#42 - Treasury report Q2, 2024
Breakdown of the current ecosystem treasury (the “Treasury”) including its current investments
We are delighted to share the second quarterly Treasury report of 2024.
As always, this report is intended to provide a transparent overview of the Treasury’s financial status. In the report, we share a breakdown of the Treasury as of June 30th 2024, including current investments and other financial activities.
Summary
During the past quarter, the Treasury increased from $201,252,368 as of March 31st 2024 to $235,350,991 as of June 30th 2024. This represents an increase of 16.94% compared to the previous quarter.
In Q2 2024, a total of 122,979,152 BEAM tokens were purchased and burned, at a value of $1,901,013.
After the crypto market ended Q1 on a high in April, the second quarter has been much rougher. Bitcoin and Ethereum held up relatively well, closing around 63K and 3.4K respectively (and since have dropped a bit further since the start of Q3). Bitcoin did a bit worse, losing a little under 15%, while ETH only lost 5%. However, both are still up 80-120% from levels a year prior. The broader stock market has been stubbornly going up, although it’s still mostly a few tech giants carrying the indexes, while most individual stocks are not really moving anywhere.
The Treasury has held up relatively well. Gaming as a category experienced rather challenging weather this quarter, and many of the Treasury’s liquid cryptos prices suffered a pretty significant decline, in line with the markets. However, at the same time we’ve been able to unlock a lot of new value through various deals that we’ve been working on - and investing into - for a while, that came to market this quarter.
A primary example is Aethir, a GPU compute on-demand network that we have acquired significant ownership in and are very excited about. With the advent of accelerating computing demand (fueled by growth markets like AI and Gaming), combined with a top-notch team that has already attracted a multitude of 8-figure contracts to the network, we feel like this is a very solid compute infrastructure play. One we take an active role in and one that can also benefit a lot of our gaming partners. These kinds of win-win collaborations that have both massive financial potential upside, as well as operational upside are the type of collaborations that the Treasury can really benefit from. It also makes the Treasury more robust, since it adds to the bucket of assets that are not strictly correlated with gaming.
Portfolio update
We firmly believe that providing thorough and meaningful Treasury reports is paramount to our mission of transparency and accountability. It is with this commitment in mind that we're excited to present a more comprehensive overview of the state of the investment portfolio.
In this update, we provide insights into the specifics of some of the largest or most exciting investment positions. This includes new investments or important updates to current portfolio projects.
Kokodi
A new investment comes in the form of Kokodi, an innovative third-person fantasy extraction shooter that transports players to a unique world without adults. This free-to-play game combines engaging PvP and PvE elements with a vibrant, anime-inspired art style. The game is built by an experienced team that’s passionate and offers a diverse range of game modes and a rich, immersive universe for players to explore.
We're excited to support Kokodi's growth as they build on Beam, leveraging the Beam ecosystem to enhance their gameplay and economic model. With its fresh concept and exciting gameplay, we look forward to the upcoming launch. Incubated by Seedify, Kokodi’s already gaining serious traction within the industry.
Fableborne
We continue to support Pixion Games and their innovative title, Fableborne. The game recently launched "Fableborne Adventures Season 1" and their Play-to-Airdrop event at the end of last quarter that’s been very well received so far.
Fableborne blends PvP and PvE gameplay with Kingdom Conquest raids and Race Against Time challenges. The upcoming event's prize pool of nearly 5 million Gold Essence showcases strong potential for player engagement and activity.
GuildFi → Zentry
GuildFi has evolved into Zentry, an ambitious Metagame Layer aiming to unite 3 billion gamers across digital and physical platforms. Zentry has transitioned from a gaming guild to a comprehensive “Play Ecosystem”, featuring applications like NEXUS (a gamified staking hub), RADIANT (a cross-metagame platform), and ZIGMA (an anime-inspired NFT collection).
The project's token has migrated from $GF to $ZENT, reflecting this significant shift. We're excited to see how Zentry's innovative approach to creating an MMORPG-like experience in real life unfolds. Following their migration and rebranding, we’ve forged a strong collaboration to collectively further the gaming industry.
Param Labs
We have invested in the strategic funding round for Param Labs as they are developing a modular, interconnected web3 gaming ecosystem focused on creating value for users and empowering developers. Their vision encompasses five key pillars: experiences, infrastructure, Param blockchain, governance, and the PARAM token.
By leveraging AI and blockchain technologies, Param Labs aims to revolutionize gaming experiences, enable true digital property rights, and solve scalability issues in the gaming industry. This investment marks another example of our investments not only in games, but also in the infrastructure making those games a reality.
Bluefin
Bluefin is a decentralized orderbook-based exchange designed for both professional and novice traders. Bluefin focuses on security, transparency, and redefining the user experience of on-chain trading platforms. Backed by industry leaders like Polychain and Brevan Howard Digital, Bluefin aims to enable users to onboard and trade within seconds by Q3 2024.
We have invested a small ticket of $50,000 to once again expand its exposure to more than solely gaming.
Sophon
We have invested in and contributed to the incubation of Sophon, an innovative entertainment-focused ecosystem built as a Modular Rollup utilizing zkSync's technology. Sophon aims to provide the necessary logistics for any high-throughput applications, examples of which include artificial intelligence and gaming.
Sophon has raised $10 million from notable investors and partners, demonstrating strong industry support. Additionally, Sophon has sold 123,554 nodes amassing over 20,000 in ETH. Concluding the node sale, Sophon has opened the farming portal. This allows anyone to deposit a wide variety of assets to earn SP (Sophon Points). To this date, over 220M in TVL has been committed.
Inevitable Games Fund
The Inevitable Games Fund (IGF), a $100 million initiative backed by King River Capital, Immutable, and Polygon Labs. We have committed a $5,000,000 position in IGF, of which half has been called, as it aims to nurture early-stage web3 gaming startups, providing a unique entry point into this burgeoning sector. IGF has already secured seven early-stage investments, including notable projects like Pixelmon, Metalcore, Guild of Guardians, and My Pet Hooligan.
This investment allows us to gain additional exposure to the market, and to speak to all of the games out there, even those outside of our current scope.
Pixelverse
We have invested $350,000 in Pixelverse, an emerging entertainment studio and game ecosystem that has raised $5.5 million in a funding round led by tier-1 VC funds. Pixelverse has shown remarkable growth, attracting over 75 million registered users and millions daily active users in less than a month of operation.
It’s exciting to witness Pixelverse pioneering the tap-to-earn narrative, blending gaming and social elements. As of today, Pixelverse has already converted 10% of all Telegram users, and is en route to make that percentage a lot higher. In anticipation of the token launching later this year, we’re seeing the anticipation grow.
Monad Labs
Monad Labs is the developer behind the Ethereum-compatible Layer 1 blockchain Monad that recently raised $225 million in a funding round led by Paradigm, with participation from notable investors including Coinbase Ventures and Electric Capital.
Monad aims to scale EVM performance by building a new kind of Ethereum Virtual Machine from the ground up, implementing parallelization for more efficient processing. In testing, Monad has reached 10,000 transactions per second, positioning it for potential mainstream adoption in consumer and B2B payments.
ARIA
As the lead investor in the seed round financing of Aria, we have invested $1.5 million, into the upcoming RPG blockchain game. The round also included notable investors such as Folius Ventures, Spartan Group, Galaxy Interactive, and Animoca Brands.
Aria aims to bring the immersive experience of RPG gaming to the blockchain, offering new opportunities for player ownership and in-game economies. One of their first acts of war is QioLabs, an attempt at bringing blockchain to the Apple Vision Pro.
Treasury overview
The Treasury balance as of June 30th 2024 is $235,350,991.
When calculating the Treasury’s balance, we only include non-native assets. This means we do not count the balance of BEAM tokens towards the total balance of the Treasury since it might paint a diluted picture of the reality.
BEAM tokens used for providing liquidity in AMM protocols are included together with their paired tokens, with the total value of each LP pool disclosed on the dashboard.
Since BEAM tokens will not be utilized for investment purposes, they will not be included in the Treasury’s balance sheet. Please refer to the wallet overview below for an overview of the current balance of BEAM tokens.
The Treasury also holds some very small positions, airdrop dust, residual tokens or gas fee money, with values lower than 0.001% of the total Treasury, these balances are not recorded unless they become more significant in value.
We will break down the Treasury in three categories; liquid crypto assets, NFTs and venture investments.
Liquid assets
NFTs
Tokens & equity
*Other
The recent version of the Treasury dashboard includes a section for “Other Investments”, split across the three categories of liquid crypto tokens, NFTs and venture investments. As discussed above, since the start of the year and during the last quarter, some of the portfolio projects have been underperforming and have seen a significant loss of value. The Other Investments line item aggregates the costs and current realizable value of those projects that have underperformed and thus will usually reflect a significant loss relative to the cost amount.
We feel it is important to be transparent with the community while maintaining the quality of the Treasury reports, thus positions which have negligible value or are written off can be tracked as “Others”, removing the need to provide each one with its own line.
Notable changes this quarter
Additions
In the previous quarter, we have added a variety of new investments such as Param Gaming, Infairy, TKO, Pixelverse, Sweep, Monad Labs and Kokodi.
Live treasury dashboard
We have updated our dashboard with the most recent data as of June 30th, 2024.
The Treasury dashboard is under continuous development to increase the transparency and accountability towards the community. It’s important to share correct information and provide anyone contributing to the Beam ecosystem with a clear overview of the Treasury’s current status. This is all accomplished through the Treasury dashboard.
With its development continuing and always changing, we are more than happy to receive feedback through any of the social channels. Without further ado, we invite you to dive in and see the current Treasury status on our dashboard.
Visit the dashboard here - treasury.meritcircle.io
Wallet overview
To operate completely transparently, we would like to provide a full list of wallet addresses Merit Circle currently utilizes.
Ethereum
Binance smart chain
Solana
Ronin
Looking forward
As always, the investment arm will stay laser-focused on the things it can control: contributing to building out the Beam ecosystem, Beam related infrastructure products and otherwise backing the best teams working on bringing the Beam ecosystem and adjacent ecosystems forward. The markets are an interesting component and will always affect portions of the Treasury, but they mostly dictate short-term Treasury values. The long-term Treasury value will be built upon a robust ecosystem that is not market-dependent.
Notes
All balances and prices are based on calculations made on June 30th, 2024.
All investments made after June 30th, 2024 are not included in the Treasury report unless specifically mentioned.