Crypto Unicorns Treasury Report 2023 Q4

Originally released on 08 Feb 2024 on Governance News channel on Crypto Unicorns Discord server

This quarter, we are introducing a different format for our report. Depending on feedback, we may revert to the original format if desired by the DAO.

Before we delve into the details, let's review the treasury balances at the start of the quarter.

Let's review the treasury balances at the end of the quarter as well.

Understanding this report requires familiarity with the factors influencing treasury flows within our project. These are categorized into three areas: expenses, LP/yield positions, and NFT sales.

1. Expenses (↓): In the CU project, expenses encompass operational costs, marketing, market-making, and payments for goods and services from partners. These transactions invariably result in a decrease in our treasury balance.

2. LP/Yield Positions (↑): These primarily consist of staked tokens aimed at generating a regular token yield. Examples include stETH, where tokens earn ETH by participating in network security, and sfrxETH, where tokens are staked with the option to borrow an equivalent value in stablecoins, subject to repayment to prevent liquidation. These transactions typically increase our treasury balance.

3. NFT Sales (↑): Income is generated through secondary sale fees on platforms like Opensea and direct primary sales via the Land Vending Machine.

I. Summary

We commenced the quarter with a total asset value of $10,636,856 and concluded with $9,035,376. Despite our quarterly operational draw of $2,250,000, the decrease in total asset value was relatively modest. This quarter saw limited income from yield positions and NFT sales. However, as detailed in the asset table, a decrease in USDC values was offset by appreciation in UNIM and RBW LP pool values, coupled with an increase in total stETH value due to rising ETH prices towards Q4's end.

II. Business Development Updates

Our business development efforts focus on marketing and market-making to enhance project visibility and facilitate easier onboarding.

1. Marketing: This quarter, $118,991 was spent on marketing, considering the month-end ETH price. This includes KOL campaigns, partnerships, tie-ups, and NFT purchases for airdrops.

fig. 1 - A Summary of Marketing Operations Expenses

fig. 2 - A Summary of Bundle Disbursements for Marketing

2. Market Making: The growing interest in RBW necessitated continual transfers to our CEX market-making account, ensuring liquidity for new RBW holders. This has fostered better trading conditions on CEXs and increased liquidity and market cap on our DEX.

It is important to note, however, that funds allocated for market-making would not be classified as expenses in the long term. This is because these tokens, while locked within the exchanges, only undergo a process of rebalancing between the tokens in the pair depending on trading conditions.

III. Core Game Operations Updates

1. Game Bank Maintenance: Regular replenishment of the game bank ensures smooth in-game operations. RBW is sourced from the P&E allocation, while UNIM is minted, initially utilizing excess from the previous PoL strategy before minting additional tokens.

2. Operations Cost: The quarterly draw of $2,250,000 supports core and second-party game development. This section also includes the gas/bridging fees, and other auxiliary operations. A chart showing how the Q4 Operations draw is allocation has also been made available below.

   

   fig. 3 - A Summary of Operations-related Expenses

fig. 4 - Operations Draw Allocation

3. Treasury Diversification: Our ongoing experimentation with diversification strategies aims to fund operations, marketing, and market making without spending our precious ETH. This quarter, we have staked some of our ETH on FRAX. Combining this with Curve’s CRV AMO, we were able to borrow crvUSD based on the value of our sfrxETH. We believe that instead of directly selling our ETH to fund CU’s operation at the current price, it’s better to earn yield on the staked ETH and continue to benefit from it’s price appreciation. This is expected to allow us to fund the treasury in the short term while also allowing us long-term benefit from the potential ETH price appreciation.

   

   IV. Grants Updates

1. Development Grants: The CU community's growth has seen increased contributions from community developers, funded by ecosystem grants.

• As of December 31, 2023, ongoing grants include UnicornParty.com and UniWU.me.

2. Ecosystem Fund Grants: These support contributors and creators beyond game development

• As of December 31, 2024, ongoing grants are the Bug Bounty Program and the Community Support and Educator Program.

  

V. Revenue Updates

We're exploring various revenue-generating operations within CU.

1. Yield Positions: Assets staked or added to LP pools, like RBWLP and UNIMLP, are part of our DAO’s position. The image below shows our current positions and our yields for Q4. We have earned a total of ~$ 106,225 from our positions, with 24.67 sTETH ($ 56,181) from our stETH position and $ 50,044 from our RBWLP position.

2. In-Game Transactions: A % fee from in-game operations contributes to the treasury. This quarter, 10M RBW was moved from the P&E allocation to account for accrued fees. At the moment, all the fees owed to the treasury since we first operated in 2022 has not yet been withdrawn, and we should expect the treasury to receive the remaining sum in the following months as we work to settle the accounts.

3. NFT Sales: Primary sales from the Land Vending Machine have declined in the last two quarters, but secondary sales fees from platforms like Opensea continue to contribute.

   

   The insights gained from our expenses, investment positions, and NFT sales provide us with valuable guidance for future decision-making. As we conclude this quarter's treasury report, we reinforce our commitment to transparency and strategic growth as we continue to navigate the evolving landscape of digital assets.