Treasure DAO Restructures and Cuts Costs in Attempt to Survive

Treasure DAO is restructuring and cutting products in a last-ditch bid to survive.

The decentralized gaming ecosystem will shut down its game publishing operations and its Layer 2 (L2) chain, chief contributor and co-founder John Patten explained in a video on X on April 2.

Stepping back into the leadership position from a role focused on R&D, Patten said he would ask the Decentralized Autonomous Organization (DAO) governing Treasure to “officially commit to a focused, streamlined approach of four products and four products only.” These are the marketplace, Bridgeworld, Smolworld and AI agent scaling technology.

Smolworld will be “fundamental” to Treasure’s future, Patten said, describing the pet-simulation game and Bridgeworld as use cases to showcase the marketplace and AI framework to other projects.

“That's all that Treasure should be through 2025,” he said. “Bridgeworld and Smolworld will be use cases to demonstrate how other projects can utilize the magic marketplace and our AI framework and back end to run many, many agents concurrently.”

Treasure DAO’s token MAGIC fell more than 20% in the 24 hours following the announcement, making it one of CoinGecko’s worst performers on April 3. It started April 2 around $0.10 and dropped to around $0.07 the following day. That’s down from $0.17 a month ago and $0.44 at the beginning of the year.

Treasure was bleeding funds

The situation is dire, the project's co-founder explained. Treasure DAO only has $2.4 million in stablecoins and 22.3 million MAGIC tokens, the value of which is falling fast, left in its treasury. That’s compared to an annual burn rate of $8.3 million before some staffers were let go and projects abandoned.

Patten said he is also planning to withdraw an idle $785,000 from market maker Flowdesk, to extend Treasure’s life as long as possible. That is somewhere between December and February at present, giving the DAO limited time to turn things around.

“I believe we have a real shot at turning this around and quickly,” Patten said in the video on Wednesday. “The goal is not simply to survive. I want us to become a top 100 token again, but to do that, we need new, fresh ideas and to establish an early lead in emerging markets. To be clear, I'm optimistic in our ability to recover, but no guarantees can be made.”

Back in 2023, Treasure was the largest recipient of Ethereum L2 Arbitrum’s $120 million distribution of ARB tokens to some 60 DAOs. One of the earliest DAOs on Arbitrum, it was able to airdrop eight million ARB worth well over $10 million to Treasure users. In December 2024, Treasure left Arbitrum for ZKsync, raising allegations of “grant-hopping.”

All this has led to more than a little confusion and anger on X.

X user Bartek said in a comment on the video announcement: “I'll just quote someone from discord. ‘Just a few weeks ago it was all hype and optimism, and now this? What was being hidden behind the scenes? Did John Patten not know the full financial picture? Why did you leave Arbitrum and launch a chain with such a grim balance sheet?’”