Is Magic the next Nintendo in GameFi like 4399?

Author: Fiona, IOSG Ventures

TL;DR

• We are in the process of shifting from an infrastructure-centric approach to a user-centric one, with GameFi playing a crucial role in attracting mainstream users while enhancing user engagement. TreasureDAO is one such company, boasting a loyal community support that we have never seen before and is becoming an industry-leading decentralized Web3 gaming platform.
• Throughout its growth history, Treasure has demonstrated strong execution, self-iteration, and resilience. Adhering to core values of community-first, decentralization, and building permissionless free zones for games, it has evolved from Loot derivatives into a gaming hub with over 380,000 on-chain users and more than 18 independent games built on Treasure.
• Players are a scarce resource in GameFi, and Treasure has a unique advantage in this regard, providing infrastructure such as Web3 development tools for mid-to-high-end game developers. It is an attractive collaboration platform for Web3 independent developers seeking initial players and traditional developers trying to embrace the Web3 world.
• For TreasureDAO, once a blockbuster game emerges, it will directly benefit from the new vitality brought by these games. The Beacon has doubled Treasure's user base in the past two months. More users and quality games will create a progressively enhancing positive feedback loop, attracting more top game developers to participate in the ecosystem.
• The TIP23 proposal is a milestone event, marking the end of the era of passive staking for tokens, with quality game developers and ecosystem contributors set to receive more incentives. TreasureDAO is transitioning to a sustainable, game-first growth model.
• We can see similar shadows in traditional gaming, such as 4399 and Steam, but Treasure's imagination goes beyond that. The decentralization of Web3 and token economics deepen the bond between the player community and Treasure, creating a player and builder community-driven gaming ecosystem. TreasureDAO will accumulate and tokenize player activities, deeply share across the gaming community, and create interoperable features. This design will not be affected by the short lifecycle of a single game, thus enhancing the resilience and vitality of the entire ecosystem.

The Origin of TreasureDAO

2021.9: Official launch with a focus on serving the gaming ecosystem and community-first

Don Hoffman's Loot project launched on August 27, 2021—this was the first free-mint NFT project to adopt a bottom-up world-building approach, inspiring many NFT projects such as More Loot, AGLD, Realms, Quests, LootMart, etc.

Treasure is one of these projects, initiated by John Patten and Yuta in September 2021, with the core theme of community-first. It offered free minting of the genesis NFT Treasure Cards to the community and distributed some to the Loot community. Within a month of its launch, Treasure created its first revenue protocol, "Magic Farm," and added Legion NFTs to the incentive program. From the beginning, Treasure's iteration speed has been faster than any other Loot project, setting a long-term goal of creating a place with a loyal community for game developers to build upon.

John Patten even proposed a new concept, "Proof of Imagination: Joy as a Form of Collateral," which became a core principle in the early development of the Treasure ecosystem. Using DeFi concepts and applying them to the Treasure ecosystem was a clear mission communicated to its community members and investors early on.

2021.11: Transition to Arbitrum and launch of the first NFT marketplace

In the first month after launch, the team realized that if they wanted to impact the gaming community, especially through their unique bottom-up approach, it was not enough to stay on Ethereum L1. They decided to transition from L1 to L2. As we know, Arbitrum became the new home for the current TreasureDAO ecosystem.

Treasure officially transitioned to Arbitrum in October 2021 and launched the first NFT marketplace on Arbitrum, Treasure Market (later renamed Trove), in November 2021. Treasure incentivized this transition with Legion NFTs as rewards.

2022.2: The first flagship game, Bridgeworld

Bridgeworld reflects Treasure's early gaming philosophy. It is a strategy game centered around mining, farming, summoning, exploring, and more gamified DeFi actions. Atlas Mine is the staking protocol within Bridgeworld that rewards $MAGIC based on quantity, time, and NFT boosts (e.g., Legions and Treasures). It builds an interconnected economy on top of $MAGIC, Legions NFTs, and Treasure NFTs, aimed at guiding the Treasure ecosystem.

2022.4: Key improvement by introducing external partners instead of relying solely on core contributors

Soon, the Treasure team realized that merely building a finance-centric ecosystem was not enough. To achieve the vision of becoming a decentralized gaming hub, Treasure began to shift its focus to building tangible games and bringing in experienced game developers. In April 2022, it announced a partnership with Strider, a team of industry veterans building games in the Treasureverse. It was also at this time that Treasure decided to expand the Treasure system to collaborative projects rather than relying solely on core contributors.

2022.6: Rebranding, ambitious TreasureDAO

Treasure identified three key layers: the Armory (games and metaverse projects), Community (Treasure's sub-communities and community connections), and Infrastructure (shared economic engines, tools, and resources to enhance builders' capabilities).

This indicated that Treasure had enough confidence to build the first decentralized gaming platform, reshaping the next generation of games. For example, with the Trove marketplace, previously, Treasure planned to separate the two markets: Trove for all Arbitrum NFT transactions priced in $ETH, and the Treasure market priced solely in $MAGIC. But now the team is more confident in Trove becoming the core marketplace on Arbitrum and L2, deciding to merge the two and no longer distinguish between the Treasure ecosystem and external ecosystems, providing an integrated trading experience.

The Development of TreasureDAO

Current Ecosystem Overview

• Key Infrastructure: Trove Marketplace, Bridgeworld, MagicSwap, Treasure Tag, etc.
• 200+ Ecosystem Projects Pipeline
• 18+ Currently Announced Games on the Platform
• $267M Total Transaction Volume on Trove

Trove Marketplace

Trove Marketplace officially launched in June 2022. It evolved from the Treasure Marketplace launched in November 2021, initially intended to provide a trading market for NFTs from ecosystem projects on Treasure. Since its launch, the marketplace has seen total transaction volumes exceeding $267 million. As shown in the figure below, it is also the leading NFT trading marketplace on Arbitrum.

Source: https://dune.com/fritten_eth/treasuredao-ecosystem

Bridgeworld

Bridgeworld is now more of an infrastructure than a game. Below are its core components:

• Atlas Mine is where users lock $MAGIC and passively stake NFTs to earn token rewards. The recently passed TIP23 proposal has closed it.
• Since the closure of Atlas Mine, Harvester is currently the main source of $MAGIC generation. Users need to stake Harvester Parts (putting Legions NFTs into the Forge) and $MAGIC to earn rewards. There are currently 5 Harvesters, each with a capacity of $6 million. According to the roadmap, Harvesters will be able to accommodate any NFT from specific games and can serve as a Sink-as-a-Service framework for the Harvester Takeover competition. Knights of the Ether and The Beacon will participate in the upcoming first Harvester Takeovers competition.
• Forge is where Legions holders can combine various assets to create new assets. Treasure and consumable NFTs can be crafted here, which have different uses in Bridgeworld.
• Barracks is where players can summon new Legion recruits to start their journey in Bridgeworld. New recruits can be minted for 10 $MAGIC. Recruits provide a low-cost way for new players to access Bridgeworld.
• Starlight Temple allows players to tattoo Legions using consumable NFTs. The higher the tattoo level, the more features can be added to the Legion.
• Ivory Tower is where Legions complete quests to earn rewards such as Treasure shards.
• Monolith allows users to deposit $MAGIC and $ETH to earn Balancer Crystals, which are liquidity pool tokens usable in-game.

Source: https://bridgeworld.treasure.lol/

MagicSwap

MagicSwap V2 can change the game rules for the next phase of the Treasure economy. It is not only applicable to ERC20 tokens but also allows projects to create pools using ERC-1155 as the base pair, similar to Sudoswap, in an attempt to create better liquidity solutions for NFTs. Game developers can also leverage MagicSwap to create interesting trading rules without providing users with a direct way to exchange their native currency.

MagicSwap is committed to creating a more balanced and dynamic financial system, providing a frictionless experience for NFT trading, using $MAGIC as the governance and fee token. The protocol charges a 0.5% fee on transactions conducted in MagicSwap pools. It currently has $2.8 million in liquidity across two liquidity pools for the latest games and a 24-hour trading volume of $32,000: MAGIC-ELM and MAGIC-GFLY.

TreasureTag

TreasureTag ("User Tag") is a free, soul-bound (non-transferable) player identifier that will serve as a player's profile, identity, and the foundation of user reputation across the entire Treasure gaming ecosystem. It will launch various interoperable user engagement and loyalty features, such as a points system, badges, and achievements, to strengthen relationships with the community and its players. This social graph can activate all gaming activities within the ecosystem through referrals, task completions, and more. Launched just two weeks ago, it has already registered over 46,000 user tags.

Some Data

Among the currently launched games, the most popular (by MAU) are The Beacon, Bridgeworld, Battlefly, and Smolverse.

Monthly Active Users on Treasure Games

The activity of players across different L1 and L2 in the last 30 days indicates that most activity is still on Polygon and BNB; however, Arbitrum is the leader among ETH L2 and L3. TreasureDAO contributes approximately 76% of gaming activity on Arbitrum.

Source: DappRadar

With The Beacon gaining significant traction last month and attracting nearly 30,000 active users to Treasure, we estimate that TreasureDAO's value is undervalued compared to other platforms like Sandbox, Decentraland, Otherside, and Gala. We reached this conclusion by analyzing the MAU/FDV ratio, which incorporates monthly active users to represent its activity level.

Source: DappRadar, Duneanalytics

The Beacon Game

The Beacon is actually the first playable game in the Treasureverse. It is a rogue-like action RPG that has garnered significant attention for TreasureDAO. Before The Beacon's launch, Treasure's highest weekly active users recorded less than 10,000. The Beacon, however, has nearly 30,000 total users, almost three times the previous number of Treasure users. Moreover, The Beacon has contributed over $6 million in transaction volume to Trove.

Source: https://dune.com/fritten_eth/treasuredao-ecosystem

The core gameplay revolves around dungeon challenges as daily tasks. Thanks to the characteristics of rogue-like games: death and procedurally generated levels, The Beacon presents a certain level of difficulty. This challenge brings a high sense of achievement upon completion, as we see players, including Treasure's COO, showcasing their gameplay recordings on Twitter daily. Completing levels also rewards a treasure chest. The material and spiritual feedback create an addictive mechanism that is hard to find in current GameFi projects.

More importantly, it also adds social features. When players first create a character, the system automatically gives them an empty house to decorate. Players can collect various house decorations to embellish their homes. You need to play the game (or recharge money) to obtain home decorations. In the end, you can showcase and share your little house with your friends.

Source: https://www.thebeacon.gg/

Upcoming Games

Kuroro Beasts is a game studio that has been in development for over a year. In the past year, they successfully raised over $3 million in NFT sales and expanded to a team of 27 passionate industry professionals. Currently, they have two games in development: Kuroro Beast Brawl and Kuroro Wilds: Call of the Islands (mobile-first and monster-collecting MMO). Kuroro Beast Brawl is about to launch Open Alpha testing. It is a web-based turn-based auto-battler game.

The core NFT in Kuroro Beast Brawl is Beasts NFT, where players can team up with their owned monsters to compete in PvP mode. Players can also participate in battles and tournaments with other holder players. This is not just a simple button-clicking game; it requires strategy and skill.

The team's goal is to turn Kuroro into a competitive esports game through PvP, streaming battles to a large audience, and hosting millions of tournaments, among other things.

Source: https://twitter.com/mikelauofficial/status/1623797147803222016?s=20\&t=UPh7AJ-SSwr_4Y2dCJuOvA

Resource Token $MAGIC

In September 2021, $MAGIC was born, allowing users to earn $MAGIC tokens by staking Loot, $AGLD, n project, and Treasure. Of the tokens, 33% were allocated to users who participated in the initial 30-day staking activity. The team development and ecosystem fund retained only 25% (with financing coming from the ecosystem fund), while the rest was shared with stakers and players participating in the Treasure ecosystem.

The token overall references BTC's deflationary mechanism, setting a maximum supply of 350 million tokens, halving every year. Early in Treasure's establishment, the founders revealed their emphasis on liquidity and token economics in an article, envisioning $MAGIC as a resource token similar to ETH rather than a governance token with no practical use case. Moreover, $MAGIC needs to be staked to earn ecosystem benefits. The innovation lies in treating NFTs like Treasure as underlying assets and designing a dual-resource economic model. Users must stake both types of NFTs and $MAGIC simultaneously to obtain new items, which is also the early form of Bridgeworld.

$MAGIC is the only token that runs through the TreasureDAO ecosystem, serving as both a governance and fee token, and is the core resource connecting various game communities. TreasureDAO does not restrict games built on it from issuing their own tokens but actively helps them build economic systems and provides ecosystem support with $MAGIC. Currently, there are two aspects: one is using $MAGIC as a grant or early investment incubation asset, with BattleFly being a good example. The second is using $MAGIC as an underlying resource to compete for, such as in the Harvester Takeovers competition, providing opportunities for all games to compete for traffic and more resources; Harvesters may be the only channel to produce $MAGIC.

With the voting approval of the TIP23 proposal, $MAGIC is undergoing a redistribution of token distribution, marking the end of the era of passive staking for tokens, followed by Harvester Takeover competitions and more game development incentive programs, where quality game developers and ecosystem contributors will receive more incentives. It is transitioning from an NFT-Fi game filled with excessive financialization to a leader and pioneer in Web3 gaming, attracting renowned game studios and AA game development talent. This is a milestone event, as TreasureDAO shifts to a sustainable, game-first growth model.

Treasure's Imagination Goes Beyond

Similar to how 4399 accurately grasped the demand wave for mini-games, TreasureDAO is also targeting the long-tail gaming market. AAA games will only be a standard that a few major game companies can achieve, while the gradually growing Web3 player base will have a significant demand for such mini-games and AA games.

From a business model perspective, TreasureDAO is more similar to Steam, providing a consolidated gaming platform for players while offering services such as development and distribution for game developers or publishers, ultimately becoming a bridge between players and games. Steam is the largest game distribution platform, with 1 billion registered accounts and about 120 million monthly active players, charging up to 30% in commissions based on sales. Soon, as more and more gamers were attracted to the platform and its viral social features, Steam began to provide more tools and services for its ecosystem expansion, such as game development support backed by Valve.

TreasureDAO has currently generated a total market transaction volume of $267 million and over 18 games that are either live or upcoming. Although still in the early stages of development, it already has an active and loyal community that can play games, participate in ecosystem governance, stake, and more, forming a decentralized gaming ecosystem driven by a passionate community of players and builders, thus deepening the bond between players and TreasureDAO. As the Web3 player base grows, their tastes in vertical fields are also becoming diverse, and the demand for a publishing platform covering various types of games is soaring. TreasureDAO's primary goal is to attract excellent game development teams:

• Provide a set of infrastructure and environment to meet the needs of independent developers, such as building the Trove and MagicSwap trading markets, and collaborating with technical partners like MetaFab to build development SDKs;
• Deeply engage and support the economy of games, such as launching a competitive staking system for games within the ecosystem and $MAGIC, Harvester Takeovers, and token swaps and revenue sharing with BattleFLy. More importantly, as infrastructure like TreasureTag improves, TreasureDAO will accumulate and tokenize player activities, deeply share across the gaming community, and create interoperable features. This design will not be affected by the short lifecycle of a single game, thus enhancing the resilience and vitality of the entire ecosystem.

Reference Links: https://dune.com/fritteneth/treasuredao-ecosystem https://commonwealth.im/treasure-dao/discussion/8902-tip23-atlas-mine-cataclysm-sunset https://medium.com/@johnpatten/loots-proof-of-imagination-9d5f0a4b009a https://treasuredao.substack.com/p/magicswap-the-first-amm-with-universal https://www.geckoterminal.com/arbitrum/magicswap/pools https://medium.com/@TreasureDAO/founders-long-term-vision-for-treasure-project-c236bfee0039 https://www.gameres.com/898662.html https://businessmodelanalyst.com/steam-business-model/ https://twitter.com/Treasure_DAO/status/1621600181224615936