I very rarely diversify my portfolio but this project seemed too good to miss out on. ILV is a token I bought yesterday and started staking today. In this article I'll touch on some aspects regarding what is being developed with this token, why I expect to profit and some regrets about my strategy and execution.
About the game
ILV is the token for the upcoming game called Illuvium. A open world exploration monster gathering RPG that allows you to catch a wide assortment of creatures to fight other players in a game akin to DotA autochess or Teamfight Tactics. There will also be a city building mini-game.
It isn't developed by a gaming company, but instead a gaming DAO. Built on the layer 2 scaling solution Immutable X on Ethereum.
Along with the previously mentioned titles it has also taken inspiration from Pokemón as well as Axie Infinity, particularly the latter's Play-to-earn feature. Every catch-able monster will become an NFT and as you catch it the particular type of monster becomes rarer to find in the world. To capture these monsters you'll need consumables which costs ETH. You'll be able to play for free but can then only capture 0 tier monsters unless you grind like there's no tomorrow to level them up to be able to challenge a tier 1 monster. It'll demand a lot of time if you want to be cheap and you'll still have to pay ETH to travel to new regions.
Gathering a strategically sound setup will be a focal point of the game as each monster has traits that synergizes in different ways with other monsters.
The team looks great with almost a hundred people of which many has worked on widely recognized gaming titles and other ventures, they also possess talent when it comes to blockchain technology.
The financial outlook.
Consumables of different uses all costs ETH to purchase in-game, that or sILV. sILV is a gaming token that are generated for free if you stake ILV. So once you own some ILV you have a periodic budget to play for free from that point an on. The purchase of ILV will most certainly in many cases for people be covered by the value of NFT's they find in the game and there is of course the option of selling your ILV once you've grown tired of the game.
I however don't have a gaming PC so I'm all in for financial reasons
The thing is ILV is quite a remarkable token, for one thing you can choose to earn more ILV instead of sILV when staked. The rewarded ILV is locked for12 months until available but fortunately during that time it counts as staked. Furthermore 100% of all ETH purchases in-game goes to the Illivium Vault which automatically takes this ETH to buy ILV and distributes this to stakers.
There exists only 10 million ILV and 3 million are dedicated to staking rewards for the coming three years. When you stake you can choose to have it be flexible or locked for up to one year, The longer you stake the more weight your tokens get, 1 counting as 2 when staked for a full year, doubling your rewards from the dedicated 3 million.
The prospects are amazing should the game become a success. And even if the price never rises from this point and onward the yield from staking is so high it becomes profitable regardless. It comes down to the team being honest and capable, no severe hacks or bugs, a good reputation for the game being built, Ethereum being stable, Immutable X being stable, no destructive government regulations and so on. You never fully know with your crypto investments but I can mange to live without the cash I've invested on staking, anyone who hopes to use ILV staking a revenue stream has to since it takes so long time to access the rewards. It has to be money you can live without for along time even if all goes well.
My regret
This project might very well be profitable for investors that trades ILV on a short term scale I however am aiming to use it as a long term revenue stream. That is my gamble.
I haven't used the Ethereum blockchain in 2+ years and back then it wasn't particularly much. It was because of a game called Chibi Fighters. Anyhow, I was not prepared at all for what awaited me today.
My original plan was to buy 10 ILV and pair 5 of it with the equivalent vale of ETH in a Sushiswap liquidity pool. It all worked well, now I possessed SLP proving the liquidity providing and 5 ILV, both stakeable on Illuvium.io. The SLP token gives the best yield, staking it earns 80% of the staking rewards while only staking ILV gives 20% of it incentivizing people to help provide liquidity so that others can buy ILV. Since the seed phase of the project no ILV can be bought by the team.
There are excellent instructions on the www.Illuvium.io website about how staking works and I followed it. Though as I made my transactions I discovered that Ethereum has quite hefty gas prices! Providing liquidity took one transaction to approve Sushiswap accessing my funds and another transaction to actually add to the pool. Likewise the staking took two transactions each. The realization of how much I was paying each time prompted my to try and fiddle with the gas I was willing to pay, but then it wasn't enough and all too late I realized that every failed attempt still cost ETH.
My frustration grew and though my original plan was to stake the SLP for a full year and the ILV only for 3 months I staked both for the largest amount of time. The fewer times doing anything on Ethereum the better.
From buying ILV to having it staked it took me 10 transactions totaling 0.094391 ETH in gas fees.
I could have avoided this by not being cheap once I tried to edit the gas cost and only using one staking pool.
Also, had I known the staking rewards has to be requested one time for each staking pool I would have saved myself the hassle and only used one. The profitable but more risky SLP one.
It was a annoying process since I did not anticipate the hefty cost of transactions, but of course, if all goes well it will be petty sums compared to the profits.
I am sure the yield will go down as more people stake and as I've mentioned before the future price is a great mystery that relies on innumerable variables, but as it is looking right now I am quite excited.
If the current yield stays the same my 10 ILV will have increased to 70 in one year's time not to mention if the price also stays the same the monthly income (even though it takes a while to get it) will be higher than what I had on my recent job that I quit this year. Cryptocurrencies sure are remarkable, here I am perhaps creating an amazing long term passive income for myself and with the way my other investments are going, it doesn't matter if ILV totally fails.
And I will keep telling myself this, until the trauma that is today's horrible and nasty ETH gas prices has lessened...