The aim of this post is to explain the tokenomics of the $ILV token, break down the maximum total supply of 10,000,000 in detail and explain the basic revenue streams of the protocol. Additionally, we are announcing the Balancer Liquidity Bootstrap Pool.
Note: Yield farming is expected to last for three years, with a majority of the coins distributed in the first two years. Balancer Liquidity Bootstrapping Pool (BLBP)
By using Balancer for our launchpad, we are able to fairly distribute 1,000,000 tokens with no lock, allowing for a healthy and stable pricing process. Below are the proposed variables for the upcoming sale.
Initial pool weight ratio 96:4
Final pool weight ratio 50:50
time span 72 hours
linear progression
BLBP participants will receive a variety of promo NFTs for early purchase, bulk purchases, or both. We also offer rewards for participants who are unable to spend large amounts of capital via random NFT drops in which ALL participants automatically participate. Functionally, this means that every participant, no matter how big or small, has a chance to win rare NFTs.
Illuvium Vault’s revenue streams can be broadly divided into two categories; In-game purchases and IlluviDEX exchange fees.
For every sale on our IlluviDEX, conversion fees and betting fees initially amount to 5% of the total transaction value. Additionally, the Immutable X platform (IMX) imposes a small cap on all transactions on its network in return for waiving GAS fees. The predominant currency in the game is ETH.
Token supply: 3,000,000.
Below are the suggested variables for yield farming.
Yield Update Cycle: Every two weeks
Adjustment Ratio: 97%
Pool weights are initially set as follows:
$ILV/ETH: 0.8
$ILV: 0.2
The yield pool contract is able to create “flash pools” which are temporary farming pools that can be added by the eDAO to distribute $ILV with a specific weight. This gives the flexibility to add new partners and further distribute Illuvium tokens.
The Yield Farming Percentage Allocation for a given Pool X is calculated using the following formula:
All in-game purchases and fees in ETH are sent to the Vault contract. Periodically and automatically, the Vault Contract will use ETH to purchase equivalent ILV from the Uniswap V3 pool of $ILV/ETH, and ILV will be distributed to stake token holders in proportion to their share*. (*There are risks associated with DeFi, most notably staking and smart contract risk, and contract configurations are continually evolving and subject to changes and moods of the Illuvium community.)
Participants in the $ILV/ETH and $ILV staking pools are weighted equally for vault distribution purposes.
In order to motivate long-term stakeholders, we have developed a novel distribution system that distinguishes between locked and unlocked tokens.
Stakers have the option to lock their staked tokens on a sliding scale for up to 12 months. Those who choose to leave their wagered tokens unlocked have the flexibility to withdraw them at any time. Those who lock will receive an increase in their pool weight as a reward for their trust in the token. This bonus is linear and with a maximum lock-up period of 12 months, staking tokens are weighted twice as much as unlocked staking tokens. This weight affects both Yield Farming Rewards and Vault Distributions.
As an an example:
-
Staker A chooses not to freeze. Her weight is 1.0
-
Staker B opts for a month’s ban. Their weight is 1.083 (1 + 1/12 since they are locked for 1/12 of the maximum period).
-
Staker C opts for a 9 month hold period. Her weight is 1.75
-
Staker D decides to have a 12 month suspension. Her weight is 2.0
High GAS costs present a barrier to entry, especially for smaller players. Because the game has the potential to attract players of all sizes, we do not force wagered token holders to claim their rewards on a regular basis.
Instead, there is an opportunity to extend the rewards across each distribution cycle, allowing stakers to claim them when it is appropriate for them to avoid a high percentage of GAS fees. However, in order to encourage participation and activity within the game itself, rollover ability is tied to in-game activity. In order to avoid having to submit weekly claims, the linked account must actually be active for a minimum period of time.
Token pool: 1,000,000.
Part of the proceeds are distributed in-game for tournament battles, quests, and daily challenges. We did this to incentivize gameplay and allow players lacking capital to use Sweat Equity instead to access return rewards.
ILV rewards obtained through yield farming are held in escrow and kept in the vault for 12 months. During this time they cannot be withdrawn from the protocol. Instead, stakers can forego these rewards and claim an equal amount of sILV$ (equal to the value of ILV$), which will be minted and transferred to IMX. $sILV is used as an in-game currency that allows the holder to effectively spend their rewards earlier than the standard 12-month period. All in-game purchases are indexed in USD, so there is a price conversion from $sILV to USD (based on $ILV).
All tokens except those purchased in BLBP and in-game yield are subject to a 12-month hold period and then unlock linearly over an additional 12 months.
Tokens purchased in the BLBP are unlocked, but a participant may choose to lock them in order to receive a higher payout of ILV in exchange for providing sustained liquidity to the in-game economy. All tokens claimed through yield farming will also be locked and wagered for 12 months as described in the $sILV Yield Rewards* section.
Our initial private and seed participants are all confident in the protocol’s longevity, as evidenced by the lock-up period, which means the vast majority of tokens will no longer be in circulation. We have examined the tokenomics of many successful protocols in the DeFi space and believe that the mechanisms in Illuvium will ensure an equitable distribution of the $ILV token.
(*There are risks associated with DeFi, most notably staking and smart contract risk, and contract configurations are continually evolving and subject to changes and moods of the Illuvium community.)
https://illuvium.io/
Join us: discord.gg/illuvium
Stay tuned for more updates…
Learn Crypto Trading, Yield Farms, Income strategies and more at CrytoAnswers
https://nov.link/cryptoanswers
Comments are closed.