Today IMVU launched its VCOIN token, a fixed priced tokenized in-game currency. Unlike other token offerings, it’s hard to call IMVU a startup. The 3D social chat experience has been around for more than 15 years and its ecosystem allows people to design and trade clothing, 3D environments and services. The VCOIN can be bought from IMVU at a fixed price. It’s used as an alternative to in-game credits but can be transferred outside of the platform and cashed out.
The platform processes 27 transactions and 13 billion credits per month. To use VCOIN inside the IMVU experience, a user doesn’t need a crypto wallet.
Last November, IMVU received a no-action letter from the SEC, which does not classify VCOIN as a security. However, it has to comply with numerous requirements such as not listing VCOIN on an exchange, making unlimited quantities available to maintain a fixed token price and not using proceeds to finance its Upgrade. If users choose to transfer the digital currency off the platform and convert to fiat, they must complete know your customer (KYC) procedures. But KYC is not needed if they only use it within IMVU.
“While most virtual platforms allow users to earn in-game credits, those credits cannot be converted into anything that holds value outside of that platform or game,” said John Burris, Chief Strategy Officer, IMVU. “VCOIN is a game-changer enabling comprehensive and dynamic virtual economies where users can easily convert their earnings into fiat or transfer them off platform.”
“The service economy is a huge part of the IMVU experience,” explains Daren Tsui, CEO of IMVU. “For example, if two users want to host an event, they may hire a room decorator, a photographer, a stylist, and more, to make their event happen. Historically, payment for those services was happening off-platform, which adds a layer of friction and vulnerability to the transaction. With VCOIN, users can instantly pay for those services on the platform, and then easily convert those earnings to cash around the globe.”
The currency is an Ethereum ERC-20 token. If users choose to convert it to fiat, they are paid the fixed price, less a transaction fee. We had a question about the current high rate of Ethereum gas costs, which we thought might be prohibitively expensive.
“There is no ‘gas’ associated with on-platform transactions,” John Burris, IMVU Chief Strategy and Blockchain Officer told Ledger Insights via email. “Transactions will hit the blockchain when VCOIN is moved out of a user’s Uphold wallet and to another ethereum wallet or platform. Note that once users move VCOIN to the Uphold platform they can convert to fiat and use that fiat in the way that benefits them most. However, we are aware of gas costs with Ethereum and as we move forward will be taking that into consideration as we look at future VCOIN offerings.” Any VCOIN that’s transacted within the IMVU platform uses a side chain.
Limechain was the technology partner for the digital currency.
Update: The quote from John Burris re gas costs was added.