Gavel Platform Test Token IBRL Public Sale Raised Over 30,000 SOL, Market Value Once Reached $66 Million.
Written by: KarenZ, Foresight News
In the Crypto world, token distribution and liquidity guidance have always been key factors determining the success or failure of a project, often accompanied by a lack of transparency, market manipulation, sniping, and "sandwich" attacks. Currently, most token issuances on Solana adopt a joint curve model. While this mechanism can achieve initial price discovery, it has given rise to the phenomenon of "token sniping"—bots buying tokens at low prices faster than real users and then reselling them at higher prices to retail investors.
Gavel is committed to addressing these pain points through on-chain mechanisms, bringing a fairer and more efficient token issuance experience to the Web3 ecosystem. This article will detail the background and mechanisms of Gavel.
What is Gavel?
Gavel is a platform focused on on-chain token distribution and liquidity guidance, developed by Ellipsis Labs, and launched on Solana on May 20. Gavel aims to help project teams issue tokens in a more cost-effective and transparent manner while protecting users from malicious behaviors in the market (such as sandwich attacks and sniping). Gavel also assists in guiding initial liquidity for tokens and ensures fairness and security in transactions through its unique anti-sandwich AMM mechanism.
Ellipsis Labs is also the core developer of the Solana ecosystem's limit order book DEX, Phoenix, which has raised a total of $47.3 million.
In August 2023, Ellipsis Labs completed a $3.3 million seed round of financing, led by Electric Capital, with participation from Robot Ventures and Anagram. Angel investors included Solana co-founder Anatoly Yakovenko (Toly), Polygon Labs CEO Marc Boiron, and Monad Labs CEO Keone Hon. This financing aims to accelerate the development of innovative DeFi protocols like Phoenix.
In April and October 2024, Ellipsis Labs completed two rounds of financing, with $20 million raised in Series A financing in April, led by Paradigm. At the end of October, Ellipsis Labs completed $21 million in financing, led by Haun Ventures, with existing investors Electric Capital, Toly, and Paradigm continuing to participate. This financing is dedicated to accelerating the development of the verifiable finance blockchain Atlas.
Gavel AMM is a product of Ellipsis Labs' early research work. At that time, Ellipsis Labs co-founder Jarry Xiao, along with @0xShitTrader and Paradigm partners Frankie and general partner Dan Robinson, co-authored "A Sandwich-Resistant AMM," proposing anti-sandwich AMM (sr-AMM) application layer mitigations by enforcing an invariant to extend constant product AMM: any exchange transaction will not execute at a price better than the price at the start of the slot window, thus protecting traders from front-running attacks. This is also an extension of Vitalik Buterin's anti-front-running idea proposed in 2018.
How Does the Gavel Mechanism Work?
The core mechanism of Gavel is divided into the following stages:
Initial Token Distribution: Project teams can flexibly choose from Dutch auctions, fixed-price first-come-first-served, permissioned mechanisms, and other issuance methods. During the open token distribution period, users deposit SOL and receive token allocations at the end of the token distribution period. Regardless of the model used, Gavel ensures that the closing price of the public sale is completely consistent with the opening price of the subsequent AMM, eliminating arbitrage and sniping opportunities from the source. Taking the test token IBRL as an example, 70% of its total supply is allocated through a 24-hour public sale, where users can obtain tokens in proportion to their SOL deposits.
Anti-Sandwich AMM: When the initial distribution period ends, a portion of the token supply (uncertain whether all remaining tokens or part of them) and part of the raised SOL will be deposited into Gavel's anti-sandwich AMM, where the choice of SOL amount will ensure that the AMM's opening price is consistent with the clearing price of the public sale. The anti-sandwich AMM is more suitable for guiding liquidity and facilitating early price discovery while protecting traders from front-running attacks.
Temporary Liquidity Management and Liquidity Extraction: The AMM is used to guide initial liquidity, rather than providing permanent support. When the trading volume of the token is sufficient, liquidity can be gradually withdrawn to avoid permanent lock-up losses. LPs in Gavel will extract a portion of the liquidity according to a fixed schedule, convert it into tokens, and then burn the tokens (the schedule is configurable). This design meets the initial liquidity needs while avoiding asset retention issues caused by long-term lock-ups and helps maintain token value stability through a continuous deflationary mechanism.
Currently, launching a project on Gavel requires permission, and Gavel allows project teams to adjust distribution parameters according to their needs, such as token allocation ratios and distribution mechanisms. However, participation on the platform does not require permission and is fully managed by on-chain smart contracts.
Case Study: Gavel Test Token IBRL
To demonstrate the effectiveness of its mechanism, Gavel launched the test token IBRL. It is important to note that Gavel states that IBRL is only for demonstrating the operational effects of the Gavel protocol and has no actual or future utility. Its distribution and fee mechanism are as follows:
Total Supply: 1 billion tokens.
100% of the raised funds and 100% of the token supply are allocated to the Gavel mechanism.
Among them, public sale: 700 million tokens are allocated through a 24-hour public sale, where users receive tokens in proportion to their deposits.
3/7 of the raised SOL is paired with the remaining 300 million IBRL and injected into the AMM to ensure the initial price is consistent with the clearing price of the public sale.
The remaining 4/7 of the SOL will purchase IBRL and burn it according to an exponential decay schedule, buying 0.01% of the remaining SOL tokens every 1000 Solana slots (approximately 6.5 minutes). This process is autonomously managed by on-chain smart contracts.
The liquidity on the AMM will also decrease according to an exponential decay plan. Starting from 7 days after the public sale, 0.01% of the liquidity will be extracted every 2000 slots (approximately 13 minutes), with a maximum of 20,000 extractions. The extracted SOL will be immediately used to directly purchase IBRL, which will then be burned. This process is autonomously managed by on-chain smart contracts.
The team will not retain any IBRL tokens or collected SOL.
In terms of fees, no fees are charged for the initial token distribution. Gavel charges a fee of 30 basis points (0.3%) for AMM exchange transactions.
On the evening of May 21, Gavel concluded the IBRL token sale, with 2,480 participants contributing a total of 30,747 SOL. The market value of IBRL reached $66 million in the early hours of May 22, and it has since fallen back to around $30 million.
Summary
Gavel, through innovative mechanism design, helps project teams raise funds at low costs, striving for fair distribution, eliminating sniping opportunities, and creating a fair, efficient, and user-friendly token distribution and liquidity guidance ecosystem through liquidity management and token burning mechanisms.
For project teams, Gavel maximizes fundraising efficiency and avoids value capture by intermediaries; for ordinary users, it provides a fair participation channel, free from price exploitation by bots; in addition, all operations are fully on-chain and auditable, strongly promoting the transparency process in the industry.
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