Summary
After significant due diligence and numerous conversations with venture funds and strategic partners, the Treasure DAO Council is pleased to announce a $3.5M token sale, conditional upon DAO approval. The token sale will be led by Digital Strategies Guild with participation from previous partners, 1kx, Neon DAO and ID Theory, and new participants, Arbitrum, Skycatcher Crypto, IOSG, Alchemy Ventures, IndiGG, StreamingFast, and other strategic partners.
TIP-16 is seeking approval from the DAO for two interrelated proposals:
- **Divest a total of 14,964,375 MAGIC tokens from the Ecofund for the $3.5M token sale. **This includes the remaining balance of the Year 2 Ecofund (4,944,774), 5,099,805 from the Year 3 Ecofund, 2,549,903 from the Year 4 Ecofund, and 2,369,893 from the Year 5 Ecofund. After several rounds of negotiations and pending approval by the DAO, the terms have been optimized to drive long-term alignment while balancing the uncertainties and volatility of current market conditions:
- Fully diluted valuation (FDV): $80M FDV anchored to 23c per token (30% discount to the spot price of MAGIC in late July when the initial term sheet was submitted). This was â and still is â a period of challenging economic conditions to raise in.
- Vesting schedule: 1-year cliff and 2-year vest with 100% of the tokens being unlocked by the end of the third year based upon the closing date of the transaction (same terms as the prior token sale in November 2021). The tokens will be locked in a vesting smart contract and cannot be used until they have vested.
- See A. and B. under âRationaleâ for further details.
- Use $1M of the divested tokens to obtain 500k gFLY tokens from BattleFly at $2 per token ($20M pre-money valuation) to strengthen the partnership with a core game cartridge building within the Treasure ecosystem (participation endorsed by partners). As part of the transaction, BattleFly will grant Treasure:
- 500k gFLY tokens to be staked into the BattleFly Dashboard to earn yield as a result of proceeds of the game, Flywheel, NFT sales (in MAGIC), and staking rewards.
- 1% of BattleFly Flywheelâs fees to the DAO as a public good.
- See C. under âRationaleâ and the gFLY Overview prepared by BattleFly for further details.
Rationale
A. Token Sale
Last fall, TIP-03 and TIP-06 were both ratified to arm Treasure with an infusion of funds to execute upon building the decentralized game console to connect games and communities through MAGIC, NFTs, and imagination. After launching just over a year ago (and migrating to Arbitrum last November), we have achieved a lot:
- become the dominant NFT/gaming ecosystem and marketplace on Arbitrum, writing over US$265M in volume;
- launched two sets of successful first-party IP (Bridgeworld and Smolverse);
- announced ex-AAA studio partnership with StriderDAO to launch a flagship game atop the Smolverse IP and stand up an internal game studio;
- launched Harvesters, the next major product release for Bridgeworld and pioneering social coordination between guilds;
- launched Trove as the personalized and gamified NFT marketplace to serve as the gateway for players to find their home within the Treasure ecosystem with Arbitrum and ETH L1 support.
- launched the MagicSwap AMM focused on modular trading, liquidity and token sink/faucet offerings for our gaming ecosystemâs tokens and NFTs; and
- cultivated a vibrant ecosystem of games (9 listed, a further 50 seeking integration) and passionate community members, reaching 100k+ people across our network.
With Treasureâs initial foundation set amidst a looming backdrop of an uncertain macro environment, the DAO Council initiated this token sale to:
- secure the proper balance between MAGIC and US dollar stable coin to solidify our treasury in the event the market continues to downturn and the bear is longer than anticipated;
- better position us to prove out our thesis of creating an interoperable ecosystem of games unified through a single token and shared infrastructure (eg. grow traction, find product-market fit);
- capitalize on the current opportunity to foster formal partnerships between reputable partners, prolific builders, and big thinkers not only in web3 gaming but more broadly within the entire crypto space; and
- leverage what we believe to be a multitude of catalysts and tailwinds to come arising from Arbitrum (with the launch of Nitro, upcoming Arbitrum Odyssey campaign), our expanding ecosystem of games, core product development, and other encouraging events.
B. Partners aligned for the long-term
Digital Strategies Guild will serve as the lead to anchor this token sale with participation from previous partners, 1kx, Neon DAO and ID Theory, and new participants, Skycatcher Crypto, IOSG, Alchemy Ventures, IndiGG, StreamingFast, and other strategic partners. We believe this is a strong group of long-term aligned partners and that this token sale is the best way to solidify the relationship to continue rapidly growing and scaling TreasureDAO in the years to come.
About Digital Strategies Guild Digital Strategies Guild is a gaming guild with the Digital Strategies group founded in 2014. They are not just seasoned investors, theyâre also true builders and gamers with a full-scale tech team and guild that dives in to play, build and collaborate.
Digital Strategies Guild has been instrumental in our ecosystem over the past 6 months and has dedicated more than half the time of their 15+ member team to building within the TreasureDAO ecosystem, along with significant capital.
Contributions to-date:
- Initial source to introduce The Beacon, the latest game studio building a roguelike dungeon crawler game on Treasure
- Generating leads for strategic partners, game studios, and potential investors
- Providing advice on areas of expertise (eg. market making) and sharing insights via research reports (eg. other ecosystems)
- Development of a to-be-released ecosystem game
- Producers of the Magic Hour Podcast
- Development of automation tools for MAGIC rewards
- Mobilized their guild to participate in and organize promotional campaigns for Bridgeworld and other games on Treasure
- See detailed list of contributions here
Value-Added Partners
- Network access: Access to investors, content creators, infrastructure providers, communities, and other strategic partners | Digital Strategies Guild, Skycatcher Crypto, 1kx
- NFT and gaming expertise: On-chain gaming, game design and economies, industry insight | Digital Strategies Guild, Skycatcher Crypto, 1kx, ID Theory, IndiGG
- Game studio and developer acquisition: Sourcing and referring game developers and game studios, advice and insight on game developer tooling and infrastructure | Digital Strategies Guild, Skycatcher Crypto, IOSG, ID Theory
- **Go-to-market, distribution and marketing: **regional distribution (China and India), strategic partnership with Indiaâs biggest gaming guild and SubDAO of Yield Guild Games (âYGGâ), eSports and content creation, player and consumer access, events | IOSG, IndiGG
- Scaling and technology: Vendor relationships to support the broader ecosystem with core infrastructure (Alchemy and The Graph), expertise relating to blockchain infrastructure and indexing | Alchemy Ventures, Streaming Fast
- **Decentralization: **DAO design, structuring and incentives, tokenomics | 1kx, ID Theory, Neon DAO
C. BattleFly Partnership
About BattleFly BattleFly is a PvP idle strategy game that will be the first ecosystem partner to build entirely on top of MAGIC. In Season 1 of the game which is expected to launch in October 2022, players will be able to assemble their BattleFly mechas from over 400 unique mods and send them into battle by staking MAGIC.
Value to the TreasureDAO Ecosystem The launch of their Season 1 game will serve as an early milestone proof point for how ecosystem games can build around MAGIC. Their planned MAGIC and Treasure sinks include:
- MAGIC will be used extensively throughout the game from staking, buying battle passes, purchasing mod packs and rewarding players. The team has put substantial development effort into building what we believe to be the most sophisticated combat engine in web3 gaming, developing a fun and innovative layer to competitive DeFi gaming.
- BattleFly will also feature Treasure sinks and one such use case includes enabling players to upgrade their BattleFly by burning a Treasure to enter the higher yielding Hyperdome arena.
In addition to their game, BattleFly has and will continue to be an active supporter of the Treasure ecosystem in a number of key ways:
- Supporting a broad range of other builders through Flywheel, their âStaking-as-a-Serviceâ infrastructure for game developers building on Treasure;
- Attracting VCs into the ecosystem;
- Running a dedicated event as part of the upcoming Arbitrum Odyssey event requiring participants to use MAGIC;
- Partnering with ecosystem players to introduce new characters into BattleFly Racer;
- Pioneering infrastructure use cases with fiat on-ramps into MAGIC and the Treasure ecosystem helping onboard new users into GameFi and web3; and
- A large $4.5M OTC purchase of MAGIC to underpin the DAO treasury and ongoing active participation within the ecosystem (ratified via TIP-10).
gFLY BattleFly will soon launch its governance token, gFLY, coinciding with the launch of their Season 1 game in October. Holders of gFLY will receive yield from proceeds of the game, Flywheel, NFT sales (in MAGIC), and staking rewards. For more information, see the gFLY Overview prepared by BattleFly.
Proposed Treasure Partnership As this launch promises to be a significant moment for our ecosystem, and BattleFly is investing considerable resources in building, marketing and innovating in the space, the DAO Council proposes to use $1M of the raised funds to:
- Obtain 500k gFLY tokens and stake these into the BattleFly Dashboard to earn yield.
- Unlock 1% of BattleFly Flywheelâs fees to be granted to TreasureDAO on a move forward basis as a public good.
Use of Funds The proceeds of the gFLY token sale will primarily be used by the BattleFly team to develop their Season 1 game and attract new players to the Treasure ecosystem.
Proposal
- **Divest a total of 14,964,375 MAGIC tokens from the Ecofund for the $3.5M token sale. **This includes the remaining balance of the Year 2 Ecofund (4,944,774), 5,099,805 from the Year 3 Ecofund, 2,549,903 from the Year 4 Ecofund, and 2,369,893 from the Year 5 Ecofund. The token sale will be led by Digital Strategies Guild with participation from previous partners, 1kx, Neon DAO and ID Theory, and new participants, Arbitrum, Skycatcher Crypto, IOSG, Alchemy Ventures, IndiGG, StreamingFast, and other strategic partners. Pending approval, the terms have been set at:
- **Fully diluted valuation: **$80M fully diluted valuation anchored to 23c per token.
- Vesting schedule: 1-year cliff and 2-year vest with 100% of the tokens being unlocked by the end of the third year based upon the closing date of the transaction. The tokens will be locked in a vesting smart contract and cannot be used until they have vested.
- Use $1M of the divested tokens to obtain 500k gFLY tokens from BattleFly at $2 per token ($20M pre-money valuation). As part of the transaction, BattleFly will grant Treasure:
- 500k gFLY tokens to be staked into the BattleFly Dashboard.
- 1% of BattleFly Flywheelâs fees to the DAO on a move forward basis.
Polling Period
The polling process begins now and will end on September 18, 2022 at 2:00pm UTC. If quorum is reached, a Snapshot vote will be put up shortly thereafter.