The Web3 gaming world has taken another hit with news of Treasure DAO’s dramatic restructuring. Announced via video on X, the move aims to extend the DAO’s runway through February 2026.

Restructuring Moves

Facing a treasury of just $2.4 million against annual expenses of $8.3 million, Treasure DAO has taken decisive action to extend its runway:

Discontinuing its game publishing arm

Treasure DAO initially positioned itself as a supporter of game development within its ecosystem, acting as a publisher for various Web3 titles.

As a publisher, the DAO offered funding, marketing, and game integration into its platform, leveraging the $MAGIC token and shared lore. However, the $MAGIC token, alongside many Web3 game tokens, has continuously slumped, weighing down on the DAO’s publishing efforts.

Phasing out Treasure Chain

Treasure Chain is an ambitious custom blockchain designed to underpin the Treasure DAO ecosystem. It offers faster transactions and tighter integration for its games and marketplace. Built on Arbitrum, the chain aimed to give the DAO more control over its tech stack and reduce dependency on external networks.

The chain’s creation followed the mainstream trend of chain customization. However, maintaining and scaling a bespoke blockchain is resource-intensive, requiring significant developer time and funding. The chain’s discontinuation has sparked debate in the community, with some questioning the timing of the X. With tremendous improvements to Layer 1 and 2 performance, the discontinuation could have come earlier.

Employee Layoffs

Treasure DAO’s workforce reduction involved cutting 15 employees, which accounts for over 30% of its staff, signaling a drastic downsizing. The employee cuts would hopefully reduce the DAO’s annual operating expenses.

Contributors have emphasized that these challenging changes were necessary given the deteriorating financial outlook. Without enacting significant cuts, the DAO would only last until September 2025.

Doubling down on Smolverse

Amid the cuts, Treasure DAO is refocusing on its core games, notably Smolverse (which includes titles like Smolworld). Smolverse is an artificial intelligence-created Tamagotchi-like game.

By prioritizing fewer titles, the DAO bets that quality over quantity will drive long-term value. This shift contrasts with its prior strategy of supporting a broader portfolio, which is now deemed too costly.

Negative Impact

The restructuring has ripple effects across the ecosystem, with several games opting to depart. Notably, The Beacon, a popular roguelike title, and Play Calamity, an emerging MMORPG, have confirmed their exit.

Competitor gaming ecosystems like Ronin quickly pounced on the news to invite departing titles. Since pursuing a permissionless model, Ronin has been welcoming more games.

Final Thoughts

Treasure DAO’s restructuring is a gamble to weather a storm that’s hit many Web3 projects. By refocusing efforts, the DAO hopes to stabilize and rebuild trust with its community. Yet, the loss of hit games has caused skepticism about the DAO’s long-term viability.