Illuvium's tokenomics, which have a fixed cap of 10 million ILV, are quite convincing. Let's take a closer look at it:
TOKEN SUPPLY DETAILS: Max supply: 10,000,000 Of the 10 million total potential ILV, 7 million have been created, with the remaining 3 million to be generated from staking protocols.
TOKEN DISTRIBUTION & Lock up & Vesting: (Pic #1)
- Team (upper management): 1.4M $ILV (14% of total supply) unlocked gradually over a 3 year period, linear unlock vesting. Rest of the team: 100k tokens (1% of total supply) with the same unlocks schedule of seed and pre-seed tokens.
- Treasury: 1.5M $ILV (15% of total supply) managed by the DAO (merchandise/marketing/tournaments etc..) of which 15k have been airdropped and 150 are being used monthly in order to pay council members (10 $ILV each)
- Launchpad: 1M $ILV (10%) currently unlocked and stake-able.
- Yield farming: 3M $ILV
- In-Game rewards: 1M $ILV(40% of total supply!)
The team made an important decision in the gaming industry, 100% of all Illuvium revenues are sent back to stakers, this means that merchandising, in-game fees (fusions,skins,revivals). (Pic #2)
TOKEN UTILITY: The $ILV and $sILV 2 tokens have distinct differences, which are explained in this helpful infographic (Pic #3). $ILV isn't used within the game, but has two primary functions: governance rights and revenue distribution rights. The more $ILV tokens you possess, the greater your voting power during elections and the larger your share of revenue distribution. On the other hand, $sILV 2 is the in-game currency that you need for various activities such as traveling and crafting weapons. It can't be used for Illuvium transactions. Moreover, whenever someone claims their staking rewards in $sILV 2, the token is used.
STAKING: As depicted in the infographics (Pic #4), there are two main staking pools for $ILV: $ILV with low rewards. $ILV-$ETH with higher rewards to encourage liquidity provision and reduce slippage. This offers a real advantage to the protocol, which is why they provide greater rewards. However, there is a catch.
The DAO has also set up several short term “Flash” pools to connect with other crypto communities to draw interest to Illuvium.
Burn mechanism: Staked tokens holders earn ILV, which they can claim as sILV to use in-game, rather than waiting a year for the ILV to vest. The sILV can be burned and will never be reissued, reducing the total possible ILV from 10 million. For gamers, sILV offers an opportunity to stake early, generate more money and spend it in-game. For long term staking, the issuance of sILV increases the concentration of revenue distribution. Over 5,000 sILV tokens have already been claimed, despite no use case.
Overall, after seeing the tokenomics of a number of different protocols, the above are stronger than most and demonstrate the ability to establish the fundamental value of the ILV token. Tokenomics are structured to create:
Price appreciation: Increasing the price of $LIFE by creating buy pressure on the ILV token in the Sushi ILV/ETH pool; Income yield: Through receipt of the $ILV purchased from the ILV/ETH Sushi pool
It seems that the combination (from the player > Vault > Sushi swap pool > ILV staker) looks pretty utopian, however, with the predominant use of ETH, this means that the protocol includes external capital, which creates a more stable economic ecosystem.
I want to emphasize that my assessment focused exclusively on the tokenomics aspect. It's important to note that tokenomics alone does not determine the overall success of a project.
DYOR, NFA
Source: Medium.com/illuvium; Medium.com/illuvium/staking; https://staking.illuvium.io; https://docs.illuvium.io/whitepaper Show Less