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The largest 1D0 BitDAO auction in the history of recovery: after large households participate in the first time to sell, SUSHI pool difficult to raise to the upper limit

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BitDAO describes itself as one of the largest decentralized autonomous organizations (DAOs) in the world, supporting DeFi's growth by allocating large amounts of assets and large amounts of talent.

原文标题：《复盘史上最大 1D0 BitDAO 拍卖：大户参与后第一时间卖出，SUSHI 池难筹集至上限》

原文来源： PANews

On the night of August 16, SushiSwap's MISO conducted the largest IDO ever, BitDAO raised up to $400 million in assets with 200 million BIT tokens (2%), and the total project valuation reached $20 billion. According to the official token model, about 30% of the tokens were unlocked when the project was launched. Based on the estimated IDO price of us $2, BitDAO may soon break into the top 30 with a market value of close to US $6 billion, surpassing all other exchanges other than FTX and Huobi.

As of this morning (17 August), the ETH pool, which accounts for 90% of this financing, has raised 112,767 ETH, and after reaching the ceiling, the token claim and trading is open.

Why is BitDAO attracting so much money? What interesting things happened during this fundraising?

What is a BitDAO? Where does the value come from?

BitDAO describes itself as one of the largest decentralized autonomous organizations (DAOs) in the world, supporting DeFi's growth by allocating large amounts of assets and large amounts of talent. BitDAO will work on three things: R&D, liquidity and funding.

• 建立研发中心，开发 BitDAO 核心的治理和资金管理协议，开发 BitDAO DeFi 产品，为新兴 DeFi 项目提供孵化服务等。经过治理投票，BitDAO 甚至可能开发独立的区块链。根据设想，BitDAO 未来的附属研发中心将雇佣数百人。

• BitDAO 将成为最大的资金池之一，可以为合作伙伴协议提供流动性，引导 DEX、借贷、合成资产等协议的流动性。这一过程可以理解为以自有资金进行流动性挖矿。

• 通过 Gitcoin 等赠款支持区块链技术，通过代币互换支持其它 DeFi 项目。因为 BitDAO 的规模足够大，通过少量代币即可换取大量其它项目的治理代币，从而对其它项目产生影响力，并随着其它项目的增长而发展。

So where does the value of BitDAO come from at this stage? Primarily, Bybit has pledged to donate 2.5 thousandths (2.5bps) of its futures volume to BitDAO's vault, a fee that is expected to exceed $1 billion a year and also accounts for half of Bybit's futures fees. Bybit charges a fee of 7.5bps for order consumption and offers a rebate of 2.5bps to order transaction users.

Bybit is an exchange that features cryptocurrency derivatives, according to public information. According to the statistics of Skew, the trading volume of BTC futures of Bybit is second only to Binance, and the open interest of Bybit is second only to Binance and FTX, while the trading volume and open interest of ETH are fifth and fourth respectively. In the spot trading rankings, neither CoinMarketCap nor CoinGecko ranks in the top 100, so it is true that Bybit's current competitiveness comes mainly from derivatives trading.

According to data presented on BitDAO's website, the vault now has a balance of $77.93 million, and its partner Bybit has provided it with an average of $3.4 million per day over the past seven days and contributed $3 million per day over the past 30 days. All of that could bring in $1 billion a year for BitDAO.

Even though bits cannot be used for transaction fee relief, many still see them as Taiwan dollars issued by Bybit under the DAO name to avoid policy risks.

According to BitDAO's token allocation, Bybit still holds 60% of the total BIT tokens after going through private placement and IDO and setting aside 30% of the funds for BitDAO's vault. So the external argument makes sense. In addition, BitDAO will also take advantage of its scale, using assets for investment, liquid mining, donations, etc., and will also have its own DeFi product.

Well-known organizations participate in IDO, early users can get 40% reward

According to BitDAO's token allocation, 60% of bitbits belong to ByBits, 15% can be circulated when initiated, and the remaining 45% needs to be locked up for 12 months and released linearly over the next 24 months. 30% belongs to the Treasury; 5% for private placement; 5% for startup partner rewards. That means at most 10% of the tokens will be sold.

On July 16, BitDAO announced it had closed a $230 million private equity round, according to Crunchbase, Led by Dragonfly Capital, Founders Fund, Pantera Capital, Peter Thiel (founder of Thiel Asset Management, co-founder of Paypal, and the first outside investor in Facebook). This round should correspond to 5% of the private sale portion of the token allocation, with tokens locked up for 3 months and released linearly over the next 12 months, for a total valuation of only $4.6 billion.

This MISO auction starts from 21:00 on August 16, Beijing time, and lasts until August 30. 2% of the total amount, that is, 200 million bits, will be used for auction. 180 million bits are allocated to the ETH pool and 20 million bits to the SUSHI pool. The reserve price is $1.20 and the maximum price is $2.

BIT will be auctioned in the form of Dutch auction. With the increase of participants, the auction price will gradually rise. Participants cannot redeem their funds in the middle of the auction. To compensate for the uncertainty of early participation and to motivate people to participate as quickly as possible, BitDAO divided each 10% of participation into a level where the earlier you participate, the more additional rewards you get. The top 10% get 40%, the last 10% get nothing, and the average reward is 20%. The reward will be issued in the form of Bit-ETH's SushiSwap liquid token after 90 days.

Because of the high early rewards, even if some users don't really want to buy BIT tokens, it's possible to get the 40% Bonus by participating early and selling them as soon as possible. The suitability of participating in the auction, then, is likely to depend on whether it is early enough.

Some users spent 40ETH miner's fee to snap it up, while others left the field "at a loss"

The market price of the BIT token continued to be below $2 after it was circulated, so it is certain that the early participants who quit were larger than the new buyers who entered.

For example, a user whose address starts with "0xa203" is randomly selected in the blockchain browser participates in the BIT auction with a total of 22.23ETH in two times, and finally obtains 35,515 BIT tokens, and 16.839ETH after being sold on SushiSwap. Eventually it was replaced with a 52526USDC. It is calculated that the user will sell the BIT for about 1.48USDC. If Bonus is excluded, this user loses (1-16.839/22.23) x 100%=24.25% on ETH basis.

In addition, another user entered the auction last night with 4,238 ETH and tipped 40ETH for spark pool to allow miners to package the deal as soon as possible. Other investors with more money are not paying extra for the miners.

The timing of the token issuance is controversial

Many investors had expected that BIT tokens would not be collected until after the August 30 auction, but after the ETH pool auction closed this morning, the project side opened up BIT tokens and provided liquidity for the bit-ETH trading pairs.

According to the official Medium article on the BIT auction, the explanation for the Dutch auction mentions that "the auction ends when all available tokens have been allocated."

However, in the MISO auction details, it is clearly written "Auction end time: August 30, 13:00 UTC (participants can only collect their tokens after this)".

As of 11am on August 17th, the MISO auction page showed that the BitDAO auction was still going on and could be participated in with SUSHI, but the tokens had been issued and the official liquidity provided for the transaction. Judging from the above, BIT's tokens did open for collection and trading earlier than expected.

Why is there still left over from the Auction of SUSHI Pool?

As of the morning of August 17, Bit-Sushi Pool has raised 1,608,100 SUSHI, and there is still 59.1% of SUSHI left. The bit-ETH pool had already reached its ceiling and closed its fundraising. According to the calculation of the ratio of SUSHI raised and remaining according to MISO auction, 3.93 million SUSHI is needed if it is fully collected. Based on the calculation of current SUSHI price of $13.40, these SUSHI are worth $52.69 million and only 20 million bits are sold. The unit price is approximately 31.7% above the maximum price of $2 in this financing.

According to the auction parameters introduced by the official, when the fundraising ceiling is reached, $2 corresponds to 0.0006325ETH and 0.2SUSHI respectively, which means that when the official price is calculated, ETH is valued at $3162 and SUSHI is valued at $10.

The current ETH price is close to BitDAO's, but SUSHI's price is already well over $10. If SUSHI pool reaches the threshold, the actual price will be about $2.60, much higher than the current market price of $1.72. If participants do a rational analysis, and the relative price of SUSHI and BIT doesn't change significantly, it may be difficult to raise that much for SUSHI.

Who's selling first after the launch?

On August 17 at 06:41 Beijing time, BitDAO award contract injected 19.92 million BIT and 12717ETH liquidity into SushiSwap. This price is close to the auction price for ETH.

In the same block, arbitrage robots started to appear, buying 17222BIT on Uniswap V3 and selling on SushiSwap for a profit of about 0.06ETH.

Then, at 07:07, came the first big deal. An address beginning with "0xad95" sells 50,000 bits of tokens at SushiSwap for 31.11ETH, and the transaction details page shows "Flashbots" and "this transaction bypassing the Ethereum memory pool and sent directly to the miner."

According to further observation, this user invested 66.8ETH to participate in this round of auction at 21:00:17 yesterday, and the Gas fee was 80Gwei. In the end, 106,722 bit of tokens were collected, and 65.9ETH were sold in three times.

Thus, after liquidity on SushiSwap, the first trade is arbitrage by robots. The following large transaction is the first time to participate in the large customers, after the launch of BIT all sold, waiting for the Bonus release.

conclusion

Because of the extra incentive, the price of participation is not the same for everyone. If you do not participate in the first time, you can also wait for the big customers to exit, and then look for opportunities to buy. Large players may buy in the first place purely for Bonus and sell as soon as possible after launch, with close to zero cost and a 40% Bonus after 90 days.

PANews also reminds users of the rules and parameters to be aware of when participating in an auction, for example, SUSHI is currently being sold for more than $13, but the project is still priced at $10.