
The end result is a permanent source of liquidity for the THX token and its holders. In addition, a Balancer pool gives the community possibilities to set up liquidity mining incentives, if needed, and also engage with the Balancer community and its DAO and its active community members, called ‘Ballers’.
Sign-up for email updates — 1000 $THX airdrop 📥
As a token of appreciation for those who wish to stay in touch we’re giving a 1000 $THX incentive for users who sign up to the email list. After leaving your email address on our website you’ll receive a link to a form in which you can submit the Ethereum/Polygon address that you’ll use to participate in the token launch.
Participants in the Copper launch for a minimum of 75 $USDC using the *same* Ethereum/Polygon address will receive the airdrop in Q1 2022.
We value your privacy. We can’t match clicks with form submissions so there is no link between your email address and your blockchain address known to us.
About THX Network
When receiving something nice, the logical reply is “thanks”! That’s why we created the THX Network, a blockchain-powered protocol that allows you to create and embed your own tokens in any app or website, without breaking your brain or bank.
Use cases include loyalty programs, the offering of collectibles by creators, cashbacks, and engagement incentives.
The United Nations Development Programme (UNDP) uses THX Network to reward engagement on their employee and policymaker platform called SparkBlue. Over 70.000 transactions and counting have been performed on behalf of UNDP users using THX Network’s infrastructure!
Let’s meet in our communities
Discord 👾
Twitter 🐦
Or get in touch
Email our team 📧
Schedule a demo ▶️
Investment pitch deck (PDF on Google Drive) 💹
Other resources
Developer docs 📋
Code on Github 🛠️
Audit report 🕵️
Integrations with Slack, Discord and Drupal 🔌
