Halo is the term used to describe the Luxin that builds up in Drafter's eyes as they manipulate Luxin. In all cases except the Prism, drafting is an imperfect process, changing the body in ways that the body interprets as damage, which, among other effects, is the cause of the Luxin buildup.
When the Halo completely covers the iris of the eye and bleeds into the sclera, it is referred to as "breaking the halo." When this happens, drafters must either commit suicide or surrender themselves to the Chromeria to be executed, because not long after this event, the drafter starts to go mad. It is for this reason that drafters who are close to breaking the halo often undertake the annual Freeing before they actually break it. The details of the madness depend on what type of drafter they are: they begin to embody the traits of their Luxin (e.g. blues cold and distant, reds and sub-reds become creatures of rage, greens give in entirely to the wildness and ferocity of their Luxin, etc.) Many who do not die before the madness takes hold of them become Wights, who attempt to replace parts of their bodies with Luxin.
The Halo shows the build up of luxin in different ways, though most drafters appear to have their halos filled starting at the pupils and filling outwards toward the whites of the eyes. Karris' halos are described as filling out with green, with small 'stars' of red showing her use of Green and Red luxin. Cruxer's halos are described as a horizontal bar of blue that slowly increases in width. Big Leo's halos fill from the bottom of his iris' up towards the top.