Introduction: The Treasure Ecosystem

If you’ve been paying attention to the Play-to-Earn space these past couple of months, chances are you’ve heard of TreasureDAO & the parabolic rise in the price of its native token, $MAGIC. The DAO has quickly become one of the largest players on Arbitrum and has launched several successful projects, including native NFT collections and their very own marketplace. In fact, Treasure has been such a big success thus far that it is largely responsible for the increased popularity of Arbitrum.


Executive Summary

TreasureDAO is a GameFi ecosystem on Arbitrum (a Layer 2 Ethereum scaling solution.) It was initially born out of the midst of the massive hype behind Loot back in September 2021. Since then, Treasure has grown far beyond its initial scope into an innovative new ecosystem of various projects. $MAGIC, the native token, is the link that ties everything together inside of the ecosystem. Its purpose is to essentially “power on” the entire Treasure ecosystem, turning the NFTs inside of it into productive yield-bearing assets that gamify and incentivize users to hold onto their tokens by leaving them staked.

With a hefty war chest and an impressive team at their disposal, the Treasure team has set out to become “the Nintendo of the Metaverse”, allowing new or existing projects to plug straight into their ecosystem and instantly reap the benefits of their superior technology; a solid and stable currency, a marketplace, and cross-game composability.

For a deeper dive into TreasureDAO’s mechanics, check out the excellent threads below. ↓


TreasureDAO ($MAGIC): Outlook & Analysis

Relative Performance: Compared to other noteworthy NFT marketplaces’ volumes in February, Treasure is doing exceptionally well as its volume exceeded that of Rarible, SuperRare, and Foundation combined, while only 50% behind LooksRare. Additionally, Treasure’s marketplace volume was about 13% of Ronin’s (Axie Infinity’s native marketplace), which is extremely impressive considering the lifespan of both projects.

Extrapolated out a year, assuming constant volume with no growth and average prices, this would be ~$1B worth of volume for the Treasure marketplace. Notably, transaction volumes have also been consistently high as the baseline has been at least 500K $MAGIC for the majority of days. As of 03/14/22, the marketplace has collected ~$9.2M in transaction fees.

The expected volume of the Treasure marketplace also has the chance to go much higher if there is a constant pipeline of successful projects added to the ecosystem. This would not only generate increased demand for $MAGIC but also support its price meanwhile increasing the amount of marketplace revenues going straight to the treasury. However, on the flip side, if the upcoming releases of new games don’t live up to the expectations, volumes and revenues are most likely to drop.


Quick $MAGIC Overview

$MAGIC currently has a ~$133M circulating market capitalization, showing strong conviction from the community with 70.2% of that supply currently staked in the Atlas Mine (53% of that being locked for 12 months.) Price-wise, in the past 30 days, we’ve seen $MAGIC trade between the $2.48 & $6.32 range due to macro conditions and a recent marketplace exploit. At the time of writing, $MAGIC currently sits at $2.52, -60.13% from a 30-day local high (& ATH) at the time of writing.


Adoption Rate & Sustained Relevance

The Treasure platform has had impressive growth in all aspects of adoptive statistics so far. The platform has seen a total of 140,000+ new unique user visits (+27% MoM) and 4,500,000 new page views (+18% MoM) in the past 30 days alone. The number of unique wallets holding $MAGIC has also increased from 17,556 to 39,172 (+123% MoM) with a consistent influx of new active users.

Since January, $MAGIC also saw explosive growth in tweet dominance of key opinion leaders within Crypto & NFTs as major influencers such as Gary & AJ Vee bought into Smolbrains. Even during current market conditions, TreasureDAO has maintained impressive organic growth momentum, gaining ~17,200 new followers on Twitter in the last 30 days, with consistently growing engagement rates.

Given that the Treasure ecosystem’s success relies upon increased adoption, I believe these indications offer a positive outlook for future success as more and more new members are being drawn into the Treasure ecosystem at a fast pace.


Team

TreasureDAO’s team boasts impressive track records across various sectors:

The success of the marketplace and the astuteness of the team’s strategy has also drawn in influential outside investors in an initial $3M investment round led by 1kx, bringing in advice and support from pioneers such as Dom from Loot, Tony from The n project, and even Axie Infinity’s Co-Founder Jiho. Not only this, but Treasure has also announced partnerships with projects and metaverses such as Olympus DAO, Smolverse, Life, Ether Orc, and more.

Perhaps more importantly than anything else, so far, the team has stayed true to their word, staying heads-down building, delivering at breakneck speed, and always putting the community before themselves. They’ve shown through consistency that they’re able to execute on their promises while espousing core principles of fair distribution and community building.


A Collective Sign Of Conviction

An isolated event that showcased strength was the aftermath of an exploit on March 2nd. On this date, a hacker exploited the Treasure marketplace, resulting in 154 listed NFTs being stolen. This caused the price of $MAGIC to sharply pull back down to ~$2.25 (-40.8%.)

However, the team met the exploit with a response time of less than an hour, and the community quickly rallied as 150 of the 154 stolen NFTs were returned to the original owners through collective effort. In addition, members of the Treasure Council replaced the remaining four within less than 24 hours, and as a result of these joint efforts, the price of $MAGIC quickly bounced back to $3.26 (+46%) within 45 minutes of the incident.

This in itself shows a strong indication that the active DAO, currently at ~29,000 Discord members, is capable of withstanding the everchanging dynamics associated with early token adoption.


Risks & Mitigants

As with any blockchain platform, there are standard risks of smart-contract and secular/market risks. However, the most pressing risk for TreasureDAO is the adoption of the Arbitrum network. Will it be good enough, fast enough, and cheap enough? Will the game(s) be accessible enough for the lower-income audience to bridge over? And will the magic behind TreasureDAO fade if a AAA title presents itself on the L1 Mainnet?

From a growth perspective, the issue with building on top of Arbitrum is that it’s intrinsically worse for potential adoption as it adds an extra barrier of entry for newcomers. This doesn’t mean that there isn’t value in building on other chains, but it means there needs to be an increased amount of sustained relevance and demand to attract and keep users engaged.

These degrees of isolation risk are already being mitigated as Treasure has announced Trove, a generic marketplace denominated in ETH, that is set to launch sometime in Q2. Trove will not only help steer Arbitrum into L2 adoption with its 10x faster and cheaper transactions, but it will also raise staking incentives of $MAGIC through its royalty-sharing program. Once Trove launches, staking $MAGIC will not only give you exposure to the ecosystem, but it will also give a share of the revenue in ETH from Trove and 33% of fees from all in-game actions in Bridgeworld.

Treasure has also partnered with Mural, enabling active cross-chain expansion by allowing users to bridge NFTs to Arbitrum and use them in the Treasure ecosystem. This provides more utility and also increases the value of the NFTs as users can interact and trade with little cost on Arbitrum, even if their NFTs were originally minted on ETH. So, for example, a user would be able to bridge their NFT collection from Ethereum Mainnet to Arbitrum in order to utilize their collection within the TreasureDAO metaverse or to trade on Trove.


Future Qualitative & Quantitative Indicators

To further quantify the degree of TreasureDAO’s ability to mitigate risk and overcome its present challenges, we can keep an eye on the following metrics:

  • Marketplace volumes
  • Adoption rates and active wallets
  • Floor prices of main NFT collections
  • Community growth, e.g. number of Twitter followers and Discord members
  • Rate and quality of new projects being integrated with the Treasure ecosystem

Conclusion

Being first is a tough, albeit greatly admired, position to be in. Meanwhile, Treasure might have scaled horizontally and vertically in its first six months more than anyone thought possible, but it’s still clear there is a more complex in-game economy developing here. Since it’s still in its early stages, the lack of longer-term historical data makes it difficult to predict how the economy will develop in the near future. However, for the moment, the team seems to have mastered the magic touch - enhanced by what appears to be a genuine desire to build something that benefits the community as a whole.

All in all, TreasureDAO is an ecosystem that has shown no reason not to continue to grow and further cement itself as one of the most prominent ecosystems in the space. With plenty of exciting projects such as Trove on the horizon and the number of active wallets actively increasing even during scarce macro conditions, it’s hard to argue that this isn’t a great opportunity for new entrants to start accumulating $MAGIC at a discounted rate.

From here, the duty rests upon the team to deliver on their future promises in the same way they have thus far, executing a game that is fun, engaging, and rewarding, and continued efforts to unite with more and more Metaverse projects to deliver on their vision of making $MAGIC the reserve currency of the entire Metaverse.


Acknowledgments

I would like to acknowledge @Anonn_eth, @BowTiedFeline, @_Crypto_Culture, Deathstrike#4507, and @bjornsamuel for data, discussions, and valuable feedback on this research.

Share this post