Q1 Financial Transparency Report
Key Links:
We firstly apologise for the late running of this financial report. Over the last month, we have been migrating sub-ledger tooling providers and ran into some technical issues, which ultimately caused a knock-on effect on the timely publication of this report. We are now fully onboard with the new sub-ledger provider, and reports will be shared in a timely manner post-quarter end.
r3gen Finance is pleased to present Treasure’s 2024 Q1 financial review. The report takes a deep dive into the financials and performance from January 2024 to March 2024, focusing on revenue and expenditures in Q1 2024 compared to Q4 2023. We also show annual numbers and charts where appropriate to build context.
Some key insights have been pulled out onto this forum post; however, we advise everyone reading this to review the full report (link above). This document provides a Profit or Loss Account, Balance Sheet, and Runway Analysis coupled with supporting notes.
The report aims to provide the TreasureDAO community with greater visibility into the current state of DAO operations and financials and a snapshot of recent developments and highlights. This will allow TreasureDAO community members to identify the best ways to contribute to the Treasure ecosystem and analyse its sustainability.
The objectives of this report are:
- To keep DAO members informed and enable them to make the best decisions for themselves, the community, and the expansive and growing Treasure ecosystem
- To increase trust in the core contributors and council team operating on behalf of and for the benefit of all members of TreasureDAO
- To provide DAO members a report of TreasureDAO’s asset holdings, giving the community peace of mind about the DAO’s financial position and ensuring that the DAO’s treasury and funds are not being misappropriated
- To provide a clearer, up-to-date roadmap of what is being developed and what is to come, ensuring further alignment and visibility into the DAO’s broader strategy and overall future direction while balancing commercial pragmatism
Q1 Business Development update
There has been a lot of activity in the Treasure ecosystem kickstarting 2024, from the launch of the Infinity Chains Litepaper to Exclusive Merch it’s been a very exciting first quarter. Treasure’s Continued Growing Team Treasure continued to grow in January after a steady succession of new hires in Q4, welcoming Lorenzo to Treasure’s core team. As Executive Producer, he’ll be driving production and integrations across Treasure’s ecosystem and within Bridgeworld, propelling products and games from production to market.
Chains
Possibly the biggest development in Q1 was the announcement of the Treasure Chain and network of Infinity Chains via the official litepaper in mid February. Detailing a refreshed vision and plan to build an end-to-end ecosystem which will allow games to adopt their own chains and custom technologies while looking to join platforms that connect their products with a larger gaming ecosystem. MAGIC tokens’ role was also further cemented, securing its key functionality within this future vision and integration of the ecosystem, with plans to be burned and staked. Treasure’s litepaper spread far and wide with great coverage on Decrypt soon after it was launched, and by mid March, a partnership with thirdweb had already been established to help power the Treasure Development Kit and more.
Governance
TIP-36 aimed to select the ecosystem to build the Treasure chain, there were numerous proposals by Optimsim, zkSync, SKALE and Arbitrium, in the end the community voted on Arbitrium to be the ecosystem to build on which was also the recommendation of the core team. TIP-33(b) was another important proposal in February with the rationale to mitigate legal risks associated with the organisation’s investment within Battlefly. The proposal aimed to disclose a scope of a mutual release to the DAO and then the process of divesting. A Magicswap related proposal also passed at the tailend of the quarter. MIP-07’s aim was to reduce Magicswap fees from 3% to 0.5%, the rationale being that the current swap fees were substantially higher than competitors.
New Features and Updates
In addition to launching big, long-term plans for infinity chains, plenty of new features and updates were also launched within Q1. At the beginning of February Treasure Chests could be redeemed for Gems, offering a variety of rewards for users. It was so successful that within 2 hours all 1000 chests had been claimed and an additional 1000 Treasure Chests were dropped the next day. Not long after, Treasure Create: The A-List was introduced to the community, with launch partners Alliestrasza, Juicy J and Cantelope spreading the word about Treasure and its library of games to their established gaming audiences. Treasure also launched new channels and discussions within Telegram and Farcaster diversifying its comms platforms outside of the main hub on Discord. By the end of February, Treasure Shop had been launched and exclusive merchandise became available enabling users to represent Treasure through their day-to-day lives. Later, near the end of Q1, applications for the Treasure Ambassador Program opened allowing users to apply to become a spokesperson of Treasure, spreading the vision to the masses particularly in non-English speaking communities outside of Northern America, ensuring Treasure is accessible to all!
Key Financial Highlights
Treasury
- Current Treasury holdings total $67.04M, which is largely composed of MAGIC, ARB and Stablecoin Holdings
- Stablecoins make up 5.6% of the total (market value) treasury holdings.
MAGIC Update
- The MAGIC token price remained pretty consistent at the end of Q1 compared to the closing price of Q4 2023; however, we did see a high of $1.43 during the quarter.
Revenue
- Total revenue generated in Q1 is $217,506. Broken down into Marketplace fees of $108,070, In-game revenue of $52,984 and the new Magicswap revenue stream generated $56,453.
- Revenue is primarily generated in MAGIC, so both volume and price impact monthly revenue figures. Q1 2024 performance was consistent with Q4 2023 with only a slight decrease in revenue in both USD and MAGIC.
Expenses
- Expenses totaled $2.05m for Q1 down 34% from Q4 (excluding Liquidity and Mining Expenses)
- The top expenditures are related to the Management Service Charge and Human Capital Costs. TreasureDAO has several relationships at an arm’s length with various service companies and is charged a management service fee assessed by a managing company for the services provided to maintain, administer, or oversee an organisation.
- Human Capital costs remain one of the largest expenses for the organisation; this quarter, there was a new addition to the team
- Lorenzo - Executive Producer
- Total Liquidity and Mining Emissions for Q1 was $283,754. The cost has significantly reduced from Q4 due to TIP-35, which reduced the distributed rewards. The MAGIC emissions are seeded annually in a single transaction. No such event occurred in Q1.
- The LP incentives have been reduced to 30k per month with a target end date of 31st March.
Runway
In the context of this analysis, the total assets encompass stablecoin holdings and MAGIC holdings that are not earmarked for specific use cases. To clarify, assets like those allocated for contributor vesting packages are excluded, as the sole intention of such wallets is to fund contributor vesting arrangements. The monthly expenditure is calculated using a 3-month moving average to help smooth out short-term fluctuations and provide a more stable and representative view of spending patterns. The Runway is calculated as follows for each asset: Total Asset Holding at end of month / 3-month moving average expenditure in USDC and MAGIC The chart in Figure 15 displays the total holdings runway when taking into account stablecoins and MAGIC, which is 12 months at the end of March. ARB holdings have been excluded from the calculation as the use of ARB for runway purposes would need to be approved by the DAO, however, if we were to include this then the runway at the end of March would be 22 months.
You can find a more detailed insight into runway per the top three major assets of MAGIC, USDC and ARB in the report.
Close
We invite all stakeholders to review this financial report in detail. We hope this report sparks good discussion, feedback is welcome and we will continually iterate and improve it throughout the next few quarters. Please share any thoughts or comments either directly on the forum or through this link on what you would like to see in the next iteration of this report.