Illuvium, a web3 play-to-earn monster collector and auto-battler game currently in beta, has closed a virtual land sale worth more than $72M, defying the bearish market sentiment hanging over crypto.
The digital land was sold via dutch auctions from June 2 through June 5. The sale distributed 19,969 land plots, with roughly 282 plots going on sale every hour. The game will feature 100,000 land plots in total, with Illuvium planning to conduct more land sales in the future.
Illuvium’s land plots generate fuel and elements that power its gameplay. The auctioned plots are tiered between levels 1 and 4 according to their rarity and the volume of in-game resources they can produce. Landowners will receive 5% of in-game revenues generated by the plots.
Land could be purchased using either Ether or sILV2 — rewards accrued through staking Illuvium’s governance token, ILV. The land sales generated 4,018 ETH and 239,388 sILV2 valued at $72M in total.
While ILV is currently the ninth-largest GameFi asset with a $174.2M market cap according to Coingecko, the asset has suffered heavy drawdowns amid the recent bear trend. ILV peaked at $1,845 on Dec. 1 and has since shed 86% of its value to last change hands for $267.5.
Closing prices fluctuated dramatically during the auctions. Tier 1 plots were purchased for between 0.3 ETH and 2 ETH, while Tier 2 plots ranged from 0.97 ETH and 6 ETH, Tier 3 parcels were secured for 3.67 ETH to 20 ETH, and Tier 4 lands sold for between 13.6 ETH and 76 ETH.
Illuvium founder, Kieran Warwick, told The Defiant that the ETH will be swapped for ILV and redistributed back to ILV stakers. The sILV2 raised was burned, destroying 2.39% of its supply.
Lower Gas Fees
The dutch auctions utilized Ethereum Layer 2 scaling solution, Immutable X, to minimize the gas fees associated with participating in the sales. Immutable also powers the Illuvium game. Warwick estimates that leveraging Immutable drove a 60% reduction in gas fees, with users paying approximately $20 per transaction on average. Future sales will be entirely held on Immutable X to further reduce gas fees.
“Nearly all Ethereum NFT sales result in wasteful bids that reward miners and cost the buyer. Gas wars should now be a thing of the past,” said Warwick.
Two tier 5 ‘stadium’ plots — which host Illuvium’s e-sports tournaments — will also be sold through conventional auctions soon. Warwick previously told The Defiant that Illuvium already has sponsors lined up to provide revenue for landowners.
Virtual land is fast becoming a formidable asset class within web3, with researchers MetaMetric Solutions estimating that $501M worth of metaverse land sales were closed in 2021. A further $85M worth of plots were sold in January alone.
A land plot within The Sandbox set the record for the most expensive single plot sold in November, when Republic Realm purchased a parcel from Atari for $4.3M. The deal was closed roughly one week after a plot within Decentraland set the previous record at $2.4M.