‘Like a mine that can give you residual income for 10 years’: Kieran Warwick on Illuvium’s imminent digital land sale
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Probably the biggest event in crypto gaming (and maybe the entire metaverse) right now is the Illuvium land sale. It kicks off imminently* and we caught up, once again, to discuss it with one of the game’s sleep-deprived founders, the affable Kieran Warwick.
Hey Kieran, we covered this a bit last week with YouTubers Scoriox and Nijafe, but it’s great to get your take. Please give us your sales pitch for Illuvium land and the Illuvium Zero game in which the land essentially is owned and controlled…
Sure, so Illuvium Zero is the companion game to Illuvium. And it’s what powers the entire Illuvium economy. That’s the top-level pitch.
The fact that five per cent of all revenues inside Illuvium will stream back to landowners proportionately is a huge sell for that. There will only ever be a maximum of 100,000 land plots, so it’s a sub-game that’s actually more positioned towards the investor in crypto.
And, as a landholder, you’re the only person that gains access to creating blueprints as well. Land is the only place you can create them.
Blueprints… I’ll ask you more about those in a sec, but when you say Illuvium Zero is more investor-pitched, does that mean it doesn’t require much time to play, as opposed to the main, open-world and creature-battling game?
Yeah, it’s essentially a top-down mobile game that you can play in your spare time – literally only about 20-30 minutes per plot to fully optimise it. And if you have no time for that, even, it can also be rented out to others/scholars to play for you, too, in a profit split.
But really, you can think of this part of Illuvium as a fun financial game – a way to set up your own digital business, similar to how you would go and purchase real land in real life to utilise.
So the land is like an industrial complex that you can build upon to extract in-game or real-world value from, is that right?
Yep, think of it almost like you’re building a mine. It’s like you’ve found this deposit, and you’ve got a company that’s going in there and extracting value for you. And now you have the ability for, say, the next 10 years to generate a residual income from mining the resources [the game’s ‘fuel’ ERC-20 tokens] from this place.
And these are resources that can be sold for ETH. As long as people want and need those fuel resources to continue playing the main Illuvium game, then you’ll have a residual income for as long as that lasts.
Other than providing real-world income, which is obviously what many will want it for, what else does fuel do in the Illuvium world?
It does all sorts. In Illuvium Zero, you can use it to build different structures, which might be production boosters, or storage, to store your fuel instead of selling it immediately. And it’s used for all in-game transactions – travelling to different regions, curing shards to capture Illuvials [the game’s NFT creatures], upgrading Illuvials and forging equipment and armour – just some examples.
— Immutable | $IMX ⓧ (@Immutable) June 1, 2022
Back to the blueprints you mentioned. So, landholders can “scan” for these on their land and they’re essentially a way of making cosmetic, NFT skins that can be used in the main Illuvium game or sold on to other players?
Correct. By building a singularity scanner on your land, you can capture the biodata of passing Illuvials, which can be used to create rare blueprint NFTs. And in itself, this could even be considered another business.
I guess that relies on the potential popularity of the game, right? We’ve seen players in mainstream video games go mad for skins, and that creates a big revenue stream for gaming companies…
Absolutely, and what I think could happen with this, is you’re going to find people or businesses that make it their thing to buy the blueprints off people, so that they can gain some control over that part of the market.
Maybe they create a customised set-up, like a form on their website where people can detail what sort of skin they want, and what they’re willing to buy it for. I see all sorts of crazy models coming out of that.
But also, landholders who build whose scanners can essentially control the blueprint NFT market somewhat, and can potentially sell them on at a high premium.
YouTuber Scoriox gives a great Illuvium ‘blueprint’ breakdown, above.
We saw somewhere that you might be looking to snap up a whole bunch of Tier 1s in order to maximise your blueprint creation – is that still your strategy?
Well that’s one idea. But my own strategy actually keeps on changing. I’m now thinking I want to create a megacity. So two-by-two and three-by-three plots are the possibilities for megacities.
And why they’re important is… you might have a Tier 4, a couple of Tier 1s, and a Tier 2 that are connected. None of those have landmarks apart from the Tier 4. When you combine them all to create the megacity, all of them get the benefits of that Tier 4 landmark, which is more fuel. The production boost that you get from that is huge.
So buying plots of land next to each other is potentially advantageous?
Yes, and for two reasons. One, because it can enable you to build a megacity if that’s your aim. And the other thing is, as a smaller investor, if you happen to know that someone else is looking to create a megacity – such as a whale in the community – you could look to buy Tier 1s around where you suspect they’re going to create it.
You could potentially sell them on for a higher price if they’re in demand from those who want them for their megacities. In that instance, I’d be trying to track their wallets, and watch where they’re buying.
Sneaky stuff! What’s your wallet address again? Tier 5s – that’s for super whales, right? Should “regular investors” just forget about those?
Ha, yeah – they’re done in a separate, English auction – I suspect that Tier 5 land will go for somewhere above a million bucks.
(Checks portfolio) Hmm, okay, maybe I’ll stick to Tier 1s. That sort of Tier 5 sale potential is because they have an esports arena, right?
Yeah, Tier 5 land gives access to the controls of advertising for tournaments and naming rights for the stadium. And when we’re talking about doing a US$50 million prize pool to break the esports record for both Web2 and Web3 – the amount of eyeballs that we will have watching that tournament alone, for instance, will be insane.
So, we’re talking big sponsorship possibilities?
Yep, we’ve had big exchanges reach out to us to say: ‘Hey, we’re interested in those advertising opportunities’, plus a bunch of guilds and VCs – conglomerates I guess – that are joining together to possibly buy a Tier 5, and then take turns in hosting the tournaments, or splitting the revenue.
We’ve already had a letter of intent for half a million from one of our partners to have the naming rights for the first year. So that gives you a bit of an idea of how that land is coveted.
Back to slightly more realistic territory for average schmos… Do you have any tips for when to purchase in the Dutch auction itself?
It’s tough, but I think definitely don’t rush in. We were even thinking about putting a failsafe in to allow us to stop the sale if people do start FOMOing in at higher prices, because that’s when we’d see a gas war, and we’re desperately trying to avoid that.
So you think that will actually be avoided then?
I think so, yeah. If this was happening maybe three months ago, maybe I’d say differently. But I think now, with the market conditions the way they are, people will be a little smarter and wait.
But as far as when to buy is concerned… it’s hard for me to say. The price decay on the auction batches is very rapid – it goes down 2.5% every minute, so within 30 minutes, it’ll be half price from where it started.
I don’t want to say buy at that point, and then all of a sudden everyone buys at 70 per cent and then you missed that, or the opposite effect – a lower price. The most important takeaway, though, is that you don’t need to FOMO in on this – it’s spread out to avoid that.
This “Illuvium Insider” video features Kieran and goes DEEP on land-sale info…
You said earlier that five per cent of Illuvium’s revenue go back to landholders, how is the remaining 95 per cent dispersed?
So that essentially goes back to the DAO [Illuvium’s decentralised autonomous organisation – the invested community]. The DAO takes that revenue and purchases the ILV token with it on a regular basis, probably daily. That’s then distributed back to all who stake their ILV in the protocol.
There are fees that go to Immutable (the layer 2 Ethereum protocol on which Illuvium operates), there are those fees to the landholders now, and then the remainder of the, I guess you can call it profit – the remainder is what we call 100 per cent of revenue to the stakers.
Another thing to note on that – the Illuvium DAO’s treasury is staked, too. It sits on about 12.5 per cent. So, for instance, if the land sale makes $100 million, the treasury makes $12.5 million.
Got it. So is Illuvium’s 240 or so staff paid from the treasury?
Yeah, the treasury is essentially our runway – that’s how we pay our staff, partnerships, marketing – all of that stuff. And also, that’s why we say we’re ‘core contributers’ – as team members, we’re just more people staked into this beast of a game.
Let’s talk Ethlizards NFTS for half a moment… As we’ve discussed before, that project’s main utility for holders is investing into seed-rounds of promising GameFi projects. Another upcoming triple-A contender, Civitas, is going to be one of its first seed-round investments we hear…
That’s right, yeah, and there will be others, but another exciting thing for them is, I’m going to start recommending them to buy altcoins – ones that we know are going to eventually come back from the depths of the bear market.
And I think that’s a good idea because the Ethlizards’ own treasury has got 500 ETH sitting there now. And there are 10x opportunities to be had just in altcoin blue chips. So I think diversifying into into some of those will carry some weight for the project.
What sort of altcoins do you think you’d recommend?
Blue-chip DeFi tokens like Chainlink, Aave, 1inch… and I would definitely be buying ILV at these rates, too. So many of them are super cheap.
And just to finish on a, well, bearish note… the bear market itself. Any thoughts on that, and how much lower the crypto market might go?
Well, as you know, I’ve personally played things as a bit of a crypto degen, but I’m very hesitant to put much money into anything else right now.
I think it’s hard to trust any market pumps for the moment. We’re at the point where every time you think the market’s going to bounce back up in a meaningful way, it doesn’t.
And we’re not there yet, but I think we’ll reach a stage where enough people will say, ‘you know what, it’s not worth anything any more’. That will be the capitulation point.
But, like I indicated with the Lizards potentially buying alts, these situations create opportunities.
Interview with KW done and dusted, now here’s a few more things you should know about the land sale…
• The land sale is occurring via a Dutch auction process (don’t FOMO in early!) over three days – June 2 (13:00 UTC) to June 5 (13:00 UTC).
• This land sale event will sell 20,000 plots across seven unique regions. There will be subsequent Illuvium land sale events to reach the 100,000-plot total.
I'm looking at Crystal Shores or Taiga Boreal 👀
— ModernLlama.eth (@llama_modern) May 31, 2022
• You can buy Land using ETH or sILV2 (staked ILV).
• Tip: sILV2 is currently cheaper than ILV but carries the same purchasing power of ILV for the land sale. sILV2 can be purchased on Uniswap. Its token address, according to the official Illuvium Discord channel, is: 0x7E77dCb127F99ECe88230a64Db8d595F31F1b068
• Auction purchasing will happen on Ethereum mainnet, and the mint itself will happen gas free on Immutable X. (Connect to that here). Land can be subsequently purchased on the open market, on the official IlluviDex marketplace.
• For yet more info, get your head around things at the Illuvium Medium channel here. And also check out this video from Scoriox regarding using the MetaMask Ethereum wallet and connecting with the Immutable X site.
This article’s Q&A was lightly edited for clarity. The views, information, or opinions expressed in the interview are solely those of the interviewee and do not represent the views of Stockhead.
Stockhead has not provided, endorsed or otherwise assumed responsibility for any financial product advice contained in this article.
At the time of writing, the author owns too many cryptocurrencies and digital assets than is probably sensible for a pretty small fish in these market conditions. These include Bitcoin, Ethereum and, yep, some Illuvium.