Strangely, Mr. Market is assigning enormous value to an NFT role playing game (RPG) they have not released. That game is Illuvium (ILV) and judging by the price, Mr. Market loves Illuvium.
In fact, CoinMarketCap named Illuvium the seventh most trending cryptocurrency on 6 February 2022. CoinMarketCap also named Illuvium the 139th largest cryptocurrency and gave it a Coin Price of $695.86 on 10 February 2022.
Additionally, CoinMarketCap gave Illuvium (ILV) a $447.259 million Market Capitalization, a $6.957 billion Diluted Market Cap, and a $39.435 million 24-Hour Market Volume on 10 February 2022. They based those numbers on a Circulating Supply of 642.892 million ILV, a Maximum Supply of 10 billion ILV, and a Total Supply of seven billion ILV.
So What is Illuvium anyway?
So what is Illuvium and is it worth $695.86? Illuvium is an NFT RPG. To explain, players need to procure nonfungible token characters they call Illuvials to participate in Illuvium.
Players can harvest, mine, capture, and fight Illuvials in a virtual world they call the overworld. Players can pit Illuvials against each other in the autobattler and form teams. The teams will compete in the autobattler as well. I guess the autobattler is the arena for Illuvial combat.
They call Illuvium “a Fully Decentralized RGP and Collection Game built on the Immutable X L2 Network.” To explain, Immutable X L2 is the first layer two, or second layer for NFTs on the Ethereum blockchain. They claim, Immutable X L2 can offer games, marketplaces, and apps zero gas fees, instant trades, and carbon neutral NFTs.
Hence, Immutable X is a scalable second layer they add to Ethereum to get around the blockchain scalability problem. To elaborate, traditional Ethereum is not scalable because of limited capacity. Immutable X is an additional layer that adds capacity and scalability to Ethereum. Hence, Illuvium is a scalable blockchain NFT game for Ethereum.
Advantages to Immutable X L2 include no gas fees, and a lack of distraction. Instead, they hope Immutable X will make distraction-free gaming possible.
A Decentralized Gaming Protocol
Illuvium itself is a fully decentralized gaming protocol that operates on the Immutable X L2 network. Uniquely, Illuvium will reward stakers with regular distributions of ILV.
The ultimate hope at Illuvium is to create a fully decentralized game that runs autonomously. In other words, a gaming ecosystem that runs and finances itself. They claim Illuvium will be a AAA gaming project with cinematic quality 3D special effects.
Unfortunately, they have not released Illuvium yet. Instead, the website says open testing of Illuvium will begin in the first quarter of 2022. However, the pictures of Illuvium on the website look great. There is a cinematic game play trailer,(a video of Illuvium action) available on line.
Illuvium: Zero
Interestingly, they are planning a second game they call Illuvium: Zero. They describe Illuvium: Zero as a mobile mini-game that will interact with the main Illuvium game. Illuivum: Zero will be a base building game based on a piece of digital land.
There will be a digital land sale associated with Illuvium: Zero. They claim the land sale can produce resources which can interact with the main Illuivum game. They plan to sell 100,000 plots of land in total. The first Illuvium: Zero land sale will offer 20,000 plots of land in a dutch auction format.
Illuvium (ILV) a DAO for gaming
The Illuvium (ILV) is the token associated with Illuvium. The ILV is an Ethereum Request for Comment (ERC20) token that operates on the Ethereum blockchain.
Interestingly, you do not need the ILV token for Illuvium game play. Instead, the ILV token has three functions: Governance, Liquidity Mining, and Vault Distributions.
As a governance token, the ILV allows holders to vote on game improvements. In addition, ILV holders can elect the Illuvianti Couil, Illvuium’s governing body. Hence, Illuvium is a decentralized autonomous organization (DAO) for gaming.
Liquidity Mining allows token holders to accumulate more ILV or sILV (see below) through staking. Liquidity Miners can receive a share of vault distributions.
Vault Distributions allow ILV stakers to get shares in Illuvium and earn passive income as additional ILV tokens. A sales tax on in-game purchases and fees will fund the Vault Distributions. The Vault Distributions are only available from sales on the game and a decentralized exchange they will call the Illuvidex. They hope to share 100% of revenue from the game.
In addition, they will offer an in-game currency they call $sILV. The $sILV is a synthetic ILV token. Users can earn $sILV by staking ILV in the Illuvium protocol. They peg $sILV to ILV so it should have the same value as ILV. However, players cannot use $sILV for player-to-player transactions, such as buying and selling Illuvials.
The Illuvidex will allow users to buy and sell ILV, digital land, and NFTs.
What Value Does Illuvium Have?
I think Illuvium could make money if it works. Notably, the Business Research Company estimates the global RPG market could grow to $22.471 billion by 2023. In comparison, the global RPG market was worth $15.793 billion in 2019.
In comparison, Statista estimates the massive multiplayer online (MMO) game and multiplayer online battle arena (MOBA) games grew from $25 billion in 2017 to $43 billion in 2021.
I consider Illuvium a MOBA, so it is in a growing market. In fact, 360 Research Reports estimates the MMO market could grow to $78.48 billion by 2027. Hence, Illuvium is seeking a piece of what could grow into a $78.48 billion business.
Does Mr. Market Overvalue Illuvium?
Mr. Market thinks Illuvium (ILV) has enormous value. For instance, Coinbase gave Illuvium a $696.52 Coin Price, a $4247.3 million Market Cap, and a 24-Hour Market Volume of $39.4 million on 10 February 2022.. They base those numbers on a Circulating Supply of 642,900 ILV.
I think Mr. Market overvalues Illuvium (ILV) because there is no evidence they have a working game. However, Illuvium’s value shows blockchains could be a gigantic business that can attract enormous amounts of investment.
I advise all speculators to watch Illuvium because RPG NFTs could become enormous moneymakers.
Originally published at https://marketmadhouse.com on February 10, 2022.
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