[PASSED] ICCP-6 Illuvitar & Land Royalties

[hidden jewel]

Simple Summary
This proposal funds the Safety Pool (IIP-29) with revenue generated through the royalties of Illuvitar products and Land. Reserving these funds helps to mitigate the risk of uncertain macroeconomic conditions by providing an emergency source of runway to sustain DAO operations, if necessary.
<@&814435151307866142>

Snapshot Vote: https://gov.illuvium.io/#/proposal/0xe23dbc24beb0ecd28cd580271d1712820198bc4279dbf68a56539fef16eda127

Github: https://github.com/IlluviumGame/IIPs/pull/42/commits/fd158bedea3c9afe9fd617bf91326136e20b3821

[tawny pivot]

+1

[heady silo]

Yes please, let's fill her up🥳

[tawny pivot]

If the last year has taught us anything, it’s that we can expect the unexpected macroeconomic conditions - imo the safety net for the dao is utmost importance 🙏

[wicked ingot]

Isn’t this a little too generic a proposal? For example, how much are the already collected royalties alluded to in this proposal? How long have royalty fees been collecting on land without being distributed back to ILV holders (prior to this idea to distribute to the safety pool instead)? It must have been awhile because I’ve been an ILV holder since like August and haven’t seen any Rev Dis yet.

Maybe I’m more so just curious why the fees were never distributed to holders in all this time?

[worn hearth]

How much is in the safety pool already?

[slim crystal]

Yeah would be nice to know about how much royalties we are talking about right now and if the 15 mio will be filled easily with the royalties from the past. Thanks 🙏

[tawny pivot]

I think that's important to know, yes, but regardless of the specifics I would still support the general concept being proposed here.

[sharp latch]

796 ETH - currently in safety pool
660 ETH - in IMX wallet (mix of latest D1sk sales, and all royalties of illuvitars and land)

[tawny pivot]

over a million dollars then

[sharp latch]

2.69M if passed. 1.47M currently in safety pool

[tawny pivot]

So about 80% increase if my mental math is close

I'd say that's well worth the increased safety net.

I appreciate Kieran's willingness to backstop a catastrophe with his personal bag, but I think it's the wrong way to look at things for us to be willing to even factor that in to current safety pool status.

Edit: Just throwing this out there in case there are people hesitant to support this ICCP because they feel safe with Kieran's commitment in place. Just my $0.02

[wicked ingot]

I do think given that it wouldn’t be an incredibly significant distribution to holders, that it would probably be better utilized for more safety net. But it would separately be helpful for this information to be communicated thoroughly so holders can actually make an informed decision. I know that RevDis is meant to be random, but it would be nice to know if there is any precedent in place for how long fees were going to just accumulate before any consideration of distribution to holders.

[sharp latch]

I have had a hard time finding these numbers. I have been told in the past that a minimum threshold is needed to withdraw Land Royalties to RevDis and this value had not been met yet (perhaps 500ETH). It would make sense for things in IMX to have a minimum because it would not make sense gas wise to constantly be migrating off of IMX.

[obtuse fox]

I believe the cap for the safety pool is 15million. Anything after that it goes to stakers.

[kind steeple]

The team already consider all this as part of the runway, so it’s just to formalize something already done at this point 😐

Maybe something to tag along in this proposal is for the dao to do some risk mitigation and sell some of the eth for usdc… but according to the financial document we’ve a year of runway so maybe not needed…

[hidden jewel]

On the agenda for tonight’s council meeting, I know notes have not been published in a bit but a lot of the discussions have been going on and we will update everyone asap

[tropic jetty]

As far as I'm aware the team is confident that the safety pool isn't required. If this is the case I see no reason that justifies increasing the scope of the safety pool. Doing so may undermine the integrity of the DAO in the eyes of those that have already invested in illuviums products and have yet to see a return. Uncertain macroeconomics are effecting us all not just illuvium and honouring commitments already made would demonstrate the DAOs integrity and bolster confidence in these uncertain times.

[kind steeple]

VC deal was supposed to be closed end of last month too.

So yeah, maybe nothing like that is needed anymore.

To take an educated decision, better to have all the informations.

[neon plume]

As far as I am aware council have spoken to the team already about selling the ETH-USDC

[neon plume]

Yes I am talking about the ETH in the safety pool, the subject has been broached.

[kind steeple]

Sorry misread and misunderstood.

Rich up there said they will talk.

[neon plume]

No worries.

[solemn lynx]

I think this needs to be changed to add additional clarity. Examples:

-Is this ongoing? (meaning is this something we are doing today or is this functionality persistent for the DAO)
-At what point does this functionality trigger? (safety pool reaches less than 25% = start refilling; think of how a toilet works lol)
-What's the cap? (I know overall it's 15mil, maybe we can add a cap % like a partial fill; meaning 50% goes to DAO while 50% goes to safety pool so as to please both "sides")

To me, devil is in the details and this is too broad for me to be comfortable with.

[humble elm]

Fair feedback - This is my perspective.

This will be ongoing, until the Safety Pool is full or it's decided that runway is in a comfortable place.

The functionality would trigger upon passing the proposal - There is no need for a rolling Safety Pool as it relates to this proposal. The current implementation is a one-time fill, not a "let's keep it at 25% or higher" system.

The cap is 100% of revenue from royalties in this proposal.

[neon plume]

I agree with this, more clarity is always better. I agree with @humble elm statement above.

[solemn lynx]

Sounds good. I know it can't account for ALL the minute details, but having some timeframes and frequency language added in could help. On a general basis, I look at these as things that guide the DAO (like a Tax guide); without certain details, bad actors (potentially 2 decades from now; different leadership team or something) could take advantage of generalities.

[sharp latch]

For clarity is the following correct?

This ICCP includes all royalties (3% from after market sale) from all future waves/sets/land sales until safety pool is maxed out at 15million?

But the original Safety Pool ICCP only was referenced to 1st sale of illuvitars so Set 1 Wave 1. For future waves we would need another ICCP.

[humble elm]

Correct, to divert revenue from sales for future waves, there would need to be an ICCP. This proposal only touches on royalties.

[hidden jewel]

[PASSED] ICCP-6 Illuvitar & Land Royalties

[heady silo]

We should celebrate with a Surprise PVP match

[neon plume]

Thanks to all who showed support on the original idea thread and for the <@&814435151307866142> for getting it voted on quickly. I understand the result was mixed as all things merits on both sides of the discussion. 🍻

[tropic jetty]

This ICCP shouldn't have passed. It means well but doesn't justify itself or offer sufficient detail. As the saying goes

"The road to hell is paved with good intentions"

[heady silo]

Getting 15Million locked up as soon as we can before open Beta saves us a lot of confusion imo.fill it up and move forward.

[tropic jetty]

And what assurances do we have that this is the end of the safety pool saga? What other revenues will fall victim to the safety pool going forward I wonder. Because this discussion was originally about secondary market sales of illuvitars not land revenue. Yet here we are 🤷‍♂️

People here have big ideas about more ways this pool can undermine stakers going forward. There's more paving slabs coming for this road we've started going down guaranteed.

[worn hearth]

? Passed ? I see 2 for, 2 against in the explanations…. @lyric gateuncil chambers

[worldly garnet]

that's a completely different problem. while all challenges need to be viewed together for holistic solutions, dealing with the concerns you raise are a separate issue than by not approving this IIP.

[copper lantern]

The way I see it, ILV stakers shouldn't expect returns during tough times anyways. This is a high risk high reward type of play, and mitigating that risk with an increased safety pool doesn't really reduce the high reward, only mediocre rewards.

So doing whatever we can to make sure illuvium's vision can see the light of day and thrive is in all ILV stakers best interest. Not a little bit of res dis now.

[tawny pivot]

I wouldn’t go as far as to say stakers shouldn’t expect returns during tough times

[copper lantern]

Why's that?

[tawny pivot]

You can’t build trust with your community with something that blanketed. People deserve to have some sense of structure and for that structure to be communicated clearly. This ICCP is clear given the existing circumstances but these circumstances will not always be in play. I think it’s dangerous to assume or propose that during any challenging macroeconomic periods, stakers don’t get their revdis because it gets shut off automatically. I’m not sure if that’s what you meant or if I’m misinterpreting it, and also I haven’t seen this suggested elsewhere so it may go without saying.

[copper lantern]

Yeah not sure if it'd be wise to shut off revdis in the future if say illuvium was a massive success, but was in a bust part of a cycle. People would be used to rewards at that point.

[neon plume]

The idea here is the safety pool is being filled with revenue before game launch. Ultimately if they don't need to use the safety pool funds it will be re distributed back to stake holders. Doesn't come at any net negative, at least in my opinion.

[humble elm]

No assurances are given that this is the end of the "safety pool saga".

Let's talk about what the possibilities are though.

It's possible that this could be the last proposal to fund the Safety Pool.
It's also possible that additional funding could be required for the Safety Pool.

At some point, an ICCP will be required to utilize the Safety Pool, whether that ICCP is to provide resources for development, or to send funds from the Safety Pool to the vault for distribution.

No part of this decision was easy for anyone involved. If you feel that diverting revenue to the Safety Pool was the wrong decision in this case, that's fair, and you are absolutely entitled to feel that way. I have mixed feelings about it as well.

However, no part of this is about casually undermining stakers. If I look at a hypothetical scenario in the future where we require additional funding to ensure the success of Illuvium, and we were to have difficulty getting funding at that time, my feeling is that we'd be absolutely remiss to have distributed revenue at this time, particularly when the community was largely in favour of diverting royalties into the Safety Pool. To me, that would be a substantially worse situation than diverting revenue now, and would absolutely be worse for ILV holders and stakers holistically.

Like any other proposal, each council member decides based on the information available, and tries to make the correct decision for the long term success of the DAO. If you find your views aligned with "No" votes on this proposal, an election is upcoming, and I'd encourage you to vote appropriately.

My biggest hope with the passing of this proposal is that no future council finds themselves facing a decision like this.

[tropic jetty]

At best 40 to 50 people have been apart of this discussion. To say this is community backed when we've got 35k token holders out there is just wrong. Without knowing how they feel, council members should assume they are against a ICCP like this because they acquired tokens under the assurance that illuvium would honour its commitments set out in the WP. You've placed a hypothetical over real stakers and done this against the will of the team as they've already stressed the pool isn't needed.

As for voting we all know the elections have a low turnout. To say the answer to change votes like this is to vote for someone else is also wrong. The answer here is for councillors to remember they represent everyone. All 35000+ of us, not just the 40 in here.

A higher burden of proof should have been required for something like this to pass. Yet it passed based purely on good intentions and hypotheticals. Where are the facts that support the need for this?

[tropic jetty]

For now yes, but I remember a time when messing with revdis in any way was a red line. As @humble elm says, there's no assurances that this ends here. The 40 to 50 people in here could very easily call for the 15M to be used for something. And if we get council members in the future that think like the ones we have today. That'll be seen as the whole community giving green light to the idea.

[tawny pivot]

This is a very warped way of thinking about how governance works tbh.

Edit: or at the very least inaccurate in regards to representative democracy.

[humble elm]

All 35000+ investors invested in ILV as a token that distributes revenue generated by a game. If we don't have runway to produce and release a game, that's a bigger detriment to stakers than ~$0.15/ILV of revdis. This decision absolutely was a judgement call, and I'm willing to accept the possibility that I'm wrong about how much runway is necessary to get our products to market. However, being wrong when funds are in the safety pool means we can still distribute those funds. Being wrong the other direction takes an option off the table.

Part of the research guiding my decision is looking at adoption curves for other games. While I'd be extremely excited to have Illuvium launch and generate insane amounts of revenue out of the gate, that's not how adoption works for most games.

Another factor is that the sizing of the safety pool was done in consultation with the team, not against the will of the team. $15M was the sizing chosen based on the advice of the most qualified individuals to make a recommendation.

I do think it's absolutely invalid to assume that everyone who isn't involved in governance would be for or against a proposal. While it's possible there's some bias in our active community, the most reasonable way to proceed is to treat the community engagement here as roughly representative of the whole. Anything else will result in complete paralysis of governance processes.

[tropic jetty]

Ah yes because prioritising the wants of a active minority over the silent majority has always worked out so well throughout history.

The idea that the bias on display in here is in any way a true reflection of what the whole community thinks is wild.

Anyway the vote has happened now. We'll all get to see how this plays out in the months to come

[tawny pivot]

Appreciate the thoughts, and always support ways to make a silent majority louder. 🫡

[untold oasis]

I appreciate your passionate point of view. I just have one question. How do we gage what the silent majority thinks and wants? I know participation in governance is very low even amongst the people who are in discord quite often. This is a fundamental question that I have since the last elections. If we have so many stakers who are not vocal and active how do we engage with them to get there opinions and how do we keep them informed. Legit question not trolling. 😅

[tropic jetty]

Simple, they bought ILV, interacted with the smart contract and staked under the commitments set by illuvium at the time. Their actions demonstrate consent to receive revdis as laid out in the WP. These individuals may now find themselves locked into a staking position that no longer honours that commitment. It raises serious questions like what else will the DAO do going forward that will effect thousands off the back of such a small group of active members.

[untold oasis]

I agree with you that it is a slippery slope and contractually really not good. I guess from my point of view though I want the DAO to make decisions that are in the best interests of illuvium to succeed. I hope that this is a situation that doesn’t happen again and that the safety pool and Keirans back stop aren’t required. I also would not be happy as an investor if the DAO allowed the financial situation of the project to sail so close to the wind that it failed all because of a few dollars of rev dis that I can forgo at the moment. The problem of information flow and consent from stakers not in discord remains a problem.

[tropic jetty]

I absolutely see the other side to this debate and I'm not blind to the risks the project is facing. However I feel it's important that proposals like this are challenged. The discussion was far too one-sided for my liking.

[untold oasis]

I totally respect your point of view. I’m glad you are voicing it. There should always be room for open and thoughtful debate.

[sharp latch]

If you read through the WP nothing is ever even stated about RevDis. It has always been interview's with Kieran. I did a through look through last year if you can find something in an IIP or the WP I would love to see it. So I think no official promises have been broken.

My digging:
#1042057080141516821 message

Also I think we can not wait forever for the majority to make their voices heard (I have no idea what they would say since they are silent) and assuming they would think differently then the vocal minority would like Blickter said lead us to inaction. The Safety Pool has been established for 3 months I think that is ample time for someone that is seriously invested to check in on the project. If they did not like the ideas around the safety pool it is up to them to put forward an IIP.

[tropic jetty]

I'll admit it was September 2021 the last time I read it 😅. But sure I'll take another look later. I'll let you know if I find anything relevant

[neon plume]

Absolutely respect your point of view on this. People invested into a DAO with an electable council and have the option to vote a council member in, knowing ideas like this can be put forward and passed.

If the silent majority don't take participation in council elections, similarly to traditional political voting then they don't have much to complain about.

If you did and don't like that the idea was passed, make your voice in the discord known and use your vote in elections to ensure your position/views are taken into account. Better yet run personally and be the change you want to see.

[tropic jetty]

Hmm this WP is V3.4. Certainly not the version I was reading back in 2021. But yes you are correct, there's no longer any mention of revdis.

https://www.youtube.com/live/7GKZ_c84J0o?feature=share

We do have this though. A detailed explainer video explaining your rights and entitlements as an ILV staker. Revdis is extensively covered in this official video.

[sharp latch]

Yes I agree it is all laid out here. I have been pushing for some more official documentation. I believe if it is not in a the form of an IIP it should not be thought of as contractual or immutable. WP has been edited old versions are no longer available, articles can be changed, and videos can be taken down.

Also to be clear... I appreciate you looking back and checking and you comments in this thread.

[tropic jetty]

I honestly thought it was still there and I'm a little surprised it isn't tbh. But yes I agree with you that there should be detailed documentation on revenue distribution.

[ripe gazelle]

Does it mean anything can change now and we get rugged at any time? Seems like the core fundamental ideas of this project can be changed at anytime as there are no other solutions.

[sharp latch]

I think the fundamental core is it is a DAO. The council can make changes. We (as stakers) can change the council.

[tropic jetty]

Not only change but retroactively change too. As demonstrated by this ICCP

[tardy tree]

#1066107679879213187 message

I would note that this is the most recent ICCP we passed this epoch defining the structure for revenue distribution. ICCP-6 is positioned as a specific carve-out while filling the Safety Pool during this pre-launch phase but this is the expectation of what components are eligible for revdis.

[sharp latch]

Yes I appreciate this ICCP in that it mentions RevDis and how different Revenue is treated. Ultimately it does not discuss how the Vault works and how distributions work. Even IIP-22 does not really discuss this. The WP is edited down not to discuss this.

I am fine with this not being fully documented if it has regulatory implications or for some other reason I am ignorant to, but if those limitations are not on us it should be well defined before RevDis really kicks in.

[plush tapir]

Wow all very scary stuff. A DAO is just an web3 experiment. It will be interesting to soo what happens.

[hidden jewel]

I’ll just say this is a similar thing that happened to pre/seed investors in that they bought under impression of staking rewards and the DAO cancelled it, I think this is nature of the DAO things can change for the greater good

[lucid ermine]

Yeah its a balancing act of managing both sides of the equation of course.

Could you imagine slam campaigns in future governance? Kieran took away your revdis. Vote aaron for President 🤣🤣🤣

(I'm obviously joking)

[untold oasis]

Don’t joke. That could get bloody with 3 Warwick brothers. Lol

[lucid ermine]

Just a funny thought. 90% of our political ads are slam campaigns. Can't you do anything based on your own merit you know 🤣🤣

[tropic jetty]

I wasn't part of that conversation so it's difficult to comment now without knowing all the arguments made at the time.

The DAO should always aim to standby commitments made to investors imo. Pre/seed or retail

I do see the point you are raising though.

[copper lantern]

IMO the DAOs job is to do what's best for the DAO, and the DAO is the stakers. What's best for stakers (again IMO) is the safety pool, not to "standby commitments made to investors" if that means risking your stake as a whole by letting the project fail.

It is hard to know what the silent majority want, and we should attempt to figure that out. I just fundamentally disagree with your conclusion that the silent majority doesn't want the staking pool because they bought ILV.

[tropic jetty]

I see your point of view but I see this situation very differently. This proposal was a litmus test to demonstrate how the DAO upholds commitments already made. Imo the DAO has failed this test with the passing of this ICCP (retroactively adding land revenue in particular). At no point was an actual fact based case made for this ICCP. Where's the research/analysis done on the current runway/expenditure to show the need for it. Where's the status update/details of the raise kieran mentioned. Where's the evidence that revenues won't meet the needs of the project at launch and beyond. Where's the commitment from the team the expenses won't devour this pool and put us back to square one. All these are details that no one here bothered to provide yet they were happy to go ahead with the proposal anyway.

We know the team overspend and the idea that the solution is for the community to perpetually foot the bill with zero assurances it won't happen again is nieve. People will be quick to say this pool is a one time thing but I see little sentiment to suggest that's actually the case. This pool will continue to mutate with more "well intentioned" proposals. Revdis should be off limits and a absolute last resort. Not the first answer to every funding issue that comes our way .

[copper lantern]

I think we have 14 months revenue left with the last info I saw? They put out an article on current burn/runway so it's not like we're working with 0 research/analysis. We're getting close to last resort.. That's not immanent death but as someone mentioned earlier, we can put money into the pool and not use it. Then give it back as rev dis later. If they do a raise and none of this is needed we get it as rev dis anyways. No harm done

If we don't do this we cannot reverse the rev dis that would've already been distributed. So playing it safe is just the smart safe move.

Where's the evidence the team overspends? The scope of this project is gigantic, it costs a lot of money to build..

[humble elm]

The team has been making continual efforts to cut costs, extending runway is a problem that is being approached from both ends.
#1059914967161241640 message
Note that there WILL be increased costs with launch - Even if we were to assume no additional costs to market game launch, AWS is not free.
There's no evidence either way on what revenue will be on launch. We've seen what a crypto game can do with the Axie explosion during the last bull run, but I'd be wary to assume that as a base case. I can provide some links to adoption curves for other games if that's helpful, but there's really a lot of variance in that regard, and what games you look at matters. Some of the things I think are important to assess are:
This will be Illuvium's first title, so we won't have a large, dedicated fanbase to draw upon (comparing to, for example, modern Blizzard releases doesn't make sense)
Illuvium has potential for significantly faster adoption than other game launches due to the P2E elements.
TFT has something on the order of 30M MAU, some portion of which can likely be drawn to Illuvium Arena as a similar game in the genre.

Estimating revenue on launch is certainly possible, but is not something I'd personally put a lot of stock in. I'm a conservative person, and my general approach is to plan for a worst case scenario, and be pleasantly surprised by anything exceeding that.

This is some of the information that helped inform my decision. It's not an exhaustive list.

I also need to note that the Safety Pool is held by the DAO, it's in a separate wallet for a reason. It can't be "devoured" by the team, it's up to the DAO to decide how the Safety Pool is utilized. It's possible the DAO decides to utilize it to fund development, absolutely, but that's a decision that WILL be made by the DAO.

I do understand your concerns, and appreciate you voicing them, but I firmly disagree with your perspective that this decision was made flippantly, or wasn't based on data and facts.

[tropic jetty]

I appreciate you taking the time to highlight some of info you used to come to the opinion you currently hold.

With the vote already passed and it becoming more and more obvious that this is more of a difference in values than anything else. I'm going to make this my final post on the matter. If I don't there's a risk we'll just go around in circles on this topic never really meeting in the middle.

Thanks to everyone that took the time to respond and discuss this proposal with me

[near light]

<@&814435151307866142> is it true that we sold the ETH from the proceeds of Land and Beyond to convert to USDC already? If true, wanted to get clarity if this sort of action does not require a separate proposal especially since there was a previous proposal that was passed to convert the DAO's ETH to USDC.

[humble elm]

Everything held in the Safety Pool is to be converted to USDT per IIP-29. https://snapshot.org/#/ilvgov.eth/proposal/0x7b20e1ea653608da5b31a5f2b54147c73a0854bd79439d08d4b88afdafbbfc15
You can view the Safety Pool wallet here:
https://etherscan.io/address/0xba085e0a14801c8c7a919a90304e75cabb7e3917

There are still 400 ETH that are due to be converted to USDT in the Safety Pool wallet. Note that it's a manual process, so it does require signers to get together to approve the conversion.

[near light]

So we're doing it automatically or via threshold? And were no longer taking into consideration the timing?

[humble elm]

TL;DR: There's not going to a proposal for every conversion action, as IIP-29 is overarching for all funds held in the Safety Pool. There's no element of trying to time the market, nor is there a threshold for converting funds. It's pretty much a matter of having people with multisig access sign off on the transaction.

For reference, the 400 ETH currently in that wallet has been in there for just under 2 days, as of now.

[lucid ermine]

I would have said basically the same thing as Blickter. The IIP covered the details already