Purpose

The Angel Protocol Validator currently has over 1.3 million Luna delegated, and collects 100% of the rewards as commission. Historical analysis of commissions generated by the Validator, as well as forward looking insights are therefore becoming increasingly valuable to the Angel Protocol's management.

This dashboard provides insights and analysis into three relevant issues for the Angel Protocol:

• the USD value of rewards accumulated by the Angel Protocol Validator over time
• donations made from the Validator rewards to different projects
• forecasting future donations over the next year.

Approach

Determining daily and cumulative validator rewards

All reward transactions were obtained from Flipsides terra.transitions table, with the following data processing steps taken:

• finding all commission transition transactions at the end of each block for the Angel Protocol Validator (terravaloper1hqyygjq0vdqk0xdpkffgamzr4f7tqqg5u9mg66)
• multiplying the amount of each currency received as commission by its daily USD price
• summing the value of commissions received for each day.

Since the Angel protocol takes 100% rewards as commission, the two are assumed to be interchangeable amounts.

Determining donations made with validator rewards

The amount of rewards already donated was determined by classifying transactions that have been sent from the Angel Protocol's Validator wallet (terra1g0uzl468etgkx0gkts42mg7ly6waqkemw89lsh)

Forecasting future validator rewards

Future rewards (or commissions) generated by the Angel Protocol validator were simulated based on assigning probabilities to the future values of LUNA prices, Validator Delegations and annual staking yield over time.

The central assumptions were:

• LUNA price - between $10 and $200 with 90% probability by December 31st 2022
• Validator Delegations - between 1 and 2 million with 90% probability by December 31st 2022
• Staking yield - between 5 and 15 per cent with 90% probability by December 31st 2022.

Values before that date are linearly interpolated, and adjusted by randomly sampled daily variations based on historical data.

A standalone interactive web-tool developed for this purpose is availabe at https://andvis.com/Flipside/Validator_prediction.

The chart below visualises the USD value of rewards generated from the Angel Protocol Validator both on daily and cumulative terms.

• A total of 730,000 USD has been generated from Validator commission. (This reflects the USD value at the time the rewards being generated.)
• There has been exponential growth in the value of rewards (and therefore commissions), which is due to both the increase in value of LUNA and the amount of delegations to the Angel Protocol Validator.

Delegations and Luna prices are also visualised in the following chart for reference.

Rewards accumulated by the Angel Protocol Validator

Donations made from Validator rewards

The table below summarises the identifiable transactions that were sent from the Angel Protocol Validator wallet for charitable uses.

• The majority has been made to the Restore Earth campaign ($380,000 USD), with the rest sent to the Angel Alliance wallet (which will presumably be sent to specific charitable organisations).
• The remainder has either been used to cover expenses, or for other donations that were not readily obvious through inspection of transaction data.

Forecasting future validator rewards over the next year

Future rewards (or commission) generated by the validator are highly uncertain and depend on future LUNA prices, LUNA delegations and staking yield. Future commissions were simulated based on the following simple assumptions:

• LUNA prices - ranging between $10 and $200 with 90% probability by December 31st 2022

• Validator Delegations - ranging between 1 and 2 million with 90% probability by December 31st 2022

• Staking yield - ranging between 5 and 15 per cent with 90% probability by December 31st 2022.

• All variables linearly declining from their current values over time.

A screenshot from the model is shown below.

You can test alternative assumptions and generate your own forecasts through the interactive tool here: https://andvis.com/Flipside/Validator_prediction.

Findings

• The Angel Protocol Validator has seen a significant increase in delegations since July 2021. At the same time, LUNA prices have risen by a factor of 20 over the same period.
• These trends have led to commissions rising exponentially, with a total of $730,000 USD generated between July 1st and December 23rd.
• While future LUNA prices, validator delegations and staking yields are inherently uncertain, we could see total commissions over the next year ranging between $1.8 and $38.6 million.

Based on these assumptions, total commissions generated in 2022 are estimated to:

• be $9.9 million on average
• fall between $3.8 and $18.3 million in 90% future scenarios assessed.
• fall between 1.8 and $38.6 million in all scenarios assessed.

There are many other possible future scenarios not assessed in the analysis(both with worse and better outcomes).

• For example, if LUNA prices were to drastically fall next year without recovering, total commissions would be very low.
• The opposite is also true, if LUNA prices were to significantly break out to a higher value (or at a much fast rate) than assumed, total commissions would be far greater.