Illuvium State of Staking February 2022

By Deraji | ILVFi | 27 Feb 2022


It’s been over a month since staking was paused in order to implement staking V2.  Here’s a quick overview of where Illuvium staking is at, and what to expect in the coming weeks.  

Summary  

  • Between unstaking and the staking pause, the past month has been good for those already staked in Illuvium
  • I created a way to estimate your rewards during the pause since January 20
  • Expect Staking V2 shortly and remember to upgrade to keep earning rewards
  • I predict a significant drop in the ILV pool APY in the next month due to pend up claiming

Staking Today

As of 27 February, 2022, a little over 45% (1.36 million ILV of 3 million) of all staking rewards have been issued, and we’re in the 18th (of 78) fortnightly period with staking lasting through June 2024.  Currently, 4275 ILV are issued daily as yield farming rewards, with the next 3% decrease expected on March 9.  Based on the current pool conditions, I estimate each staked ILV generates 0.00037 ILV daily, and 0.018 ILV per SLP at weight = 1.  Use my dashboard here to predict your daily rewards.

04298ba34a30cf8c0be2bd87f79e8264d233c35951dc7b748a2a17812385df43.png

Since the Pause

Since 20 January, new staking has been stopped, so only withdrawals have been permitted.  The staking dashboard shows 0% APY for both core pools, though rewards are being calculated manually for the team and will be updated once staking V2 goes live. 

For the ILV core pool, around 20k ILV have been unstaked during this period out of a basis of a little over 1 million staked tokens.  Around 14k ILV have been claimed as a result of the unstaking, so the net change has been only a decrease of around 5k ILV, or a decrease in pool volume of 0.5%.  However, since most of the unstaked ILV are more likely staked as flexible and claimed ILV have a weight of 2, the decrease in rewards per ILV is likely a little higher, but relatively insignificant compared to past pool growth.

73771f10cee518a222a03dd84d2ba76398dbbf96d2db39954232839b6fa09020.png

For the SLP core pool, around 4200 SLP were withdrawn on a basis of 100k SLP before the pause.  Again, the unstaked tokens are more likely low token weight while the majority of staked SLP are locked for 12 months.  Net, we had three 3% decreases during the pause partially offset by the 4% withdrawal.  Overall, this has benefited those already in the pool, changing from an average monthly pool growth of 3-4%, to a 3% monthly decrease in stakers.  In short, if you’re in Illuvium for the long haul, the pause has been a positive for us.

Estimate your rewards

I’ve been tracking withdrawals, and added a new section of my dashboard to help predict the rewards you can expect once these manual rewards are issued.  If you go to the spreadsheet here, you can enter your number of staked ILV and SLP along with your pool weight to get an estimated number of ILV rewards you can expect.  Due to the majority of unstaked tokens being low token weight and not determining the exact moment of the pause, this estimate is likely a little high, but within 5% of what you can expect.  I’ll continue to update this until the rewards are issued, and you will continue to earn as long as you don’t withdraw your stake.

656938eb16442c0c5b883503530a2df9d0608226e368273c39795564db951ded.png

Enter your number of tokens and weight in cells G10:H11 to predict your rewards in cell I12.

Through 27 February, each staked ILV (at weight = 1) can expect about 0.0143 ILV in rewards, while each SLP (at weight = 1) can expect 0.748 ILV over the paused period.  I anticipate at least two more weeks of manual rewards.

Impact of the Pause

There are two other major topics I want to highlight regarding the pause.  First is the massive claim we should expect once Staking V2 is implemented.  Upon the freeze on claiming sILV, there were 130k pending unclaimed rewards.  As of today, that number is over 360k, meaning there are 230k additional pending rewards that we can expect to be claimed shortly.  That is in addition to the rewards that stakers planned to claim as sILV to enable land sale purchases.  In short, we should expect a major dilution of the ILV pool upon reopening, potentially on the order of 20%.  Given the APY of the ILV core pool was just about 30% before the pause, I would expect that number to drop pretty quickly to about 22% within days of the pool reopening, not including new ILV entering the pool due to market conditions.  Be prepared.

I also want to address the impact of rewards that were forfeited during the rewards pause.  Aaron and the team have indicated that rewards are being manually calculated, and unstaking during the pause will essentially forfeit any rewards earned during that pause.  I did some quick calculations to estimate these forfeited rewards, and found that only about 170 ILV out of the 34000 ILV rewarded during this period, about 0.5%, would be forfeited.  For the SLP, the forfeited rewards are a bit higher, but still only a fraction of the total.  A little under 2000 rewards have been forfeited by those unstaking SLP, which is about 1.5% of the 136k ILV rewarded to those staking SLP during this pause period.  This means the team has around 2000 ILV to determine what to do with.  If these were given to those remaining in the pools, ILV stakers would receive on average 0.00016 ILV per ILV staked (or about $0.08 at $550 per ILV).  For those in the SLP, the forfeited rewards would yield about 0.02 ILV per SLP on average, or about $11, a 0.4% return.  In short, the forfeited rewards are rather insignificant as most people staked before the pause remain staked afterwards.  We’ll await word from the team on how they choose to handle this small amount of ILV.

Staking V2 is Coming

Several recent Discord comments from Aaron Warwick hint that we should expect the issuance of the new sILV token (sILV-2) in the next few days, and the start of the Staking V2 upgrade period shortly thereafter.  We won’t see rewards return to the automatic dashboard for a bit of time yet, and it’s unclear at what stage of the process people will be able to begin staking again.

As a quick reminder, everyone who is already staking must take action during this upcoming period to continue earning rewards.  See my article here for more information, but in short, you will need to UPGRADE to continue earning rewards.  One upgrade transaction is required for each core pool you’re actively staked in.  If you’ve only staked in the SLP core pool with claimed ILV rewards, you will only need to upgrade your SLP stake as claimed and vesting ILV are automatically upgraded.

Conclusions

It should be a busy few weeks after the quiet past month.  Given the broader market conditions and ILV being at a 5 month low and SLP at the same price as August 2021, I expect we’ll see significant staking action once things reopen.  We are also a month away from the start of the token unlock, where we’ll see 7030 new ILV open up daily through July 1 and a further increase in unlock due to vested reward availability.  While Kieran has indicated we shouldn’t expect seed token holders to sell, we should expect these tokens to move over to the yield farming pools in order to gain additional rewards.

In summary, make sure you upgrade once V2 opens and enjoy the next few weeks of yield farming rewards before we see the impact of a lot of claimed ILV, newcomers to the pool, and the entry of seed and management tokens to yield farming.

Happy staking!

How do you rate this article?


38

2

Deraji
Deraji

Crypto curious thinker, amateur economist, geriatric millennial gamer passionate about Illuvium. Happy to share my economic and financial assessment of this unique blockchain NFT Play-to-Earn project. patreon.com/ilvfi


ILVFi
ILVFi

ILVFI focuses on the upcoming P2E game, Illuvium, the first proposed AAA-quality video game based on blockchain technology and NFT ownership. We'll focus on both the game play, as well as the in-game and ILV governance token economics.

Send a $0.01 microtip in crypto to the author, and earn yourself as you read!

20% to author / 80% to me.
We pay the tips from our rewards pool.