Q2 Financial Transparency Report
Key Links:
r3gen Finance is pleased to present Treasure’s 2024 Q2 financial review. The report takes a deep dive into the financials and performance from April 2024 to June 2024, focusing on revenue and expenditures in Q2 2024 compared to Q1 2024. 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, upto-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
Q2 Business Development update
The Treasure ecosystem experienced signifcant growth in Q2, driven by advancements from partnered game studios and the core contributing team. These developments spanned product enhancements, game updates, strategic partnerships, and operational improvements.
Treasure’s Team Updates
The Treasure team underwent several changes this quarter. Notably, there were departures from the engineering team, our highest payroll cost center. However, we also welcomed new talent, with the most notable hire being Matt Farrokhzad as the Director of Infrastructure. Matt brings a wealth of experience to the leadership team and will play a crucial role in shaping Treasure’s strategic direction.
Governance
TIP-39 Proposal: This proposal seeks authorization for the DAO multisig to reclaim all unclaimed and unvested MAGIC tokens from past contributors. The reclaimed funds will be reallocated for two primary purposes:
- Revocable allocations for contributors who received smaller rewards after the original team allocation was fully distributed in 2021.
- Supporting MAGIC liquidity and partner token launches in preparation for the Treasure Chain.
Additionally, community feedback led to a proposal to halt Bridgeworld emissions in favor of the Treasure Chain. Another major governance proposal was the Arbitrum Gaming Catalyst Program, which approved the unlocking of 200 million ARB to invest in Arbitrum games. This proposal passed overwhelmingly, with 76% voting in favor.
New Features and Updates
Smolbound Official Trailer: One of the quarter’s highlights was the launch of the Smolbound trailer, showcasing a next-gen blockchain game that combines life simulation, light combat, multiplayer factions, and decentralized trading.
Treasure Chests: On April 23rd, players could redeem their gems for treasure chests containing various rewards, including MAGIC tokens, consumables, and in-game items.
Treasure Chain Testnet: The launch of Treasure Ruby, the first version of the Treasure Chain testnet, solidified partnerships with Eigen Layer, LayerZero Labs, Caldera, and Thirdweb.
Thirdweb Partnership: This partnership led to the release of Emberwing and Treasure Connect, introducing a new identity/login system and in-game contract calls.
We remain committed to advancing the Treasure ecosystem and look forward to more exciting developments in the coming months. Stay tuned for further updates and continue to engage with us as we build the future of blockchain gaming.
Key Financial Highlights
Treasury
- Current Treasury holdings total $76.59M, 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 saw a decrease reaching a low of $0.61 at the end of Q2 2024. Despite the price decline, the MAGIC token remains a vital component of our treasury and the ecosystem. Its value is intrinsically tied to the broader adoption and success of the Treasure platform. The DAO continues to work with various partners on an ongoing basis to firm up the treasury holdings and diversify into stablecoin assets where appropriate.
Revenue
- Total revenue generated in Q2 is $127,004. Broken down into Marketplace fees of $105,661, Ingame revenue of $13,104 and the new Magicswap revenue stream generated $8,239.
- Revenue is primarily generated in MAGIC, so both volume and price impact monthly revenue figures. Q2 2024 had a mixed performance in comparison with Q1 2024 with a decrease in revenue in USD but an increase in overall MAGIC revenue. The increase is largely due to the token price decreasing.
Expenses
- Expenses totaled $1.899m for Q2 down 10% from Q1 (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.
- Total Liquidity and Mining Emissions for Q2 was $64,5. The cost has significantly reduced from Q1 due to TIP35, which reduced the distributed rewards. The MAGIC emissions are seeded annually in a single transaction. This is consistent with the decrease in Q1 2024.
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 23 months at the end of June.
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 June would be 31 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.