StellaSwap’s AVAX Initial Liquidity Offering (ILO)

5 min readJan 17, 2022

$AVAX is finally coming to Moonbeam! We’re proud to be the first DEX to support the Avalanche blockchain, allowing users to bridge their $AVAX into the recently launched Moonbeam network.

To celebrate the listing of AVAX/GLMR and AVAX/STELLA, we are organizing the first Initial liquidity offering (ILO) on 19th January 2022 at 16:00 PM UTC. You will get a chance to buy 20% off STELLA with your committed AVAX within the 24 hours window. After the ILO ends, the pairs will be listed and you can be one of the early few to maximize the APR returns!

What is ILO?

Initial Liquidity Offering (ILO) is a novel mechanism to facilitate liquidity towards the newly-launched Moonbeam network. Being the first to launch on Moonbeam, StellaSwap is one of the leading DEXs with the main aim of attracting liquidity towards Moonbeam. With an ILO, liquidity and capital from other blockchain networks — such as AVAX, Matic and more — can easily be accumulated in Moonbeam network, facilitating more efficient market pricing that will ultimately mean better prices of tokens for end users.

StellaSwap’s ILO will allow users to bridge AVAX from Avalanche blockchain and commit those AVAX into buying $STELLA at a 20% discount. After the ILO ends, StellaSwap will launch 2 AVAX pools for users to earn massive APR returns: AVAX — GLMR pool and AVAX-STELLA pool.

AVAX ILO Details

STELLA Allocated for ILO: $100,000 USDC worth of STELLA
ILO Duration: 24 hours
StellaSwap’s AVAX Bridge Launch: 18 January, 16:00 PM UTC
ILO Date & Time: 19 January, 16:00 PM UTC
ILO End Date & Time: 20 January, 16:00PM UTC
Launch of AVAX — GLMR & AVAX-STELLA Pool: 20 January, 17:00PM UTC

StellaSwap’s ILO Mechanism

For the ILO, StellaSwap will utilize the Overflow model, which facilitates a pro rata capital distribution method and refund mechanism in the event of oversubscription. This simply means that the more AVAX you commit to the ILO, the more STELLA you stand to receive, and you’ll be refunded for the remaining AVAX that wasn’t converted to STELLA. Participants are free to commit as much AVAX as they want, and their STELLA allocation will be proportional to their committed AVAX in relation to the overall total AVAX committed by all participants. Whatever AVAX remains that wasn’t converted will be fully refunded.

Let’s look at 3 scenarios for greater clarity, with a hypothetical simple assumption that 1 STELLA = 0.2 AVAX and there’s 7,000 STELLA allocated to the ILO.

Scenario 1: 100% Filled Allocation

In this scenario, the entire allocation of 7,000 STELLA is taken up by users who cumulatively invest 1,400 AVAX. If you invested 140 AVAX, you will get 10% of the STELLA allocation at the price of 1 STELLA = 0.2 AVAX, which amounts to 700 STELLA tokens. You will not get a refund since all of your 140 AVAX will be converted to 700 STELLA.

Scenario 2: Oversubscription or Overflow (Hence, the name Overflow)

Oversubscription or overflow means that there is an excess of AVAX chasing a fixed amount of 7,000 STELLA. If there is a total of 2,800 AVAX committed by all users in the ILO and you invested 140 AVAX, you will get 5% of the STELLA allocation, which means 350 STELLA tokens. You will be refunded 70 AVAX since it is unused.

Scenario 3: Undersubscription

This means that the total AVAX committed isn’t sufficient to fill the established STELLA allocation. If there is a total of 700 AVAX committed by all participants and you invested 140 AVAX, you will get 700 STELLA in accordance to the price of 1 STELLA = 0.2 AVAX. You will not get a refund since all of your 140 AVAX will be converted to 700 STELLA.

How Do I Participate in the ILO?

It’s really simple! Ensure that you have AVAX on Avalanche blockchain and you can start getting ready for the ILO! 24 hours before the ILO starts, StellaSwap will launch the AVAX bridge so users can start bridging their AVAX in preparation of the ILO. Once the ILO begins, they can start committing AVAX on the ILO page for the next 24 hours!

What is The Raised Funds Used For?

The funds raised for AVAX will be accrued to the Treasury. Since StellaSwap was launched under a Fair Launch model, there is no presale, private sale or investor allocation, ensuring that emissions are geared wholly around incentivizing the community. In order to maximize tokenholder value for the long-run, StellaSwap must accrue funds to the Treasury for grow the ecosystem and effectively manage market conditions, which include engaging in buy-backs to reduce token supply, establishing incentivization programs (e.g. Airdrops) that does not contribute to excess inflation, as well as reinvesting back into the ecosystem.

Will Tokens “Dump” Due to STELLA’s ILO Discount?

One of the design decisions that we’re bent on solving is enhancing native STELLA liquidity. A simple way to do it is increase the emission rate of native-STELLA LP farms. However, that represents a superficial way that is focused on a short-term fix since increasing emissions leads to stronger selling pressure and value dilution. What we focused on was calibrating variables to attract ‘new money’, rather than existing funds in Moonbeam. Therefore, we settled on incentivizing new money via an ILO which facilitates direct investments into STELLA token itself, and thereafter maintaining the incentive of staking through high initial APR (due to low TVL at first). This dual approach would create a higher ‘stickiness’ within our system, therefore boosting tokenholder value.

About StellaSwap

StellaSwap is the first and leading Moonbeam DEX that offers an integrated gateway to the DeFi world. Users can swap, earn, yield farm, bridge assets, explore new projects and engage in NFT trading all from a single unified platform. StellaSwap’s products are structured in such a way that facilitates decentralized governance of STELLA holders, while continuing to innovate on the collective foundations by design.