To do Web3, how did Nintendo's TreasureDAO fail?

Author: Cookie, BlockBeats

On January 6, 2022, TreasureDAO official issued a passionate declaration, "Web3's Nintendo will be a DAO."

On April 3, 2025, TreasureDAO released a nearly 15-minute video titled "The Next Chapter of TreasureDAO", announcing the decision to completely terminate the game publishing stack and game distribution and transform to AI.

After waiting for 3 years, I still haven't waited for my own "Nintendo". How did TreasureDAO, which was once prosperous, move towards loneliness step by step?

origin

Treasure was founded in September 2021 by John Patten( @smoldev__ ) and yyyy( @0xyyyy ). It first appeared in the form of a Loot derivative project. Loot NFT is generated by random weapon and equipment names, such as the following figure includes "Crown of Dragons", "Silver Ring", etc.

Loot NFT, which once made everyone say they couldn't understand, "Is this English word made of gold?"

Inspired by Loot, John Patten and yyyy believed that since randomly generating NFTs in weapon and equipment names is a wonderful idea, is it also interesting to randomly generate NFTs in RPG games such as "diamond" and "emerald"? So, the "Treasure Bag" below appears.

Soon, they established a pledge website where they can pledge NFTs of projects including $AGLD and Loot, Treasure and other projects to obtain Legion NFTs of $MAGIC tokens and Bridgeworld games.

According to a tweet posted by @arius_xyz on September 8, 2021, pledge a "Treasure Bag" NFT and you can get 3,600 $MAGICs in 30 days. The highest price of $MAGIC is $6, which means that a "Treasure Bag" NFT was pledged for 30 days, and it turned out to $21,600 after half a year.

Same as Loot’s vision at the time, Treasure wanted to build a bottom-up on-chain gaming world. After the eight materials in each "Treasure Bag" were split into NFTs separately, the number of pledge operations increased significantly. At that time, the congested Ethereum main network made the gas fee required for operation unbearable. Considering the current situation of poor player experience and the large amount of trading needs that can be expected after the game is released in the future, Treasure made the decision to move to Arbitrum. TreasureDAO was also officially established to promote this grand vision.

There was no NFT trading market that supported Arbitrum at that time, nor was there on Arbitrum. Therefore, TreasureDAO's NFT trading market also started. Later, this NFT market developed into Trove, and for a long time, it was undoubtedly the representative of Arbitrum NFT.

brilliant

At that time, the Treasure team's understanding of how to use NFT and gamification to create the latest DeFi narrative was a leading version. Even if you look at TreasureDAO's Medium now, I believe you will sigh, "They are really good at telling stories." "Liquidity is weather, liquidity is time, and liquidity is the measurement standard of space scope." This metaphor is always on the President's Mountain in my currency circle.

They can not only say it, but they can really do it. The speed at which TreasureDAO was promoting its work at that time was not only amazing in the Loot ecosystem, but also amazing in the entire currency circle. Just one month after the project was launched, it completed material splitting, material animation production, asset cross-chain and other operations, especially announcing the integration of a new game "Life". This was the first project from the community in the Treasure ecosystem but not produced by the team. The game concept at that time made me join the Chinese white paper translation work organized by @GavinGPT without hesitation. He also paid for all translators out of his own pocket.

During evolution, individuals will show new traits and experience age-> related changes. They will go to school, fall in love, and work in careers, experience many unique successes and disappointments in life, and eventually die.

Life is a long experiential board game. It should be an emotional experience. NFTs reproduce like humans, not like hamsters. They have limited lifespans but not ordinary, just like ours.

When co-founder John Patten said he wanted to do an NFT project called Smol Brains, many people didn't understand it, thinking that it would dilute the value of $MAGIC. But then, Smol Brains became Arbitrum's leading NFT series. This was the most successful storytelling GameFi series at the time, and what impressed me most was that when the storyline advanced to the island where Smol Brains lived was about to sink, Smol Brains holders needed to choose whether to leave the island on a rocket to go to the moon to survive. To build a rocket, Smol Brains must reach a certain number of IQ values ​​through pledge. At that time, Smol Brains was already a price I couldn't afford, but I was paying attention every day. Where would Smol Brains, which had insufficient IQ? Destroyed?

Smol Brain is a Free Mint project. At the peak of the price, you can earn $100,000 by holding a Smol Brains from start to finish. Another ace project of TreasureDAO ecosystem, Bridgeworld, Legion NFT, had a floor price of 20 ETH at its peak, which was an era when ETH diamond players were still proud of.

Prior to Treasure, Arbitrum's daily NFT trading volume was less than 1 ETH. Since the launch of the NFT market on November 13, 2021, it has achieved transaction volume of more than US$285 million in just 7 months. At the beginning of 2022, Treasure's market was the second highest-revenue NFT market in the world, and the Bridgeworld and Smol Brains series alone accounted for 10% of the total transaction volume of OpenSea.

At the end of February 2022, the price of $MAGIC reached an all-time high of $6.

Yuhui

The good times didn't last long, after the peak of $6, $MAGIC almost fell all the way. By May 2022, the price of $MAGIC fell below $1, and at its lowest point it fell below $0.3. Although there was a roughly $2 rebound in early 2023, $MAGIC has never returned to half of its all-time high since its peak.

Despite this, games within the ecosystem are still advancing steadily. There are more and more games that choose to join the TreasureDAO ecosystem. The most famous one is The Beacon, which was popular at the end of 2022. This is the last glory of TreasureDAO in my eyes.

Due to the long development time and difficulty of the game, a considerable number of games in the ecosystem ended up failing, such as the "Life" mentioned above, and the "Battlefly" that was once a 4-digit NFT.

In addition to the market attention caused by the radical change in development direction, the last time TreasureDAO stood in the market spotlight was still famous because of Shaw's AI concept. Shaw was the first to develop the Treasure DAO ecosystem, and he was responsible for Smol Brains' AI game project Smol World. Smol World’s vision is that each Smol Brains plays on-chain games as an AI Agent, which can steal each other’s assets to PvP, while the game itself is integrated with the Eliza framework. At that time, due to this positive effect, Smol Brains rose 4 times.

question

Such a major development strategy adjustment and the sudden announcement in such a weak market environment naturally aroused many doubts.

Chinese KOL Blue Fox was once a supporter of TreasureDAO. He commented under John Patten's tweet, "Why is it now? Why not earlier?"

This is also my question. During the hottest period of AI concept last year, TreasureDAO was not unwilling to market attention. Why did it not transform at that time but had to wait until now?

John Patten said in the video, "This transformation is not out of choice, but a necessity for survival. Even if it is financially healthy, this is the most rational choice." According to his disclosure, if only USDC denominated expenditures and stablecoins held are considered, TreasureDAO's current remaining operating funds are only available for continued until July 2025.

Currently, TreasureDAO vault holds $2.4 million in stablecoins to support infrastructure and Bridgeworld game development. In addition, Flowdesk (TreasureDAO's market maker) has approximately $1.49 million in assets, of which $786,000 are idle and can be retrieved. If DAO agrees to the proposal to withdraw this part of the funds, the stablecoin assets will increase to US$3.2 million.

There are still 22.3 million MAGICs in the vault, with a current market value of approximately US$2.3 million. Grants issued to game projects within the ecosystem are priced in US dollars, but are actually paid in $MAGIC, calculated based on the average price at the time of issuance. With the depreciation of $MAGIC, the actual number of $MAGICs required has increased significantly, which has greatly reduced the TreasureDAO performance capabilities.

Well, for this kind of inflicted situation, it seems that it can be explained by "decision-making mistakes and inadequate transformation". But TreasureDAO's financial expenses also made some players unable to understand - after all, the game developed is not a 3A masterpiece, is it so expensive?

Still, according to John Patten's disclosure, TreasureDAO's annual labor expenditure is about $6.1 million, annual operating costs are about $3 million, and the team number is once close to 40 people. When I asked ChatGPT to help me find a traditional gaming company with an annual operating cost of about $10 million, ChatGPT gave the answer to Telltale Games, an American gaming company that once worked as the Walking Dead and had an employee of about 90 people.

Arbitrum official Nina Rong also commented on the financial difficulties faced by TreasureDAO:

Did TreasureDAO get money when migrating to zkSync? It was collected, but it was burning. The grant from Zk Foundation totaled about $1.1 million, half of which had been promised to the game project and unlocked in two years. The annual fixed cost of operating the Treasure Chain is $450,000 (USDC-denominated), and even if unlocked as planned, Treasure Chain will still lose $175,000 per year.

Conclusion

The dilemma faced by TreasureDAO may be the dilemma faced by all projects in the currency circle. It is hard to accuse them of expanding outward when they have surplus food at home, but their belts are too late. The fall in the price of the $MAGIC coin caused by this unexpected official announcement is undoubtedly a worse situation.

At present, TreasureDAO has laid off 15 employees, completely terminated the game publishing stack and game distribution, communicated with game partners to cancel the remaining grants, and annual expenditure has dropped from $7.5 million to $3.8 million and plans to drop to $3 million within a few months.

But John Patten also emphasized that if $MAGIC depreciates significantly after the news is released and fails to recover, TreasureDAO will be difficult to maintain until 2026.

He proposed that TreasureDAO will carry out a strategic contraction and focus on four directions: NFT market, Bridgeworld, Smol World and AI Agent. A number of governance proposals are also coming, including the reservation of liquidation fees, the withdrawal of idle assets at market maker Flowdesk, confirming new product directions, closing Treasure Chain, etc.

TreasureDAO can also make games, but the vision of "Web3 Nintendo" has been completely erased. Faced with survival, they are no longer able to pursue their former ideals.

This ideal is not only theirs, but also the entire Web3. Whether we are the project parties or as Web3 users, we may never lose our ideals, but we may feel the loss of our ideals.

The times are over.