Treasure DAO Shutdown Sends MAGIC Token Down 18%
Blockchain gaming ecosystem Treasure DAO has announced a drastic restructuring, closing down its game publishing operations and Layer-2 network Treasure Chain due to severe financial strain.
The news sent its native token, Treasure (MAGIC), plunging 18% in 24 hours, worsening a months-long downtrend.
How Treasure DAO Got Here
Treasure DAO gained early traction as a decentralized gaming hub, using its MAGIC token to fund game development and partnerships. However, financial mismanagement and unsustainable costs have brought the project to its knees.
In a video shared on X, John Patten, the DAOs chief contributor, revealed that the organizations annual expenses have surpassed $8 million, while only $2.4 million in stablecoins remain in its treasury.
Several issues caused the financial troubles, including high labor costs totaling $6.1 million per year and infrastructure expenses of $800,000. Furthermore, the project had given out grants denominated in U.S. dollars but paid in MAGIC, which became increasingly burdensome as the tokens value dropped.
To correct the situation, the DAO proposed shutting down Treasure Chain, which consumes most of the infrastructure expenses and is deemed too costly to maintain. It will also look to recover $785,000 in idle funds from market maker Flowdesk to extend the treasurys runway.
According to Patten, the treasury would have been depleted by mid-2025 without the drastic cuts. The project will now focus on four core products: the NFT marketplace, which was hacked in 2022, Bridgeworld, Smolworld, and AI agent scaling.
Community and Market Reaction
Treasure DAOs announcement sparked some outrage across social media, with community members questioning its transparency and leadership.
One Discord user expressed frustration, saying, Just a few weeks ago, it was all hype and optimism, and now this? What was being hidden behind the scenes?
Others, like Intrepidus.eth, expressed broader disillusionment with crypto projects, lamenting, Most of those guys dont know how to run a bloody company really tired of crypto and the hype.
Some speculated whether the Treasure team had been dumping MAGIC ahead of the news, further eroding trust.
The tokens market performance has mirrored the ongoing turmoil, dumping 18.3% in the last 24 hours. Its current price of $0.08316 is almost 99% below its all-time high of $6.32, achieved in February 2022.
The downturn is even more pronounced across longer timeframes, with a 41.6% drop in the past week and a 53.7% plunge over the last 30 days. MAGIC is also down 91.4% across one year, reflecting a prolonged loss of confidence.
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