Pangolin ITO (Initial Token Offering)

Overview

What is an Initial Token Offering and why do we want to offer it on Pangolin?

  • Pangolin should be the premiere destination for any new token to launch. Whether that’s an Ethereum or Avalanche token, we want to create an environment where new tokens have the best chance of succeeding by being launched on Pangolin.
  • The ITO should allow a presale, to reward early investors in the Token.
  • The ITO should allow the new Token to gain a viable amount of liquidity to ensure that after the presale is over, anyone can purchase the token.
  • The ITO should allow a sustainable economic model to increase the price of the Token, thereby rewarding early investors and the Token team.
  • PNG should become the defacto token of exchange for new Tokens.

Currently the only DEX that I’m aware of that is doing something similar is PancakeSwap’s IFO’s.

The way PancackeSwap does it is as per the below:

Buy new tokens using CAKE-BNB LP tokens.

The project gets the BNB, PancakeSwap burns the CAKE. You get the tokens.

  1. You will need CAKE-BNB LP tokens to participate.
  2. CAKE tokens equating to half of the total funds raised will be burned forever: If the full $1,000,000 USD allocation is raised, then $500,000 of CAKE tokens will be burned.

At first I thought I’d just implement it similarly to how Pancakeswap does theirs.

However I think we can do it much better than PancakeSwap.

Proposal

Let’s work through how it will work. A project decides they want to launch their $TOKEN on Pangolin. They apply for an ITO. The Pangolin team vets and reviews the application and decide the project meets the quality criteria to be launched on Pangolin.

The $TOKEN team decide on the following rules:

  • 500,000 $TOKEN will be used for the Presale
  • 500,000 $TOKEN will be used to provide Liquidity.
  • Liquidity will be locked in for a year
  • $TOKEN is valued at 0.10 USD per $TOKEN
  • ITO will run for 2 months
  • AVAX-PNG will be used as the basis for the ITO
  • Expected PGL (AVAX-PNG) at the 0.10 USD valuation to equal $100,000 USD

To keep scope creep at bay, we will exclude the following features from this phase:

  • Cross chain liquidity
  • Farming rewards

Please note: These features can be included in v2.

Walkthrough

The $TOKEN is loaded as an ITO on Pangolin’s website. The public can participate in the ITO by being Liquidity Providers for the AVAX-PNG pair and then submitting their PGL to the ITO for the length of the ITO, namely 2 months.

Please note: For simplicity we’re excluding what happens if the PGL gets more or less of the 100,000 USD.

Let’s say they get the total value of 100,000 USD after two months. The following will then occur:

  • 500,000 $TOKEN get distributed to the people that bought the PreSale
  • 50,000 USD of PNG and 500,000 $TOKEN gets added to a liquidity pool that gets locked for 1 year. This PGL pool is shared between the PreSales purchasers and the $TOKEN team 50/50.
  • 50,000 USD worth of AVAX is distributed to the $TOKEN team

The benefit of this approach are:

  • PNG becomes the defacto standard for any new Token launching on Avalanche. Thereby increasing PNG’s utility value.
  • It allows new projects to raise funds and to gain liquidity at the same time.
  • If we look at how Pangolin currently works out the price of a token, we rely on the x * y = k formula as shown below:
  • The theory goes that PNG is available in numerous pools, while the $TOKEN is only available in the PNG-$TOKEN pool. This means that the pool over the course of the year, will steadily increase it’s supply of PNG, while the $TOKEN quantity will steadily decline. This then would mean $TOKEN’s value should follow an upward price trend.

I think logically that works but I’d be very interested to hear about any holes in my logic or if I’m missing anything.

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