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r3gen Finance is pleased to present the 2023 Q4 financial review for Treasure. The report takes a deep dive into the financials and performance over the last 12 months with a focus on revenue and expenditure in Q4 vs Q3, we also show annual numbers and charts where appropriate for context building. Some key insights have been pulled out onto this forum post however we advise everyone reading this to review the full report (link above). Within this document we provide a Profit or Loss Account, Balance Sheet and Runway Analysis coupled with supporting notes.
The purpose of the report is to provide the TreasureDAO community with greater visibility into the current state of DAO operations and financials as well as 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 of 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
Q4 Business Development update
There has been lots of activity in the Treasure ecosystem in Q4 to round off 2023, from new hires to many new game developments and features. The key theme this quarter is building a winning team with new hires and starting the discussion of what’s to come next for Treasure and web3 gaming as the market strengthens heading into 2024.
Games and Partnerships Kaiju Cards released a new map with new event rooms and souvenirs for a week in October as well as commencing Pioneer Equipment trading. Later in November Kaiju Cards’ Fungi Festival also began, introducing a new class - Farmers. Aliya’s Ascent was also released this quarter, launching another new game to Treasure’s already impressive library. Arbitrum Odyssey saw its long anticipated return and held a Treasure Week during November, coinciding with the launch of Treasure’s Quests system to allow its users to complete quests and win an assortment of prizes, such as $MAGIC. Knights of ETH and Kuroro Beasts also had developments in Q4, with initiations and token airdrops. DeFi Kingdoms joined the Treasure community in December making it a cross-chain collaboration, specifically with Tales of Elleria. Mighty Action Heroes also went live worldwide on Google Play in October, for free, which later won the 2023 Best Mobile Game Award. And Lastly, The Beacon’s yearly Trilight Festival returned rounding off an exceptional year of game building.
Treasure’s Growing Team The Treasure team has grown in Q4 with some new hires across the board. In October, Treasure welcomed Gina Stoke as Head of Art who will be driving the art direction and visual language of Treasure and the Bridgeworld universe, as well as Jen Stubber who joined the marketing team as Treasure’s latest Community Manager. In November, Yuri Visser joined the core team as CTO to level up Treasure, and Treasure’s partnered studios’ ecosystems, focusing on publishing, game development and infrastructure. Treasure’s final hire of 2023 was Peter Di Cicco in December, joining the core team as Narrative Director. Peter will develop the narrative foundation for all of Treasure and the Bridgeworld universe of games to build atop of.
New Features and Updates The Treasure platform released its new shopping cart and sweep feature at the beginning of Q4 along with a refreshed homepage and new badge options. A wishlist feature was added to Treasure in November allowing users to “heart” items across multiple devices and move items into cart. Lastly, badge immortalisation came into effect in December allowing users to earn bonus gems and redeem prizes.
Governance Treasure Arbitrum Representative Council (ARC) formed with an initial eight member council at the beginning of Q4 to allow Treasure’s core team to remain focused on building and growing Treasure while maintaining its important role as the lead delegate within Arbitrum DAO. ARB was also allocated to the ARC Multisig (TIP-32). The proposal for airdropping L1 Treasures to Arbitrum One (TIP-31) was taken well among the community.
In December, the DAO proposed in TIP-33(b) to transfer 511k gFLY obtained via TIP-16 and is currently vesting to BattleFly DAO in exchange for 7x Rare Genesis Legions and 2x Special Genesis Legions in order to close out a lengthy discussion with the BattleFly team.
There has also been updates to the MAGIC LP incentive program which aims to reduce emissions from 140k per month to 30k per month with a target end date being 31st March.
Q4 also marked the release of a community launched token - Smolcoin ($SMOL) which gained traction at the end of Q4. Treasure approved a proposal to add this to Magicswap.
Q4 overall has been significant in laying the building blocks for a successful 2024 with a growing team and a positive outlook on web3 gaming.
Key Financial Highlights
Treasury
- Current Treasury holdings total $66.6M which is largely composed of MAGIC, ARB and stablecoin Holdings
- Stablecoins make up 13.4% of the total (impaired) treasury holdings.
Throughout Q4, Treasure has diversified revenue received into stablecoins to firm up the runway. Diversification efforts have enabled the organisation to generate a strong foundation to build through the next bull market and thrive, irrespective of crypto market conditions.
MAGIC Update
- MAGIC token price has seen an increase since the end of last quarter. A result of general increased market optimism.
- There has also been updates to the MAGIC LP incentive program which aims to reduce emissions from 140k per month to 30k per month with a target end date being 31st March.
Revenue
- Total revenue generated in Q4 is $132,748. Broken down into Marketplace fees of $78,891, In-game revenue of $24,735 and the new Magicswap revenue stream generated $29,122.
- Revenue is primarily generated in MAGIC, so both volume and price impact monthly revenue figures. Q3 performed better than Q4 in both USD terms and volume of MAGIC received
Expenses
- Expenses totaled $2.64m for Q4 down 15.1% from Q3 (excluding Liquidity and Mining Expenses)
- The top expenditure item is in relation to the Management Service Charge and Human Capital Costs. TreasureDAO has a number of relationships at an arm’s-length basis 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 have also been a number of strong additions to the team
- Jen Stubber - Community Manager
- Gina Snoke - Head of Art
- Yuri Visser - CTO
- Peter Di Cicco - Narrative Director
- Total Liquidity and Mining Emissions for Q4 was $377,325. The cost has significantly reduced from Q3 as the prior period had the annual Halvening on September 1. The MAGIC emissions are seeded annually in a single transaction. No such event occurred in Q4.
- Liquidity incentives have increased by 13% from Q3 emissions throughout Q4 they were set at 140,000 MAGIC and the increase in incentive charges was a result of MAGIC price appreciation. The LP incentives have reduced 30k per month with a target end date for incentives being 31st March.
Runway
In the context of this analysis, the total assets encompass stablecoin holdings and the 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 Fig 15 displays the total holdings runway when taking into account stablecoins and MAGIC, which at the end of December is 18 months.
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 December would be 28 months.
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.