Quick Takeaways
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Restructuring Announcement: Treasure DAO is shutting down its game publishing operations and Layer-2 network, Treasure Chain, due to severe financial issues, driving its native token MAGIC down 18% in 24 hours.
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Financial Mismanagement: The organization faces a critical gap with $8 million in annual expenses against only $2.4 million in treasury, stemming from high labor costs, infrastructure expenses, and unfavorable grant payments in MAGIC.
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Focus Shift: The DAO plans to concentrate on four core products: the NFT marketplace, Bridgeworld, Smolworld, and AI agent scaling, while aiming to recover $785,000 from market maker Flowdesk.
- Community Backlash: The announcement triggered outrage and skepticism from the community regarding transparency and leadership, further fueled by a significant decline in MAGIC’s market performance, plummeting nearly 99% from its all-time high.
Treasure DAO Shutdown Sends MAGIC Token Down 18%
Blockchain gaming ecosystem Treasure DAO has shut down its game publishing operations and Layer-2 network, Treasure Chain. This decision follows a significant financial crisis. Consequently, the DAO’s native token, MAGIC, plunged 18% in just 24 hours, exacerbating an ongoing downward trend.
How Treasure DAO Got Here
Initially, Treasure DAO attracted attention as a decentralized gaming hub. It utilized the MAGIC token to finance game development and collaborations. However, financial mismanagement now poses a major challenge. Specifically, the organization’s chief contributor, John Patten, disclosed that annual expenses exceeded $8 million. Meanwhile, the treasury holds only $2.4 million in stablecoins.
Several factors contributed to the financial woes. Labor costs reached $6.1 million annually, while infrastructure expenses totaled $800,000. Additionally, the DAO granted funds in U.S. dollars but paid them in MAGIC, a strategy that became untenable as the token’s value declined.
To address these issues, the DAO proposed shutting down the costly Treasure Chain. This change should alleviate some financial pressure. Patten noted that without these drastic measures, the treasury would likely run out of funds by mid-2025. The project plans to concentrate on four core products, including an NFT marketplace, Bridgeworld, Smolworld, and AI agent scaling.
Community and Market Reaction
The announcement generated mixed reactions on social media. Many community members expressed their frustration with the DAO’s leadership. One user on Discord voiced their disappointment, stating, “Just a few weeks ago, it was all hype and optimism, and now this?” Another user, Intrepidus.eth, shared broader concerns, saying, “Most of those guys don’t know how to run a bloody company… really tired of crypto and the hype.”
Speculation arose that the Treasure team may have sold off MAGIC tokens before the announcement, further shaking community trust. The token’s performance reflects this turbulence, with an 18.3% drop in just 24 hours. Currently priced at $0.08316, MAGIC stands nearly 99% below its all-time high of $6.32, set in February 2022.
Over longer periods, the downturn is even more striking, with a 41.6% decline in the past week and a 53.7% drop over the last month. Furthermore, MAGIC has decreased by 91.4% over the past year, illustrating a significant loss of confidence in the project.
As the gaming landscape evolves, the situation surrounding Treasure DAO underscores the necessity for sustainable business practices within crypto projects. It serves as a reminder that excitement can quickly turn into disillusionment if financial foundations are not securely built.
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