What is Illuvium (ILV), how does it work and why is it popular?

Blockchain games are not a recent development. In fact, there are hundreds available, many of which have achieved significant success, such as CryptoKitties, My Crypto Heroes, and Axie Infinity, all attracting a substantial player base. However, we have yet to see a game that can be classified as a true AAA title with widespread appeal. With Illuvium on the horizon, this might soon change.

What is Illuvium (ILV)?

Illuvium is an open-world fantasy battle game built on the Ethereum blockchain, often heralded as the first AAA game on Ethereum. It aims to entertain both casual gamers and hardcore DeFi enthusiasts with its diverse collecting and trading features. The world of Illuvium is populated by creatures called Illuvials, which players can capture after defeating them in battle and nursing them back to health. These creatures then become loyal parts of the player's collection and can be used in battles against other players in Illuvium's auto-battler gameplay.

The game combines open-world exploration with PVP battles, allowing players to either explore its vast world or build a powerful team of creatures. In development since 2020, Illuvium is being created by a global team of over 40 individuals, including co-founders Kieran Warwick, a serial entrepreneur and early cryptocurrency adopter, and Aaron Warwick, an experienced game designer. They are also brothers to Kain Warwick, the co-founder of the DeFi platform Synthetix.

The ILV token serves multiple purposes within the Illuvium ecosystem. It rewards players for their in-game achievements, gives them a share of the Illuvium Vault, and allows participation in the game's governance through the Illuvium decentralized autonomous organization (DAO).

How does Illuvium work?

Although Illuvium incorporates blockchain elements, it functions more like a traditional video game. It can be accessed through a downloadable desktop app and is supported by various DeFi applications, including a yield farm and decentralized exchange. Players explore the Illuvium world, battling Illuvials and other players, completing quests and daily challenges, and engaging in its communal storyline. Throughout the game, players collect Illuvials, which vary in rarity, utility, and desirability based on their characteristics. These include:

• Classes: Empath, Fighter, Guardian, Rogue, and Psion.
• Affinities: Air, Earth, Fire, Nature, and Water.

Beyond class and affinity, each Illuvial has numerous additional attributes, such as attack damage, attack speed, and savagery, that influence their combat strength. Illuvials grow stronger with victories, can be enhanced with in-game items, and upgraded to a special “ascended” form, benefiting from two affinities simultaneously.

Each Illuvial is represented by a unique non-fungible token (NFT) and can be traded on external exchange platforms and the gas-free IlluviDEX. They can also be fused into more powerful forms and come in normal, holographic, and dark holographic variants, with the latter two being rarer.

The game features multiple revenue streams, primarily from in-game purchases of items, crafting components, cosmetics, and shard curing. All revenue is distributed as rewards to those staking ILV tokens through an ILV buyback system.

What makes Illuvium unique?

Unlike most other blockchain-powered games, Illuvium features a fully 3D environment with over 100 unique Illuvials scattered throughout its various regions. Each Illuvial is designed by a team of world-class artists, ensuring it appeals to players used to big-budget retail games.

Illuvium also stands out with several unique features compared to other blockchain-enabled games and AAA titles:

Layer-2 integration

Although Illuvium is secured by Ethereum, it is built on Immutable X (IMX) — a layer-2 solution designed to scale applications with NFT functionality. By leveraging Immutable X, Illuvium allows players to mint and trade NFTs with zero gas fees and near-instant transaction finality, while always maintaining custody of their assets.

The IlluviDEX

Illuvium includes a built-in decentralized exchange (DEX) platform called the IlluviDEX, used for trustlessly exchanging Illuvium assets, including Illuvial NFTs. A 5% fee is deducted from each sale and added to the rewards pool for ILV stakers.

Yield farming

A total of 3 million ILV, equivalent to 30% of the maximum supply (10 million), are allocated to the Illuvium yield farming program. These tokens will be distributed over three years to users contributing liquidity and through various partner reward schemes.

What is sILV?

Illuvium offers a unique yield farming reward system where all ILV rewards are locked for one year before they can be withdrawn. However, stakers can bypass this waiting period by converting their ILV rewards into a secondary in-game asset called sILV. By claiming rewards as sILV, users receive the USD equivalent in sILV and can use these rewards immediately to purchase in-game items. sILV cannot be withdrawn from the game and is not represented by a blockchain-based asset.

What does interoperable mean in the context of blockchain gaming?

Initially positioned as an AAA-grade blockchain-powered exploration game, Illuvium's project scope has significantly expanded. It is now touted as the world's first "interoperable blockchain game," aiming to create a Web3 gaming ecosystem where in-game assets (NFTs) can be used across various platforms, products, and experiences. This interconnected Web3 gaming ecosystem aims to offer players an open environment to create, use, trade their assets, and establish their in-game legacy.

The project team is developing several games, including the original Pokemon-like title "Overworld," where players explore a lush 3D landscape and battle rare creatures called "Illuvials." The second game, "Illuvium Zero," is a builder-type title that allows players to purchase, own, and develop NFT-based LAND. Resources gathered in this game can be used in Overworld and potentially other games in the Illuvium ecosystem. "Illuvium Zero" is accessible on mobile and desktop platforms.

The third game in development is a card-style auto-battler named Arena. In this game, players can engage in automated battles with their Illuvials, participating in a battle system that offers various rewards and is more intricate than it may appear. Arena features three modes (Encounter, Ascendant, and Leviathan), each designed for different player types and skill levels, offering diverse gameplay experiences.

Currently, Illuvium Arena is in the private beta stage and is scheduled for release soon on PC and Mac platforms.

How far along is Illuvium in its development?

Illuvium has been in development for over two years and appears to be following a traditional game development timeline, similar to AAA studios that typically take 2-4 years to release a polished product.

Currently, Illuvium has three games in public development (Illuvium Zero, Arena, and Overworld). However, the founders have hinted at plans for an additional six games. While details of these games have not been fully disclosed, Illuvium co-founder Aaron Warwick has mentioned that one of them is a first-person shooter.

"We already have in the works, at various levels of concept, probably 15 to 20 games that we think could work. We’ve got some basic game design documents for five or six of them that we think are very obvious ones that can exist in our universe," Warwick shared in an interview with Polemos. "There is a first-person shooter that is at a very low level of concept."

At present, there are still three primary titles in development:

• Illuvium Overworld: Currently in private beta since December 2022.
• Illuvium Zero: Currently in alpha, accessible on Windows, Mac, and Android platforms.
• Illuvium Arena: In private beta since December 2022.

The team has expressed their intention to integrate blockchain elements in the background, aiming for players to enjoy the games without necessarily being aware they are blockchain-powered. They are adopting a "fun-first" approach, focusing on providing enjoyable gameplay experiences rather than solely relying on play-to-earn tokenomics like some other games.

Where can one trade the $ILV token?

At the time of writing, ILV ranks as the seventh largest gaming token, trailing behind heavyweights like SAND (The Sandbox) and AXS (Axie Infinity). It demonstrates relatively high liquidity, with daily trading volumes typically ranging from $3 to $6 million across more than a dozen popular exchange platforms.

Binance emerges as the most liquid exchange for ILV, accounting for approximately 40% of all ILV trading volume. The token is also supported by several other reputable platforms, including Coinbase, KuCoin, and OKX. All four of these platforms have published their Proof of Reserves (POR). ILV is also tradable on most popular decentralized exchanges (DEXs), such as Uniswap.

How does Illuvium compare to Axie Infinity?

While both Illuvium and Axie Infinity involve collectible in-game characters that can be battled, traded, and upgraded, the scope of the game world surrounding these characters differs.

Illuvium is a 3D role-playing game with a gradually revealed storyline and a vast, open, explorable landscape. In contrast, Axie Infinity is a popular 2D game featuring cute creatures called Axies, reminiscent of Pokemon. Axies can be bred, battled, and traded, but there is no story mode in the game.

Both Illuvium and Axie Infinity incorporate a strong gamified DeFi element, meaning real Ether (ETH) can be at stake while playing, as some Illuvials and Axies can fetch significant sums on the open market.

Unlike Axie Infinity, which uses a random assortment of assets to create each Axie, Illuvium's Illuvials are entirely unique. Each Illuvial features custom artwork and rigging, ensuring they are distinct and have characteristics related to their properties and region.

While there are similarities between the two games, Illuvium is primarily aimed at traditional gamers who may or may not have experience with cryptocurrencies and NFTs, whereas Axie Infinity is more likely to appeal to the crypto-savvy audience.