#ICCP-XX: Safety Pool Threshold Increase from $5M to $10M

1 messages · Page 1 of 1 (latest)

steep umbra
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Hey all,

Myself and council have been working on the below ICCP proposal to extend the original Safety pool threshold from $5m to $10m

As the original author of the Safety Pool, my intent was to provide a financial buffer for the project during challenging market conditions, ensuring operational stability and sustained growth. Current revenue levels and monthly overheads indicate that bolstering the Safety Pool is needed.

While this may temporarily reduce distributions to ILV stakers/land holders, the trade-off strengthens our runway, enabling the team to deliver superior product launches. This move is common in tradfi in which dividend pay outs are often suspend when revenue targets are missed, prioritizing long-term stability over short-term gains.

By fortifying the Safety Pool, we increase the likelihood of consistent, robust revenue distributions tied to future product successes such as the MMO lite in development. I believe this short-term sacrifice will pave the way for significant long-term value creation for the DAO.

I’m open to all perspectives, including the upsides and downsides, and would greatly appreciate your support for this proposal, which I feel trades a short-term reduction in revenue distributions for enhanced long-term return potential.

All the best,

Josh Atlas_Love To_The_Moon

https://docs.google.com/document/d/e/2PACX-1vTZRZjltcWBN8Kz5A5NbgpaVaO3OffLV1Q4EiuIfvaEVbKVjB46H6r8dn7_uVlWW4JZ3eWbLa74WdGn/pub

<@&814435151307866142> @soft sand @full shoal

boreal glade
winged scroll
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I hate to think what pausing land holder payouts would do to already wrecked land prices. Is there no other option?

steep umbra
heavy fjord
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Why $10m? Why not 7, 15 or 20 million?

steep umbra
normal parcel
# heavy fjord Why $10m? Why not 7, 15 or 20 million?

Agreed 👍

Last burn report I remember reading was much earlier this year, unless I missed a newer one. Quick search seems like February 2025

What does the current monthly burn look like 🔥?

How many months remain as of today?

How many months would the additional $5mil add at current spend?

steep umbra
heavy fjord
steep umbra
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It will be margin of error tbh. Doesn't change the need for this but always up to date info is best.

heavy fjord
steep umbra
# heavy fjord When I asked about why the 10m your replied with "I felt...". That's what this i...

The last safety pool was $15m and we filled it to $5m and had a $10m cap raise, upon which we paused further safety pool allocations.

This proposal aims to add a further $5m into the safety pool totaling $10m and mirrors the original $5m committed.

Due diligence has been done and $ amounts selected purposefully.

The 'I felt' was my view on the amount as I think is gives the required protection and allows the team enough flexibility to better deliver development updates and better timing for a potential capital raise.

Whilst also not being too large a sum to take away revenue from the DAO participants.

normal parcel
errant pasture
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I support this proposal. Ultimately, Illuvium’s success depends on delivering great and enjoyable games that is when we will see meaningful and sustainable revenue flowing into the DAO. While there have been delays in the past, the last six months have clearly shown that the team is focused and consistently delivering more polished products.

Increasing the Safety Pool strengthens confidence for all stakeholders, investors, players, and contributors alike by ensuring that we have the resilience needed to reach the end goal. As Ricky rightly mentioned, it does not hurt to have this additional buffer, and should we reach a point where the DAO determines that such reserves are no longer required, those funds can always be redistributed back to stakers.

My priority is to safeguard the interests of community members, and I believe this adjustment strikes the right balance between financial prudence and long-term growth for everyone involved.

faint moth
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Like I believe the original IIP has included, this should state that this safety pool will be distributed to as revdis to ILV stakers and landowners once Illuvium reaches a certain monthly revenue goal.
The safety pool should be borrowing from the community, not taking.

normal parcel
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25 👍 - but agreed with Nijafe there is something that needs to be addressed for the landholders

steep umbra
heavy fjord
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And so the ILV token bleed continues. No utility = no value Atlas_Dead

heavy fjord
# steep umbra The last safety pool was $15m and we filled it to $5m and had a $10m cap raise, ...

You can see my issue here, Josh you’ve chosen this moment to request a Safety Pool increase, yet despite saying due diligence has been done, none of that analysis has been shared with the community, even when I’ve asked directly.

I still don’t understand:

  1. Why the DAO suddenly needs $10M instead of $5M.

  2. Why this decision has to be made now, before we’ve even seen IPL/MMO adoption metrics.

If the analysis exists, publish it. If it doesn't, we’re effectively being asked to approve another pause in revenue distributions on blind trust.

We also have @errant pasture saying this is a confidence play yet I could easily claim this shows a lack of confidence. People are also claiming there's no downside to doing this. And If you believe that, then I've got an ILV chart to show you

wanton mica
# heavy fjord You can see my issue here, Josh you’ve chosen this moment to request a Safety Po...

IMC has already seen the June burn report so this is based on actual data. The Q2 burn report should be published to the community any day now. Apologies for the delay on this.

I think everyone in here wants this project to thrive or at the very least for it to survive and right now we have around 15 months of runway.

  1. Atm we're not in a good position to be giving out revdis when the very existence of the project is on the line. The additional $5M to the safety pool will give us a bigger safety net so we can be a bit more secure we're able to deliver on the team's vision and start generating good revenue. The threshold hasn't been decided yet, but once we hit that monthly revenue threshold we'll start distributing the safety pool back to stakers and land holders.

  2. We're obviously following the IPL adoption metrics and we've seen a nice increase in numbers but we're still nowhere near the number of players we've had in the past. As for the MMO I don't think that'll be generating us any revenue any time soon. And that's why we're making this decision now, because we're aware of the size scope that is required to building an MMO even if it's a "lite" version.

We're a gaming DAO so above all else what we need is to have quality games that attract gamers and generate us revenue, I get that this might be a let down for the short term, but we're trying to look out for the long term of the DAO and be sure we have the money needed to make this work.

On a side note, the land holders outstanding debt from IIP-54 and ICCP-17 should be paid in the next couple of weeks.

azure vortex
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I am not against this but there needs to be a reason for people to hold onto their ILV and stake it, otherwise we may see ILV tank further which causes problems for a raise.
Can you guys come up with a creative reason for people to stake ILV if it isn't outright paying them through revenue distribution?

From a completely personal standpoint, I don't care about revenue distribution at this stage. There isn't enough money coming in for us to be getting a lot anyway. For the small amount each of us would get I would prefer to see it going to the team to get the games built so we can all make some money in the future.

BUT GHamster has some very valid points about wanting numbers before financial decisions are made.

winged scroll
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How long would it take to fill the safety pool threshold if we increase it? And how much extra runway would that give us?

Also is that worth the potential halving of ILV and land value ?

heavy fjord
# wanton mica IMC has already seen the June burn report so this is based on actual data. The Q...

Thanks @wanton mica I appreciate your reply. But if I may, I have more to say on the matter

To dive a little deeper into my point, I need to touch on several issues that may seem off-topic at first, but they’re all connected — so bear with me.

The current revenue situation (or lack of it) is largely of Illuvium’s own making. There’s far too much emphasis on Gauntlet Ranked Mode right now. We have the IPL and ILV rewards driving constant weekly sell pressure on a free-to-play mode that generates no revenue.

Instead of trying to balance the books off the backs of stakers — our most loyal community members — we should be incentivising players to spend by making Leviathan Gauntlet the true competitive arena. We’ve already seen the effect Leviathan can have: during the last tournament, players were grinding Overworld again, buying fuel, and improving their collections. We know this model works… yet we continue to neglect it.

My suggestion: transfer the ILV rewards from Ranked Mode to Leviathan. This would:

  1. Reduce free-to-play extraction and constant ILV dump pressure.

  2. Create real balance between Ranked and Leviathan modes.

  3. Potentially increase DAO revenue by driving spending in the one mode that actually monetizes player competition.

Stakers are carrying the risk here. If we’re going to pause revdis and expand the Safety Pool, the least we can do is build systems that actually generate revenue instead of endlessly diluting holders while rewarding free players who have zero incentive to stay invested.

#

On the question of timing and need:

As you’ve highlighted yourself, we currently have 12+ months of runway. That’s not a desperate position by any stretch. On top of that, Kieran has publicly stated multiple times that he’s pursuing a capital raise to extend this runway even further.

Add to that the recent talks around introducing additional incentives for ILV staking — which, if implemented, would naturally drive more ILV out of circulation and potentially increase token demand.

If both these points are true — a pending capital raise and upcoming staking incentives — then the timing of this proposal feels bizarre at best. Why rush to lock away another $5M right now instead of waiting until we:

  1. See the actual IPL/MMO adoption metrics play out.

  2. Review the Q2 burn report (which you’ve said exists but hasn’t been published).

  3. Understand how the capital raise and staking changes affect our position.

This doesn’t feel like prudent treasury management — it feels premature and poorly coordinated given what we already know is coming.

#

On the Safety Pool itself:

I accept that this proposal will likely pass, but if we’re moving forward, then proper checks and balances must be put in place. Right now, this feels too open-ended.

• The Safety Pool should have an expiry date — a clear point at which it expires unless the council makes a case to renew it.
• The council should be required to periodically justify the need to maintain it, supported by published financial data.
• We need clear, transparent revenue thresholds agreed upon beforehand, so the community knows exactly when Safety Pool funds will begin flowing back to stakers.
• And finally, it should be explicitly stated that funds within the Safety Pool cannot be used for anything other than securing the project’s financial stability.

Without these protections, we’re essentially being asked to hand over another $5M of staker value on blind trust — and that’s not how a DAO should operate.

vital hearth
# heavy fjord Thanks <@179925123065708544> I appreciate your reply. But if I may, I have more ...

Thank you for the thoughtful and detailed response. This level of engagement is exactly what helps strengthen the DAO and push the project forward.

On Revenue Distribution and the Safety Pool
The proposal to increase the Safety Pool to $10 million is intended to provide Illuvium with a stronger financial buffer, allowing it to navigate uncertain market conditions and continue executing its long-term plans without being forced into reactive or short-sighted decisions. While the current runway is estimated at around 15 months, that time should not be viewed as a reason to delay action, but rather as a window of opportunity to prepare responsibly.

Pausing revenue distributions is not a decision taken lightly. It represents a short-term sacrifice by stakers to prioritise the long-term stability of the project. At the same time, I acknowledge that this pause may have a short-term impact on the token price. That said, market movements are often driven by sentiment and speculation rather than sound, research-based evaluation of the underlying project. Still, the concern is valid and should not be dismissed.

On ILV Emissions and Sell Pressure
Concerns around ILV dilution are understandable, but it is important to note that the actual sell pressure from weekly rewards remains relatively small when considered in the context of the broader token economy. Looking ahead, this should be further mitigated by gating rewards behind the Battle Pass system.

On a more personal note, I hold the view that free-to-play players are already well-rewarded through leaderboard access to RLP, which in turn allows them to compete for significant tournament rewards. Doubling those incentives may not be necessary.

That said, the IPL and Ranked Mode serve a critical marketing function at this stage of the project. These modes are key to onboarding new players, increasing visibility, and laying the groundwork for long-term engagement.

#

On Leviathan Mode
I fully agree that Leviathan should become the primary monetised competitive layer, and there is already progress being made in that direction. Incentivising Leviathan not only reduces ILV extraction from non-spending users but also ensures that rewards are better aligned with in-game spending and overall ecosystem sustainability.

Recent tournaments have demonstrated that the model works. Internally, the team is developing tools to more easily adjust stat and level impacts, and these will be tested in upcoming tournaments. Once we are confident in the balance and experience, the Leviathan system can be properly expanded.

On Timing and Coordination
While it is true that a capital raise is being pursued and staking incentives are under discussion, none of these are confirmed outcomes. Relying on unguaranteed events would not be sound treasury management. The current proposal aims to strengthen our position before risk levels increase, rather than responding after the fact.

On Checks and Balances
Your suggestions regarding oversight and structure around the Safety Pool are entirely reasonable and merit further discussion.
Personally, I would have preferred a shift to a profit distribution model rather than continuing with revenue-based distribution.
My thinking would be like if we get close to a self-sustainable level we could let the safety pool flow back to the stakers. (But that's not on me, since i don't have a finance background there are for sure other bright lights who can work out something better than i could)

steep umbra
heavy fjord
wanton mica
# heavy fjord Thanks <@179925123065708544> I appreciate your reply. But if I may, I have more ...

thanks a lot for the detailed reply, I'll remind you guys that this is still a governance idea. The more feedback we collect the better we can improve the proposal.

As to your points you're right on the Leviathan part, and council also wants to start pushing more Leviathan but as of now we agreed to wait until our player base increases to the point we don't start hurting the queue times for the F2P. Unfortunately we're still not there yet so we're still waiting. The whole strategy with Arena Gauntlet right now is to increase our player numbers with as little crypto friction as possible for web2. But that's not to say we don't intent to generate revenue out of them cause we do and it's already known that the leaderboard rewards will be gated behind the Battle Pass which will come with the next update in September (this last part might be new).

In regards to timing and the capital raise you're right it's not that the situation is desperate right now but the thing is we don't want to get to that point either. The ILV price is very low atm and the longer we can hold off without doing a capital raise the better it'll be for the DAO since we won't have to give away so many tokens.

As for additional incentives for staking, that was on the horizon but it has been pushed back and won't be coming soon.

wanton mica
# heavy fjord On the Safety Pool itself: I accept that this proposal will likely pass, but if...

Labs has already made a ton of sacrifices to extend the runway but we still don't have 2 years of development costs covered by the safety pool which was the target from IIP-29.

As per IIP-29:
"
Sizing the Safety Pool
The Council chose the size of the Safety Pool ($15M USDT) after consulting the internal team, who recommended that amount to cover approximately two years of development and costs based on current expenditure projections and existing stablecoin runway.

Utilizing the Safety Pool
The Safety Pool can only be utilized by the DAO via an ICCP and the amount and reason must be specified. Any portion of the Safety Pool may be utilized in this way. If other revenue sources are sufficient to fund the DAO, the Safety Pool may be transferred to the Vault for regular distributions via ICCP.
"

I personally don't think an expire date should be added, but we can discuss it. I do agree we should clearly define what is the revenue threshold we start distributing it back.

There's also a couple ideas being discussed atm on which feedback would be appreciated.

  • Should we keep these $5M safety pool tokens in ETH instead of selling to stables?
    • Upside potential but safety pool becomes volatile VS stable.
  • If we keep it in ETH should we stake the tokens for yield?
    • Yield earning VS smart contract / custodian risk.
vital hearth
# heavy fjord Love it <@483379436901761025> I really appreciate your response. Though it's cle...

I really appreciate you mate 🙂
We need critical thinkers in the community to give feedback, the more the better.
It's what makes (or can make) discord to such a great tool almost working like a big brainstorming/re-evaluating machine helping to find the best possible solutions for problems that occur or might occur.

My first thinking was pretty much exactly aligned with you when i heard about increasing the safety pool.
There was a lot of thought needed, like thinking about advantages/disadvantages/timing etc. to change my opinion

steep umbra
heavy fjord
# steep umbra Appreciate the feedback.

You're welcome Josh. I'm just trying to stand up for stakers here, that's all. While I fully recognise the challenges the DAO is facing, I believe any proposed solutions need to properly acknowledge the costs being carried by investors.

Those who were brave enough to lock away their ILV or buy land have been under pressure for a long time too, and they haven't exactly had an easy ride either. That reality deserves more recognition in these discussions.

heavy fjord
normal parcel
steep umbra
boreal glade