$HALO Tokenomics & Governance – Update

The rationale behind the introduction of a utility token in the design of Angel Protocol is threefold:

  • We believe that DAOs are more aligned with our ethos than centralized structures. Governance tokens provide the fantastic opportunity to directly involve key stakeholders in the construction and development of the protocol: charitable organizations, donors and passionate supporters.
  • A token enables us to get charities closer to their supporters. We transform the one-sided donation transaction into a much deeper and more durable relationship between a charity and the people that care about them.
  • Incentive alignment creates a flywheel for social impact.
    • At each donation, donors receive a staked charity share of the charity recipient of their donation, entitling them to a share of the charity’s endowment yield, encouraging them to spread awareness to more donors.
    • Charities benefit from staking as it signals curation for a charity, raising their visibility and encouraging them to be engaged and transparent with their communities to attract more stakers.


Governance: The DANO (Decentralized Autonomous Non-Profit Organization) #

Governance plays a central role in the vitality of Angel Protocol. The DANO ensures that donor funds are safely passed on to charities and, in the case of UN Sustainable Development Goals aligned Indexes, that the donations are distributed equitably and predictably among charities.

The DANO must operate with the utmost transparency and accountability, as would be expected from any charitable organization. To accomplish this, all DANO governance happens on-chain, eliminating opportunities for fraudulent activities.

The DANO has a structure inspired by charitable organizations. A Board of Directors is elected on-chain by token holders for a set term. The role of the Board of Directors of the DANO is to provide strategic guidance, settle arbitration, and nominate officers who will be responsible for day-to-day operations.

The Board of Directors oversees the financial aspects of the DANO’s operations and publishes annual reports. The Board of Directors is also responsible for creating a charity screening committee to review applications, perform due diligence and validate the charities included in the Indexes.

To take part in the governance of Angel Protocol, token holders stake the DANO’s native token $HALO directly to the charities of their choice, via charity sub-DAOs.

In an effort to ensure $HALO is held in charitable hands, the primary means of $HALO distribution will be through bootstrapping charitable giving; when funds are donated to a charity, the donated funds are matched with $HALO of a proportional value, for both charities and donors.

Stakers of the Angel Protocol $HALO token have veto power over any of the decisions taken by the Board of Directors mentioned above. In the case where malicious activity is suspected to take place on the network, token holders benefit from special “injunction proposal” rights over any Board Member, Officer, decision, charity or yielding asset, whereby a special procedure is triggered to determine if the proposal is valid and to offer fast arbitration and injunction action if necessary.

At the time of writing, token holders have a direct influence on more than 50 parameters of the DANO and this number can only increase as the governance gains in sophistication.

Staking through charity Sub-DAOs #

Each charity benefits from the creation of a sub-DAO. As well as enabling the donor to take part in the governance of Angel Protocol, staking $HALO through a charity sub-DAO means that charities benefit even further. Generally speaking, more tokens being staked to a sub-DAO equates to:

  • Increased visibility on Angel Protocol’s Charity Marketplace
  • A higher chance to be included in the Charity Indexes
  • Capturing a higher portion of protocol fees originating from Angel Impact Funds

$HALO token holders have exclusive rights to participate in governance decisions for those charities with which they have staked. Such governance decisions include charity-created proposals and strategic direction.

$HALO token holders are rewarded with 50% of the fees generated by the endowments of the charities they support by staking. To avoid a concentration of tokens staked to the charities generating the most fees, and to encourage staking to lesser-known charities, we’re implementing staking through sub-linear bonding curves and a locking mechanism. More details on this subject are provided in the next section.

Above all, charity sub-DAOs create a privileged space to exchange ideas and organically create a strong sense of community between a charity and its base of supporters.

Treasury #

50% of the fees generated by all Angel Impact Funds and Charity endowments are automatically transferred to the Treasury. The remaining 50% is paid-out to stakers & charities through a mechanism described further below.

Fees are then sent to the Opex Reserve account, controlled by the officers of the DANO and designed to cover the costs of DANO day-to-day operations. The budget of the DANO is set on-chain.

Once the Opex Reserve has accumulated enough fees to cover the budget of the DANO, all remaining fees are transferred to the Angel Protocol Endowment, an Angel Impact Fund owned by the DANO.

The role of the AP Endowment is to collect automated donations from the Angel Alliance as well as other uncategorized donations and distribute them to charities according to a DANO-defined strategy. Collected funds are invested in yield-generating financial products. Like charity endowments, a portion of the yield is distributed and the remainder is re-invested to grow in perpetuity.  

Note: You can find here a detailed version of the initial paper of our Tokenomics, published by Delphi Digital.

General Architecture #

  • Angel DANO: The main governing body of the protocol, responsible for overall protocol governance and regulating incentives among all stakeholders.
  • Charity Marketplace: The front-end acting as the front page of charitable giving. Scarce space available for charities on the Charity Marketplace is determined by the Angel community.
  • Charity DAOs: Each charity is governed by their respective charity DAO, responsible for charity-level governance decisions.


Token Design #

We set out to design a token that captures value for the main stakeholders of the Angel Protocol ecosystem; namely charities, donors, and stakers. Our goal is to incentivize the actions of curating, donating and governing whilst allowing participants to benefit in the upside as the endowment grows over time.

  1. Donors: Those who make donations to charities on Angel Protocol
  2. Charities: Entities or individuals who receive donations from donors. Charities set up through perpetual endowment accounts which receive donations from donors. These accounts are goverened by the Charity DAO.
  3. Charity Supporters/HALO Stakers: Those who support charities by staking HALO, participating in curating charities for the charity marketplace and charity indices as well as governeance decisions.


Token Curated Bonding Curve Model #

In order to do this, we’ve implemented a prediction market style design, borrowing a concept from The Graph: a bonding curve based token curated registry.

At a high level, users can interact with a bonding curve of a particular charity by staking $HALO tokens into the bonding curve’s reserve pool. When they stake, the bonding curve mints the corresponding amount of Charity Shares (CS) for the user based on the pricing algorithm. A rational curator will signal $HALO toward charities they would like to back, and/or charities they predict will generate the most yield.

Charity Shares can always be exchanged back through the bonding curve for $HALO tokens in the bonding curve’s reserve pool. To prevent gaming of the bonding curve, an unstaking period will be instituted when redeeming $HALO tokens. This will initially be set at 21 days.

Staking HALO Tokens

  • HALO holders can deposit HALO into a selected Charity’s bonding curve in exchange for Charity Shares
  • The ratio of Staked HALO to Charity Shares is determined by a pricing algorithm


Redeeming HALO Tokens

  • Charity Shares can be exchange for HALO tokens
  • The number of HALO tokens redeemed per Charity Share is determined by a pricing algorithm

Token Curated Bonding Curve Formula

The bonding curve formula determines the amount of HALO (Price) needed to purchase or sell a Charity Share. As more Charity Shares are minted / in circulation, the price of Charity Shares gets incrementally more expensive in HALO terms. HALO tokens deposited into the bonding curve are kept in a communal pool owned by holders of Charity Shares. A Charity Share can be withdrawn from circulating supply and the corresponding number of HALO tokens will be redeemed in exchange. 

For the Angel Protocol, the team adopted the Bancor bonding curve formula:

  • Reserve Token: Refers to the token staked into the bonding curve, in this case HALO.
  • Continuous token: Refers to the token received in exchange for staking the reserve token, in this case, the Continuous Token refers to the Charity Share.
  • Continuous Token Price: Refers to the cost of Charity Shares in terms of HALO. 
  • Reserve Ratio: A fixed ratio between the Charity Share’s total value and the total value of HALO in the reserve pool.  The Reserve Ratio is constant as the Reserve Token and Continuous Tokens’ value fluctuates with sales and purchases. 

The Reserve Ratio determines the price sensitivity of the CS. A higher reserve ratio will result in lower price sensitivity, meaning that each buy and sell will have a less than proportional effect on the Continuous Token’s price movement. Conversely, a lower ratio will result in higher price sensitivity, meaning that each buy and sell will have a more than proportional effect on the Continuous Token’s price movement.

Each purchase or sale of CS triggers an increase or decrease of HALO balance in the pool. The price of the CS in terms of HALO must continually readjust to maintain the fixed Reserve Ratio between them. 

Charity Bonding Curve: pricing Charity Shares example #

The direct transfer of value from charities’ endowment fees to token holders through yield creates a situation where token holders could be incentivized to only stake to the largest and richest charities for financial gain.

To remedy this situation, the Protocol will use concave (or sublinear) bonding curves. Concave bonding curves reward stakeholders who support charities early on, while limiting the upside of rent-seeking agents that stake against established charities for pure financial gain.

Should the Reserve Ratio for each charity’s bonding curve be set at 70% at genesis, the pricing formula would translate into:

Price of charity share supply VS charity share supply  #

Integrating the price formula gives the number of HALO needed to mint or redeem a given amount of charity shares. In the diagram below, to buy k charity shares given a supply of s, one must integrate the bonding curve formula to get the price in HALO for k tokens.

Price for purchasing k charity shares (price in $HALO) #

Locking mechanism #

To further discourage mercenary staking and augment the effect of curation, we have implemented the option for charity curators to lock their $HALO for longer than the default lock period (21-days) and get an increased power of curation in exchange.

A. Locking $HALO

Locking $HALO is a two step process that requires depositing $HALO into a charity’s bonding curve and locking the resulting charity shares.

Nomenclature: charity shares are denominated CS-#### (#### being the last 4 characters of a charity’s endowment address OR an internal code related to the name, like stock names). Users never see this nomenclature, unless they look at balances in their wallet

Locked charity shares are denominated loCS-####, as in “locked charity share”. 

Example: Alicia is a lifetime supporter of 5Gyres and wants to support them as much as she can. She decides to buy 1,000 $HALO and deposits them into 5Gyres’ bonding curve. She gets 500 CS-5GYR in return (due to the effect of the bonding curve). She then locks her CS-5GYR through the locking contract and gets a balance of 1,500 loCS-5GYR.

The locking parameters are as follows:

Minimum: 3 weeks 

Increments of 1 block

Maximum: 156 weeks (3 years) 

Note: Locked Charity Shares are not tradable tokens and exist only as a balance in the locking contract.

B. Properties of locked charity shares

Multiplier: locked charity shares (loCS-charX) provide a multiplier to the weight of the curation provided by staking $HALO to a charity. This multiplier is equivalent to the duration, in years, for which the tokens are locked for at any point in time, plus one. 

Multiplier = Locking Period (in years)+1

Example: one charity share locked for 5 months (0.4 years) provides a multiplier of 1.4 and locking one charity share for 27 months (~2.2 years) provides a multiplier of 3.2.

Decay: Every block, 1/Total estimated number of blocks Charity Share tokens unlock and become claimable by the staker. As an effect, the multiplier decreases for the remainder of locked Charity Shares 

Example: Today, Sophie deposits 1,000 $HALO into a charity’s bonding curve contract and receives 500 Charity Shares in exchange. She decides to lock all of those charity shares for 16.8 months (~7.3 million blocks). Her multiplier is 2.4 (16.812+1). In 3 months (~1.3 million blocks), Sophie will be able to claim 178 Charity Shares and her multiplier will have decreased to 2.1. She can choose to re-lock/re-allocate those Charities Shares again or un-stake them and receive $HALO back.

Curation Weight: the Curation Weight is the balance of locked charity shares of any given $HALO staker, defined as the total sum of the product of $HALO to time locked remaining:

Curation WeightStaker X, Charity A, t = i#(HALO)i × multiplieri, t

Example: 2 months ago, Alicia locked 1,000 CS-charA for 7 months into Charity A’s bonding curve. 1.5 months ago, she locked 1,000 CS-charA for 11 months. One month ago, she locked 1,000 CS-charA for one month. Today, she locked 1,000 CS-charA for 12 months. Her Curation Weight is calculated as follows:

1,000 x (712+1212) = 1,000 x (512+1) = 1,417 

+ 1,000 x (1112+11.512) = 1,000 x 9.512 = 1,792 

+ 1,000 x 0  = 0 (unlocked charity shares are not counted) 

+ 1,000 x (1212+1) = 2,000 

= 5,209

Alicia’s Curation Weight for Charity A is 5,209

Re-allocation: Every 21 days, stakers have the right (but not the obligation) to re-allocate their locked charity shares to another charity. 

This right is not cumulative, i.e., if a user did not exercise their right during the last 21-day period, they are not granted 2 rights to re-allocate their locked charity shares and can only reallocate charity shares granted during that period.

C. Properties of locked charity shares (CONT’D)

Governance rights:

Voting weight in the DANO provided by locking to charity A for any given staker is determined by the sum of CS-charX and loCS-charX held by the staker, divided by the sum of all CS-charX and loCS-charX.

Example: Charity A’s bonding curve has a $HALO reserve of 60,000.

Charity A has a total balance of 40,000 locked charity shares with an average multiplier of 2.0 and 10,000 unlocked charity shares.

Cassandra has a Curation Weight of 6,000 for Charity A thanks to her 2,000 locked charity shares (multiplier of 3.0). She also owns 1,000 unlocked CS-charA.

Cassandra controls 14% ((6,000 + 1,000)(40,000 + 10,000)) of the voting power of charity A, or the equivalent of 8,400 $HALO, an increase of voting power of 2.8x over her 3,000 original charity shares, thanks to the locking mechanism. 

By extension, the network voting weight of any given staker is provided by the sum of this staker’s voting weights across all charities they’ve staked to, divided by the total number of $HALO staked:

Example: Charity A’s bonding curve has a $HALO reserve of 60,000. Charity B’s bonding curve has a $HALO reserve of 50,000. Charity C’s bonding curve has a $HALO reserve of 40,000. There are no other charities on the network. Total staked $HALO is 150,000.

Cassandra has a voting weight of 14% for charity A, a voting weight of 2% for Charity B and a voting weight of 6% for Charity C.

Cassandra’s voting power is equivalent to 11,800 $HALO (0.14 x 60,000 + 0.02 x 50,000 + 0.06 x 40,00) and her voting weight across the network is 8% (11,800150,000).

D. Unlocking & unstaking

Never-locked charity shares: charity shares that have never been locked are subject to a 21-day unstaking period upon user’s request to unstake. 

Locked charity shares: Once locked charity shares unlock, they are available for the user to unstake at any time, with no unstaking period.

Ragequit: stakers have the possibility to unlock their charity shares at any point in time incurring a penalty of 50%.  When the Ragequit mechanism is used, the user gets $HALO.

Example: A month ago, Theresa bought 1,500 $HALO and staked them to Charity A. She obtained 1,000 charity shares of Charity A in return. She locked 900 of her charity shares for a year.


  • Theresa has 100 charity shares that she never locked. If she decides to unstake them to get $HALO, she has to wait a 21-day unstaking period.
  • Theresa has 75 (900/12) unlocked charity shares. She can unstake them to get $HALO at any time.
  • Theresa has 825 locked charity shares for 11 more months. She can unstake them today with a 50% penalty. If the price of Charity A charity shares is 1.5 $HALO and Theresa unstakes 400 of her charity shares through Ragequit, she would receive 300 $HALO
    (400 × 50% × 1.5)


Charity Shares resulting from the Ragequit penalty are burned, resulting in increased charity shares value for remaining stakers & charities.

The Curation Score #

A. Uses of the Curation Score

The Curation Score is used to determine, of all the charities, which ones should be entitled to i) higher visibility on the Charity WebApp, ii) automated donations and iii) share of rewards corresponding to 50% of the fees generated by Angel Impact Funds (hereinafter the “Extra Rewards”):

  • Higher visibility on the Charity WebApp

The Curation Score determines which charities are included into SDG indexes. The 17 SDG indexes are composed of 10 charities each. On each SDG row of our charity marketplace results are displayed by decreasing order of Curation Score.

  • Automated donations

One SDG index at a time is considered “active”, i.e. it receives automated donations coming from the Angel Charity Alliance members (incl. LFG). Once a monetary threshold of donation amounts has been reached, the next index becomes active and starts receiving automated donations.

  • Extra rewards share for stakers


See section “Extra rewards share for stakers” below.

B. Charity Weight

A Charity Weight is the Sum of the Curation Weights of all its stakers:

Example: Charity A has 3 stakers: Sophie, who staked 1,000 $HALO with a Curation Weight of 1,000. Alicia, who staked 4,000 $HALO with a Curation Weight of 5,209 and Jesse, who staked 10,000 $HALO with a Curation Weight of 3,791.

Charity A has 15,000 $HALO deposited in its bonding curve and a Charity Weight of 10,000 (1,000 + 5,209 + 3,791).

C. Curation Score

The Curation Score of any given charity is the Charity Weight (or total balance of locked charity shares) + the total number of unlocked charity shares, divided by the TVL of its endowment.

Example: Charity A has a Charity Weight (or a balance of loCS-charA) of 10,000 and 5,000 unlocked CS-charA. It has a TVL of 150,000 $UST. Charity’s A Curation Score is 0.1.

D. Interpretation

The Curation Score has been designed with two objectives in mind:

  1. Highlight those charities that have a high number of engaged supporters through the Charity Weight as numerator
  2. Mitigate the impact of significant sized endowments capturing the majority of Angel Alliance funds, as it is assumed that a large number of stakers will naturally flock to them as, similarly to LP positions, only large charities will be able to accommodate yield for many stakers.

A high Curation Score means that a charity overwhelmingly benefits from the support of many engaged, locked stakers that are willing to accept a lower APY because they support the charity (or financially-oriented stakers that believe in the growth potential of the charity), which is a positive signaling for the purpose of curation.

A balanced Curation Score (i.e. assuming a balanced number of stakers accepting the expected market risk under efficient market conditions) means that a charity does not attract overwhelming interest (or financially-oriented stakers that do not make outsized bets in the growth potential of the charity), which is not positive signaling for the purpose of curation.

Conclusion: charities with the highest curation score should benefit from special highlighting on the platform & automated donations.

Extra rewards share for stakers #

A. Purpose and origin of funds

The purpose of the Extra Rewards for stakers is to incentivize curation by providing additional rewards to stakers, in addition to the share of the charity fees they are entitled to as stakers.

The Extra Rewards are collected from all Angel Growth Funds.

Angel Protocol collects a fee, set at 20% of yield generated, 50% of which is sent to the Angel Protocol Treasury. The other 50% are sent to a smart contract that is used to distribute the Extra Rewards to $HALO stakers that have locked their charity shares.

B. Distribution 

  • Distribution to stakers


The Extra Rewards are directly distributed to stakers according to their total loCS balance:

Example: Alicia has a Curation Weight of 5,209 for Charity A, a Curation Weight of 3,791 for Charity B and a Curation Weight of 1,000 for Charity C. Charity A has a Charity Weight of 40,000, Charity B 30,000, Charity C 20,000 and Charity D 10,000. There are no other charities on the network.


Note: It might be useful to remind the reader that Curation Weight Staker (X, A) means the balance of locked Charity A charity shares held by staker X at any point in time and that ΣCuration Weight Staker (i,A) means the total balance of locked Charity A charity shares held by all stakers to Charity A at any point in time.

  • Charity commission


In order to make charities benefit from the locking mechanism and introduce a direct correlation between the number of charity shares staked and extra revenue for a charity endowment, we have introduced a “Charity Commission” of 20% on all amounts of Extra Rewards distributed to charity shares lockers.


Rights granted by locked and unlocked charity shares

The rights provided by locked and unlocked charity shares are summarized in the table below:

Value flows

Yield to stakers is distributed via buyback and deposit of $HALO into the bonding curve. The corresponding CS obtained will be burnt, accruing value to existing charity shareholders as they can now redeem more $HALO per share. Additionally, the burning of CS tokens effectively increases the floor price of the bonding curve, de-risking staking to a degree.

Charity A Stakers via Bonding Curve

  • $HALO is bought on the open market and deposited into Charity A’s bonding curve in exchange for Charity A’s shares.
  • These shares will be burnt, accruing value to outstanding Charity A share holders


Angel DANO

  • To the DANO’s Treasury waterfall


Charity A’s Endowment

  • Reinvested into the Charity A’s endowment to increase the principle amount, promoting the sustainability of interest cashflows in the long run


Charity A

  • Majority of the yield is distributed to Charity A


Liquidity mining program / donation matching 

We propose an incentive program with the objectives of bootstrapping usage of the platform, growing donations and TVL in the bonding curve, and encouraging broad distribution of the token to key stakeholders.

To bootstrap charitable giving, donations through Angel Protocol will be matched with the proportional value of $HALO and deposited into the charity’s bonding curve.

  • Unlike most liquidity mining programs where rewards are released pro rata per block, SHALO rewards are deposited into the bonding curve as often as donations come in.
  • A portion of charity shares received will be distributed to the Charity and Donors, while a portion will be burnt, indirectly benefiting early stakers
  • 40% of Charity Shares minted will be distributed pro ratato donors, with a lock up of 21 days.
  • 40% of Charity shares will be distributed to the charity and periodically disposed.
  • The remaining 20% will be burnt, benefitting early stakers who now have the option of exchanging their Charity Share for more HALO than before


Disposal of charity shares for charities

As charities might not have experience dealing with crypto tokens and protocols, the disposal and monetization of charity shares received from the liquidity mining program will be done programmatically by a smart contract. The proceeds from the disposal of charity shares will be reinvested to the Charity’s perpetual endowment account, for further yield generation.

  • Charity Shares distributed to the charity via the rewards distribution program from the liquidity mining program will be staked into the Charity’s bonding curve.
  • Charity Shares will be disposed of, provided that certain conditions are fulfilled.
  • Eligible Charity Shares will be unstaked and converted into HALO, and HALO will then be converted into stablecoin and sent to the Charity’s endowment account


Condition for disposal:

  • The average ‘cost’ price of the charity shares will be calculated periodically
  • f the price to dispose the Charity’s CS is 10% above the previous period’s average cost price, up to 10% of charity share tokens the charity holds will be disposed of
  • E.g. If disposing 5% meets the profit requirement but 10% does not, then 5% will be disposed of instead. However no more than 10% of the CS can be disposed per period


These conditions are set in place to prevent “dumping” on stakers in the bonding curve, while also allowing charities to benefit from the liquidity mining program








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