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The Traveler is a mysterious sphere floating above Earth. Legends say the Traveler sacrificed itself to save humanity. The mysterious sphere still hangs where it made it's last stand. Humanity built a city beneath the Traveler to keep itself safe, and then slowly began to rebuild. It is believed that the Traveler gives humanity power to use magic.
Trivia
The Traveler first appeared in Bungie's previous game Halo 3: ODST, where a hidden poster made it appear innocuously like the Moon.