Ily is "I love you" with the words folded down to their first letters. In a text it does a surprising range of jobs. From a partner it can be a real declaration. From a friend it's often closer to "thanks" or "see you", and Dictionary.com notes it can be earnest or playful.

The three letters have a second, much older life. In American Sign Language, the ILY handshape (thumb, index and little finger raised) combines the signs for I, L and Y into a single gesture meaning "I love you". Wikipedia reports that the book Deaf Heritage dates it to 1905 and that it began among deaf schoolchildren. Jimmy Carter used it during his 1977 inauguration parade, and in 2017 it became an emoji in Unicode 10.0.

It's easy to mistake the sign for the heavy-metal "horns", but they differ in one detail: the horns usually keep the thumb tucked in. Wikipedia notes the two are unrelated.

The text abbreviation is harder to date. No dictionary we checked gives a reliable first record, and we'd rather say so than invent one. What is clear is how it's used now: it gives you a way to say the big words lightly. "Made it home safe, ily" isn't a confession. It's a habit, and a kind one.