Crypto Unicorns Treasury Report 2024 Q1
Read more about the Q1 2024 Treasury Report in this article.
Following the format we introduced in the previous quarter, we will once more use the same format to improve the understandability of this report.
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.
*Note: While this reflects the treasury valuation on March 31, 2024, this has since changed due the changes in token prices. Any difference in actual treasury holding from the end of Q1 to the present accounts for both the token price changes and the Q2 expenditures combined.
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.
Disbursements (↓): In the CU project, disbursements 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.
LP/Yield Positions (↑): These primarily consist of staked tokens aimed at generating a regular token yield. Examples include staking ETH for stETH to earn token rewards or staking w/stETH or 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.
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 $9,035,376 and concluded with $10,233,759 . Similar to the previous quarter, we saw limited income from yield positions and NFT sales. Pending XAI grant disbursement, we have deployed an additional collateral positions on AAVE to augment the treasury stables to support regular operation. Notably, there has been an increase in the overall valuation of our assets, primarily as a result of the rising token prices across the board during the first quarter of 2024.
II. Disbursements
A. Business Development
Our business development efforts focus on marketing and market-making to enhance project visibility and facilitate easier onboarding.
Marketing: This quarter, $159,829 was spent on marketing, considering the month-end ETH price. This includes KOL campaigns, partnerships, merch, and NFT purchases for airdrops.
fig. 1 - A Summary of Marketing Operations Expenses
fig. 2 - A Summary of Bundle Disbursements for Marketing
Market Making: RBW demand and trades on CEX requires that we regularly top-up our CEX market-making account, ensuring that there is liquidity for all prospective traders. This process ensures good trading conditions on CEXs and increased liquidity on our DEX.
It is important to note, however, that funds allocated for market-making should not be classified as expenses in the long term. This is because these tokens, while present in the exchange, undergo a process of rebalancing between the tokens in the pair.
B. Core Game Operations
Game Bank Maintenance: Regular replenishment of the game bank ensures smooth in-game operations. RBW is sourced from the P&E allocation. This cycle, we did not do any top up on UNIM. For this reason, no UNIM was minted within the quarter.
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
Treasury Diversification: Our ongoing experimentation with diversification strategies aims to fund operations, marketing, and market making without spending our precious ETH. Last quarter, we have staked ETH on FRAX and we continue to borrow crvUSD via Curve’s CRV AMO protocol. In addition, we have also staked some 350 ETH on Aave. This has allowed us to borrow additional stables against the position.
Pending XAI grant distribution, we continually believe in preserving our ETH. We believe the best strategy is to earn yield on the staked ETH and take out stables from this collateral, and continue to benefit from ETH’s potential price appreciation. This allows us to fund the treasury in the short term while also leveraging the long-term benefit from the potential ETH price appreciation.
C. Grants
Development Grants: The CU community's growth has seen increased contributions from community developers, funded by ecosystem grants.
As of March 31, 2024, ongoing grants include UnicornParty.com, UniWU.me, Unicorn Fight Club, and Unicorn Gladiators.
Note that as our Ecosystem Fund grant is denominated in RBW, we transfer an equivalent amount of RBW from the Ecosystem
Fund allocation into the Treasury in return for the USDT/C and ETH being disbursed. So far, we have only processed the RBW equivalent for the ETH transfers and will be processing the USDT/C equivalents in the following the second quarter.
Ecosystem Fund Grants: These support contributors and creators beyond game development.
As of March 31, 2024, ongoing grant is the Community Support and Creator Program.
III. Revenues
We're exploring various revenue-generating operations within CU.
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 Q1 of 2024. Not much has changed from the previous quarter.
We have earned a total of $ 205,161 from our positions, with $82,039 from our stETH position and $123,122 from our RBWLP position.
In-Game Transactions: A % fee from in-game operations contributes to the treasury. We have made the first ever transfer in the Q4 of 2023. As mentioned in the previous report, all the fees made to the treasury will be withdrawn at a more regular cadence. This quarter, 19M RBW was moved from the P&E allocation to account for accrued fees.
NFT Sales: Primary sales from the Land Vending Machine have drastically declined in the last three quarters and remain so. On the other hand, secondary sales fees from platforms like Opensea continue to contribute small amounts of ETH into the treasury.
As we conclude this quarter's treasury report, we reinforce our commitment to transparency. We intend deploy strategies that augment the treasury to continually support the development of our shared economy.