Crypto Unicorns Treasury Report 2023 Q2
Originally released on 18 July 2023 on Governance News channel on Crypto Unicorns Discord server
The quarter began with a balance of $17,980,126 on April 1, 2023, and concluded on June 30, 2023, with a balance of $14,411,560.
Our yield position generated $3915 in revenue based on claim value. Furthermore, we continue to profit from both primary and secondary NFT sales, with the latter generating 10.26 ETH ($19,046) and the former generating 104.94 ETH ($194,591.61).
Let's get into the specifics of our Q2 activities!
✨ Highlights
2,400,000 USDC was withdrawn from the ETH Treasury to cover Q2 Operational Expenses.
1,167,500 USDC was used to purchase 423,028,111 UNIM, adding to the protocol-owned UNIM liquidity and replenishing the game bank.
17,138 USDC and 9,437,746 UNIM were deposited into the Uniswap UNIM liquidity.
430,500,000 UNIM was transferred to the Game Bank.
120,000 UNIM was distributed as compensation for Customer Service-related tickets.
50,000 USDC was distributed to the Jousting Pre-season Tournament winners.
11,785 USDC and 7,344 USDT were allocated for marketing advertisements.
28,000 USDC was paid to Saturn Media for marketing consultation.
80,000 USDC and 2,814,536 RBW were paid to Bitget for the listing of the RBW/USDT pair.
2,000 USDC was paid to BTSE for the listing of the RBW/USDT pair.
10,500 USDC was paid to Flowdesk for market-making operations for RBW across various CEX and DEX.
247,669 USDC was used to purchase 146 ETH. Subsequently, 146 ETH was used to acquire 2,002 Unicorns and 2,567 Lands for the Corn Drop campaigns.
1,619 LDO, 584 bb-a-USD, and 16 CRV were harvested from the yield positions.
115 ETH ($213,638) was earned from NFT sales, with 10.26 ETH coming from secondary sales and 104.94 ETH from LVM sales.
Let’s now take a look at our holdings when the quarter ended.
📊 Summary of Holdings
As of June 30, 2023
After reviewing our holdings at the end of the quarter, let's have a look at our holdings at the start of the quarter. We will work from here through the end of all operations in the second quarter of 2023.
As of March 31, 2023
⚙️ Operations Spending
To continually build the Crypto Unicorns IP, Laguna Games makes a quarterly withdrawal from the treasury. These withdrawals take place at the end of each quarter. (For example, the budget withdrawal for Q2 Operation Expenses happens by the end of June or early July.)
1) Q2 Operations Expense Exchange for Fiat
We drew $2,400,000 USDC from the Ethereum Treasury for the Q2 Operations Expense.
When discussing the Q2 operations expense, it seems prudent to mention that we have recently enlisted the help of an NFT market maker called Gekko. This group is paid from the operations expense so transaction related to Gekko do not have blockchain transaction equivalents. Given the recent incident on the NFT market relating to the market maker, we’ve been closely monitoring their strategy and will not allow a repeat of the same incident.
2) Building Protocol-owned Liquidity
Starting in August 2022, we started building the protocol-owned liquidity for UNIM. Rather than minting UNIM out of thin air, UNIM was purchased from the existing supply, a process that extended through the end of 2023 Q2.
In Q2, to make the process of making these purchases easier, we have also enlisted the services of the company Peanut in making these purchases.
During Q2, we also also exited and re-entered our position in the pool.
It's worth noting that Q2 marks the end of purchasing UNIM for liquidity purposes. We have initially started this initiative with the objective of providing liquidity and stabilizing UNIM, intending to conclude the operation by Q2 of 2023. Moving forward, any UNIM required for liquidity or to fill the game bank will be minted.
3) Uniswap UNIM LP
To sustain the liquidity of UNIM, we also supplied liquidity to the Uniswap UNIM Pool.
4) Game Bank Maintenance
The game bank is periodically refreshed to ensure smooth gaming operations. Because the Game Bank allocation is kept to a bare minimum - just enough to sustain live operations - we need to refill the Game Bank whenever UNIM and RBW fall below the threshold.
5) Customer Support Compensation
This refers to the recompense given to participants who encountered special issues during gameplay.
6) Jousting Pre-season Tournament Reward
To commemorate the release of Jousting, Crypto Unicorns hosted a Jousting Preseason event where a prize of 50,000 USDC was divided among Champion and Tournament winners. With the closing of the tournament, all rewards have been successfully distributed.
7) Gas Fee Maintenance
We regularly replenish the gas fees for many of the wallets integral to the game's operation, most importantly the game server support functions that assist in clearing faulty transactions related to breeding, evolution, and hatching.
This includes not only gas fees but also conversion "fees". These are the amounts deducted during transactions such as bridging, swapping, wrapping, etc.
8) QA Testing Expenses
To ensure that operations run smoothly in the live environment, certain tests must be run on the live server. As these blockchain transactions require tokens to function, USDC tokens that can be converted to ETH and other tokens have been transferred to the QA testing wallet.
📽️ Marketing Spending
2023 has brought about numerous shifts to our marketing strategies. We have experimented with a variety of approaches, embracing those that have proven effective.
Most of the expenses associated with marketing are paid in USDC or USDT.
1) USDC to USDT Conversion
2) UA Campaigns and Marketing Consultant
We explored user-acquisition campaigns through online advertising and banners across multiple platforms in Q2. These platforms include Facebook, TikTok, Adshares, DappRadar, Coinzilla, Chainplay, among others.
3) RBW/USDT Listing
As part of our strategy, we've extended the reach and volume of RBW, the primary value token of Crypto Unicorns. We've taken a tiered approach, initially, listing on smaller exchanges before progressing to higher-tier exchanges to gradually gain more volume. With this in mind, we've made RBW available on BTSE and Bitget, with Bitget being one of the top ten exchanges, marking a significant step toward our aim of listing on larger exchanges.
This process of listing on exchanges is linked to market-making. We've begun testing with FlowDesk as market-makers for RBW, with the goal of managing liquidity on the Centralized Exchanges (CEX) and Decentralized Exchanges (DEX) where RBW is listed.
However, Q3 saw a short-term dip in RBW's price, lasting 3-5 days at the beginning of July. Even though this technically falls outside of Q2, it is critical to provide clarity on this matter. A portion of the RBW paid to Bitget was designated for co-marketing, resulting in significant selling pressure on Bitget, which the market-maker had to buy into. The excess RBW was then hedged on Balancer with the goal of balancing liquidity across exchanges. While the choice was made in good faith, it eventually resulted in the RBW price reaching an all-time low (ATL). Learning from this experience, we intend to be more involved in the process and are investigating different market-makers to identify the best partner to assist us in achieving our objectives.
4) Corn Drop Marketing
Since its inception in the third quarter of 2022, the Corn Drop marketing approach has significantly evolved. Bundles are now won from a variety of marketing campaigns. Additionally, we've been forming partnerships with other web3 projects and guilds to identify high Lifetime Value (LTV) users. This has resulted in a significant increase in conversion rates, but we aim to further refine the process to maximize the output of these campaigns.
💰 Earnings
Having discussed our investing and spending activities, let's delve into the treasury inflows.
Our yield positions in Q2 of 2023 have changed slightly. As previously remarked, we have provided UNIM liquidity on Uniswap, resulting in our Uniswap UNIM LP position. Our stETH and UNIM LP positions have also seen minor adjustments as a result of exiting the position and reentering the pool. Our veBAL and RBWLP positions, however, remain unchanged.
Currently, we are capable of harvesting BAL, LDO, CRV, and bb-a-USD from our positions. Previously, we reported that we have redirected the gauge weight from RBWLP to the bb-a-USD boosted Pool to earn rewards. This is where our bb-a-USD come from.
2) NFT Sales
Secondary and primary NFT sales continue to generate ETH inflows. Q2 saw an increase in ETH inflows from secondary NFT sales and LVM sales, with the latter seeing a 45% increase in ETH sales compared to Q1.
📗 Ecosystem Fund
Ecosystem Fund Grant recipients receive grant payments on a monthly basis. These grants are based on approved governance proposals for the ecosystem fund. Here are the active grant proposals:
Knowledge Base, Price Bots, and Tools (started January 2023)
The table below shows how much RBW were disbursed in Q2 of 2023
The grant period for Ecosystem Fund Grant Round 1 ended in the Q2 and will not be renewed. Unless renewed, the Bug Bounty Program and the Mod Program will also expire in the Q2. Conversely, the Knowledge Base, Price Bots, and Tools proposal was renewed on July 11, 2023, and will continue to be implemented through Q3 and Q4.
We are committed to releasing treasury reports at the end of every quarter to maintain transparency and provide necessary additions when needed. As for the upcoming quarter, expect a greater emphasis on marketing and scaling RBW. UNIM will no longer be purchased from the market moving forward. Rather, any UNIM required for game operations will be minted.
This concludes the operations of Q2. Despite the flurry of activity and releases in Q2, we anticipate that Q3 and Q4 to be equally exciting. Notably, we're excited for Delegation, Rainbow Rumble, and Team RPG. Shadowcorn owners should also keep a watch out for updates as we begin releasing Shadowcorn based game loops to bridge the Unicorn and Shadowcorn factions together in a never-ending conflict.