Treasure DAO, a blockchain gaming ecosystem, has announced a major restructuring by closing its game publishing operations and the Layer-2 network, Treasure Chain, due to significant financial challenges. This announcement led to a sharp 18% drop in its native token, Treasure (MAGIC), within 24 hours, exacerbating a prolonged downtrend.
**How Treasure DAO Reached This Point**
Initially, Treasure DAO gained momentum as a decentralized gaming center, utilizing its MAGIC token to support game development and partnerships. However, financial mismanagement and unsustainable costs have severely impacted the project. In a video shared on X, John Patten, the DAO’s chief contributor, disclosed that the organization’s annual expenses have exceeded $8 million, while only $2.4 million in stablecoins remain in its treasury. Contributors faced high labor costs amounting to $6.1 million annually, alongside infrastructure expenses of $800,000. Additionally, the project issued grants in U.S. dollars but paid them in MAGIC, which became increasingly burdensome as the token’s value declined.
To address the financial issues, the DAO proposed shutting down Treasure Chain, which accounts for most infrastructure expenses and is too costly to maintain. They also aim to recover $785,000 in idle funds from market maker Flowdesk to extend the treasury’s lifespan. According to Patten, without these drastic measures, the treasury would have been exhausted by mid-2025. The project will now concentrate on four core products: the NFT marketplace, Bridgeworld, Smolworld, and AI agent scaling.
**Community and Market Reactions**
The announcement from Treasure DAO incited some backlash on social media, with community members questioning the project’s transparency and leadership. One Discord user expressed frustration, noting the recent shift from optimism to crisis, and questioned what was being concealed. Others, like Intrepidus.eth, voiced broader dissatisfaction with crypto projects, criticizing the management and expressing fatigue with crypto hype. Some speculated whether the Treasure team had offloaded MAGIC before the announcement, further undermining trust.
The token’s market performance reflects this turmoil, with an 18.3% drop in the last 24 hours. Its current price of $0.08316 is nearly 99% lower than its all-time high of $6.32 achieved in February 2022. The decline is even more severe over longer periods, with a 41.6% decrease in the past week and a 53.7% fall over the last 30 days. MAGIC has also decreased by 91.4% over the past year, indicating a sustained loss of confidence.
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