Is the Illuvium Airdrop a smart decision?
We all love getting free money airdropped to us, but could this do Illuvium more harm than good?
Illuvium has come a very long way in the past 3 years, and there are some who doubt that they can get enough players to help create the flourishing economy we all dream of. Although I cannot see the future, there are many elements of the upcoming launch that make me both excited and fearful.
Here is what I will be covering in this newsletter:
The latest announcements in Illuvium
My take on the Illuvium Airdrop
Why the Illuvium Arena upgrade is imperfect but important
[PAID] My strategy for when Open Beta kicks off in June
We will cover all of that here and more so please keep reading. I am excited to share this journey with you.
Please don’t forget to subscribe below! It really means a lot and together we can tackle the Illuvium metaverse better than anyone else.
Illuvium has changed so much in just 2 months
Besides the 5 announcements that dropped over the past few weeks, there is lots to catch up on if you haven’t been paying attention.
First I must apologise that I did not write my monthly newsletter for February. Last month was extra crazy and even though these next few are going to be even worse, I will be here to make sure none of you get caught out! Below I will outline the core details and my takeaways on 5 major things that have happened in Illuvium over the last few weeks. Illuvium is evolving rapidly and everything is almost ready to launch, I am very excited and I wanted to thank every single one of you for coming on this journey with me.
The Illuvium website saw a major upgrade on the 15th of March. Not only did the website and Illuvidex get a big facelift, but the website was split into 5 individual domains.
Although this seems like a basic change on the surface, it actually goes much deeper. Think about all the times you wanted to go to the StarCraft II or League of Legends websites. You don’t go to Blizzard or Riot, you go to the games direct home page. This is because the UX is significantly better, someone who loves StarCraft II probably doesn’t play World of Warcraft or Call of Duty Black Ops.
Treating Illuvium in much the same way is crucial for its long-term success. Everyone in this community is inside the bubble at this time, but when it comes to new players, they will likely only be interested in the Illuvium Overworld, the Arena or Illuvium Zero. Personally I’d like to see the Illuvium Overworld be a bit more front and centre, given its centrality to the Illuvium universe but it’s also not bad as is. Illuvium is very far ahead in Web 3, but more importantly they take great care in everything they do, and don’t shy away from structuring their brand in a way that will benefit them in the long term.
The latest Illuvium Arena patch dropped on the 26th of March and it shook up the entire competitive Illuvium community. Not only were there some minor balance adjustments but the entire flow of the game has been changed. If you want an easy to read breakdown of the updates then you can check out the tweet here
However, there are 2 key changes I will mention here briefly since they fundamentally improve Arena and make me extra excited for the future of Illuvium’s core competitive game mode.
You now Ascend your Illuvials allowing your team to evolve over time.
You get random Augments each round and EVERY Augment is free.
I will discuss these changes in more detail later on in the newsletter. Not only do they change the way Illuvium is played, but they make every new match feel unique.
On the 26th of March Illuvium also announced their collaboration with the best NFT project in all of crypto, Pudgy Penguins. It might surprise you that I believe this was one of the strongest announcements out of all of them. Not only is Pudgy a highly respected, well funded and capable project, but they have achieved a key outcome that most Web 3 teams only dream of.
They have delivered Merch to a major USA retailer, Walmart.
Not only could this collaboration help Illuvium do the same, but getting product on the shelves in a major retailer is truly mainstream. There would be so many mothers and fathers that know nothing about Crypto or NFTs but want to buy a cute Penguin plushy for their children. Illuvium would be no different and would help kick off mainstream appreciation for the Illuvium IP, something the team has rightly made a priority over the past 3 years.
Just the day after, Illuvium announced a major Series A funding round where they raised a total of $12,000,000 with a token lock of 12 months. Although sacrificing some of the treasury sucks, the investor and consumer confidence this now gives the project is a major relief.
To paraphrase Kieran’s sentiment, this now allows Illuvium to build an entirely new game in the event that the impending Open Beta doesn’t generate sufficient revenue. I think this is a nice failsafe to have, consumer and market trends are difficult to predict and any sort of padding is helpful. This also means that if we generate revenue but its not enough, our runway will continue to extend while the team has the freedom to further expand the Illuvium universe.
Unfortunately it will now take longer for Illuvium to restock its treasury with Revenue Distribution but its a fair price to pay. In theory there is a moderate chance the major investors will have their tokens unlock during the next Bear market, helping protect the retail investors from tokens being released en masse.
The other thing to note is that companies like Arrington Capital and Animoca Brands were involved in the funding raise. This shows strength, unity, and confidence to all investors given highly regarded companies such as these still have unwavering faith in Illuvium.
And here is the biggest update of them all! Not only did we get 3 key dates for the impending launch campaign, but we got an updated roadmap for what happens afterwards. So lets break down the key dates that were revealed.
April 15th: Pre-Registration begins for those interested in early access.
April 30th to May 28th: Private Beta 4, an exclusive beta on the Sepolia Testnet.
May 28th: Open Beta Testnet - Major testing sprint to prepare for launch.
Open Beta Main Net - The moment we have all been waiting for.
With all of this there will be a massive airdrop campaign running for a total of 6 months, early players, Testnet players, twitter warriors and everyone in-between will have the ability to earn ILV tokens through an extensive airdrop. Not only will this be a big deal in terms of marketing but it will encourage all sorts of players who want to get involved with either one aspect of Illuvium, or all of them.
Now we have seen many airdrop campaigns in the Web 3 space already, but Illuvium is currently the largest project (by market cap) to attempt it. This means that all eyes will be on Illuvium for better or for worse and with the combination of affiliates and referrals, everyone will want to get involved. Illuvium’s entire marketing campaign essentially kicks off starting on April 15th and lasts throughout the rest of 2024, dragging attention away from a lot of the smaller projects and keeping a laser focus on everything it does!
The Illuvium Airdrop could send $10m+ to players
Although the wealth generation from this airdrop is going to be insane, could it do irreparable damage to the DAO?
The in-game yield pool for Illuvium currently has approximately 1,000,000 tokens. If 10% of that is used for the airdrop campaign it could amount to the equivalent of $12,000,000 at todays price ($120). This might just be the largest wealth distribution in all of Gamefi and a record that won’t be broken any time soon.
To put that in perspective, with one million players it would be $12 per person, $120 at 100k and $1200 at 10k players. For reference, Illuvium Beyond currently has <5k active users and 10k total users, realistically putting $1200 on the table for the existing community if no one else decides to join.
However we need to consider the dark side of an airdrop. Since we can assume a vast majority of airdropped tokens will be dumped on the market, then Illuvium needs to generate an equivalent amount of revenue to offset any price decline. In the case of 10% that would mean Illuvium needs to generate a minimum of $2,000,000 every month for 6 months to break even on the campaign, any extra is an added benefit.
If we return to our conservative 10k players estimate then each player would need to spend $200 every single month within the ecosystem. Although this seems extreme, its certainly not unusual in the broader crypto space. That being said if an Overworld run costs $2 then players would be doing 100 runs over 30 days. Since most of these players are employed full time, this doesn’t make any sense. However, stage 3 runs could cost $20-$50 in my opinion, which would make it easy to hit that $200 mark. And none of this even includes the revenue from secondary market royalty fees, something I expect to go haywire more than anything else.
Ultimately I do expect the airdrop campaign to be a major success in terms of attracting new players to the Illuvium ecosystem. My real fear is just how sticky the game will be for those players. Ultimately if the overall market has strong volume because of the airdrop campaign, I expect a large player base to hang around even after season 1 of the airdrop concludes, and if Illuvium breaks even, there would be no reason to not release a similar amount of tokens every 6 months. Not to mention if the token price increases then so does the airdrop and potential rewards for players.
The Illuvium Arena got a huge overhaul
Although its not perfect, this update is definitely a step in the right direction even though there is more to be done!
Illuvium has always prided itself on its ability to take feedback and incorporate it into its suite of games. However, until now this has felt like a bigger focus in the Overworld than on the other aspects of the universe. The Illuvium Arena got a major upgrade this past fortnight and not only is it a big improvement, but it makes me excited for the future of Illuvium as a whole. To help you better understand, let me discuss 2 key changes that redefine the entire 1v1 game mode.
Over the course of the battle you now Ascend your Illuvials. Not only does it take you a while to build a large and powerful board of Illuvials, but you cannot double up on Illuvial lines. For example you cannot play both Phyri and Scoriox and your Phyri will actually evolve. In light of this change, pivoting takes a whole different meaning, you cannot just full swap your team.
Secondly, augments see a change that redefines their place in the game. Not only do you get random Augments each round, EVERY Augment is free. This not only slows down the games pacing considerably and makes each match feel more unique but the augments being free allow you to make more crucial positioning and synergy decisions over the course of the battle.
These 2 changes do many things, the first of which is slow down the game. Although I am neutral on this change, it allows both players more time to pivot, adjust and make decisions to counter play their opponent each turn. Now the Illuvium Arena isn’t perfect or anything but this is a huge step in the right direction, both in making the game more beginner friendly and adding more decision making throughout the battle.
However, the team builder is sadly still extremely relevant. Although that will never really change, there is nothing wrong with the Illuvium Arena remaining a niche offering within the ecosystem. Aaron and the dev team are currently putting together an 8 player FFA game mode similar to TFT which should have much more broad appeal. By making game modes for lots of different kinds of gamers, the Illuvials should have plenty of utility giving them value to lots of different kinds of gamers.
Here is my entire strategy for the Illuvium Open Beta
Although we don’t have the full details on the upcoming Airdrop, its safe to assume, the more efficient you are, then the more ILV you earn, here is my plan.