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Crypto: A Quick Review of ILLUVIUM's ILV Tokenomics

Updated: Aug 25

Recently, Illuvium has received lots of attention in the crypto space so much that Index Coop (a team that comes up with ETF kinda tokens) added $ILV as the second highest allocation in their Metaverse token $MVI.


I thought the listing was really interesting so I wanna discuss about $ILV's tokenomics in this post.



What is $ILV token?

  • Basically a governance token

  • Used for voting proposals

  • or put up IIPs (Illuvium Improvement Proposals) and ICCPs (Illuvium Configuration Change Proposals).

What's the difference between the two proposal types?

According to Illuvium docs, IIP is meant for proposing changes to the Illuvium system (new smart contracts, new system, expansions, characters sets etc.) whereas ICCPs is for modifying the system parameters (marketplace fees, capture mechanics, balance changes etc.)


It is a lil different from the usual governance we see in DeFi.


Use case for $ILV token: Staking

Screenshot from Illuvium
  • Either single-sided or ETH pair are available for staking

  • Option to lock staked $ILV for a certain duration (12 months max). The longer the duration, the higher the weightage (no lock up is 1, max is 2) so higher APY

  • Rewards are escrowed for a year (similar to Synthetix)

  • Alternatively, stakers can redeem their escrowed $ILV rewards for $sILV on a 1:1 ratio

  • Most importantly, game revenue is redistributed to stakers. More details will be released when the game launches.

In case if anyone is wondering how much revenue can a crypto game bring in, just look up Axie Infinity. For the month of July, Axie Infinity with its cutesy yet boring gameplay raked in almost $90 mil.


Wouldn't that make the earning potential of AAA game more insane?


Indirect use case for $ILV tokens: 2nd in-game currency

Rather than having to wait one year to collect your rewards, stakers have the option to exchange for $sILV which will exists only in Illuvium ecosystem meaning that it will not be for sale. $sILV token can be used to exchange for in game items such as the upcoming land sale, cosmetics etc.


If not, $ETH can always be used instead.



Token supply

$ILV token has a fixed supply of 10 mil, below is a breakdown from Illuvium docs.

Instead of 4 mil tokens to be distributed via liquidity mining, it was changed to 3 mil.

I believe the remaining 1 mil will be reserved for future competition prizes etc.


Not sure if 10 mil would be sufficient for the future like what if Illuvium team needs to raise more capital?


Closing

$ILV's tokenomics is really simple, just stake and earn more $ILV / $sILV. It doesn't have anything to do with the game so no worries about Pay-to-Win ruining the game.


What really stood out were the revenue distribution and its fixed supply. Feels like a good recipe for "numba go up only" haha. I do think that it is a decent token to get some exposure in the metaverse segment. So if you missed $AXS like I did, well at least there's $ILV haha.


By the way, I currently do not hold any $ILV but I'll definitely add it to my watchlist.


The funny thing is that I knew about $ILV a few months back when price was at low double digits. Since there were hardly any info about it, I didn't buy.

Screenshot from CoinGecko

Now, looking at this chart gives me pain. Well you win some, you lose some...


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Disclaimer: The information listed here is accurate at the point of writing. I am not endorsed by any of the platforms mentioned here. It is strictly my personal opinion and should not be regarded as investment advice. Please do your own due diligence.


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