Q3 Financial Transparency Report

Reporting
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Recovered from https://forum.treasure.lol/t/q3-financial-transparency-report/127 Originally posted 2024-11-08.

Q3 Financial Transparency Report

Key Links:

r3gen Finance is pleased to present Treasure’s 2024 Q3 financial review. The report takes a deep dive into the financials and performance from July 2024 to September 2024, focusing on revenue and expenditures in Q3 2024 compared to Q2 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 with 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.

As r3gen Finance continues to support TreasureDAO’s commitment to transparency and financial stewardship, this report represents a comprehensive overview of our efforts to foster informed decision-making within the community. We aim to maintain a high standard of accountability and clarity in our reporting, ensuring that all members have the necessary insights to actively contribute to Treasure’s future.

Our accounting methodology adheres strictly to the International Financial Reporting Standards (IFRS), guaranteeing that our financial practices align with globally recognized principles and provide an accurate, consistent representation of TreasureDAO’s financial position.

Key Financial Highlights

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  • Current Treasury holdings total $71.27M, which is largely composed of MAGIC, ARB, SMOL and Stablecoin Holdings.

  • Stablecoins make up 12.89% of the total (market value) treasury holdings.

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Throughout Q3 2024, MAGIC continued its downward trend, starting at $0.61 in June and hitting a low of $0.33 in August. This marked an extension of the broader price decline seen earlier in the year. However, by the end of September, the token showed some recovery, closing the quarter at $0.38. This slight rebound towards the end of the quarter suggests renewed market interest, potentially driven by partnerships within the Treasure ecosystem and efforts to diversify treasury holdings.

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  • Total revenue generated in Q3 is $53,554. Broken down into Marketplace fees of $36,813, Ingame revenue of $13,502 and the Magicswap revenue stream generated $3,235.

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  • Revenue has seen a decrease of 58%. This is mainly due to a decrease in volume throughout the quarter, especially In marketplace fees which saw a 39% reduction from last quarter. Furthermore a weakening of MAGIC since June in $ terms resulted in lower $ growth in fees. It is important to see growth in volume as ultimately this is a more meaningful metric than $ flows which are highly volatile to MAGIC price.

  • Q3 has however underperformed against Q2 as a result of MAGIC price being on a downward trend.

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  • Expenses totaled $2.731m for Q3 which was a 41% increase from Q2 (excluding Crypto gain/Loss).

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  • 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 Q3 were $12,6k. The cost has significantly reduced from Q2. The MAGIC emissions are seeded annually in a single transaction. This is consistent with the decrease seen since Q1 2024.

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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 18 displays the total holdings runway when taking into account stablecoins and MAGIC, which is 12 months at the end of June. You can find a more detailed insight into runway per the top two major assets of MAGIC & USDC within the report.

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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.