0x8b5453cf…b889sent to0xcdb9f8f9…a786·#23,563,749·0xc2225a59…eca9b4
# The Lootverse Microstrategy Proposal
The Lootverse Microstrategy Proposal
Now that we have seen the passive management proposals (first Aave/Lido, then Giza) passed, we are moving on to the more active part of Loot treasury management. Proposal to purchase core assets of the Lootverse, including but not limited to Loot NFT, Lords token, Realms NFT, Survivor token and Dreams token, etc, to both strengthen ties with ecosystem projects strategically and benefit financially. Further, it could start a massive growth flywheel that usher in a new era of Onchain evolution.
This is dubbed “The Lootverse Microstrategy Proposal” due to the model popularized by Strategy(formerly Microstrategy)
Background
Conditions are ripe for a Lootverse Strategy play
Main Lootverse games: both Loot Survivor 2 and Eternum Blitz version launching in September and October
Core Lootverse assets (Loot, Realm, Lords) all near all time low,
Ethereum approaching all time high, historical crypto cycle suggesting a peak by the year end (Bitcoin peaked Dec 2013, 2017, Nov 2021)
Punk Strategy (although inherently very different from what we are proposing here) gaining major traction with $pnkstr FDV crossing $300mil at one point
We think it’s a good time to start selling some ETH to accumulate major Lootverese assets, possibly catalyzing a positive growth flywheel (explanation later).
Principle of the Asset Purchase Plan
1. The assets purchased will need to be Loot-related
2. Loot treasury will be a long-term holder of those assets, barring some assets skyrocketing to ridiculous levels in the short/mid term
3. Buy low/dip/undervalued assets, do not intentionally pump/dump assets
4. Net amount spent on secondary market asset purchases should not exceed 30% of total treasury (need to sell first before buying more at 30% limit).
Note: Primary market purchases do not count towards the 30% because it gives money directly to the team. We set the 30% rule for secondary so that the majority of the money still goes toward the teams working on Loot related projects, either in the form of primary market investments or grants. Money for secondary purchases usually doesn't go towards the teams.
List of Assets in consideration
Loot NFT: target 3%
Loot NFT is still the center of gravity of the Lootverse. Created 4 years ago, the pictureless, text-only NFT was a major inspiration to the world. It demonstrated how a new complex fantasy world can be created bottom-up using merely some simple texts. Loot was the people in this universe. Each of the 8000 Loot bags held 8 items (weapons, armors, footwear etc) of those 8000 people. Hundreds of projects followed in its footsteps trying to complete this brand new universe and flourish in it. Adventure gold (AGLD token), Realms (cities/maps), Treasure, Genesis adventurers (high-end characters), even scrolls (stories), Heralds, underworlds. Sounds very complete, right?
Turns out 95%+ of them were scams, 4%+ of them maybe genuine but can’t sustain themselves long term or at least deviated from their original tracks, but the 0.5% true dragons were born amongst them. You don't get the final few without inspiring the first 500 teams.
First created by Dark forest and later carried over by the Lattice/Mud team, Fully Onchain Game/Autonomous world was the perfect scene to house Loot’s original vision. Lootverse builders, most notably Loaf and Loothero, soon become one of the 2 major forces in the scene. Their products, most significantly Eternum and Loot survivor, are the 2 major titles/series in the space. They are also the embodiment of how the Onchain game/Autonomous world scene has evolved. Deemed technically very difficult 3 years ago, the fully Onchain games now are fun, the user experience mostly smooth, and can scale to 6/7 digits players. After almost 4 years of Iteration, the tech has matured and marched very close to the tipping point for mass adoption.
Lootverse builders have shown great resilience and endurance to the point where most of the Fully Onchain game/Autonomous world community seemed to have given up already, they still hold on and are now the only ones carrying the torch.(R.I.P MUD)
Loot floor is sitting around 0.09e. FDV around $3m. A drawdown of 99.5% from its peak
Realm NFT: target 3%
Lords Token: target 3%
Realms NFTs are the Governance vehicle and Lords are the utility token for Realms project, Originally set out to be the maps/cities of the Lootverse, Realms has evolved into a massive Onchain game ecosystem. Its flagship product Eternum (think eternal game on ethereum) is a Civilization like SLG game that allows players to control cities/countries and fight against each other for the ultimate glory in the Lootverse backdrop.
The first few versions of the game last a few weeks. Recently the team is heavily testing and about to launch a new shorter version that only lasts 2 hours called Blitz, thus providing a more intense and swift RTS game experience. The team is also working on reaching its namesake, an eternal game played on ethereum. The fact that Eternum itself has multiple editions already shows massive modability of the flagship opensource/Onchain game.
Blitz testing screenshot
Realm is much more than Eternum. Realm has granted close to 20% of its total Lords supply to over 40 projects, including 5 major grants (over 5million $Lords) and 30+ minor grants (around 100k $Lords each), Currently Realm ecosystem has 6 live games and a dozen more in the works, (most of them fully Onchain, not many of them Loot related though). Composability and Interoperability also gradually shaping up.
Lords borrowed its tokenomics from VeCRV and created this VeLords system, where fees from different parts of the ecosystem, be it transaction fees in the swap/nft marketplace, or game fees, or infrastructure/protocol fees all flow back to VeLords stakers. Fees from the recently launched Loot survivor 2 has been powering triple digits APY for VeLords.
On the other hand, Realms NFTs are the governance vehicle of the Realms ecosystem. A record high 48% voter (3.8k out of 8k total) turnout participated in a proposal voting earlier this year, demonstrating stakeholder’s strong passion to participate in governance. Realm holders receive a free season pass to each iteration of Eternum. A new realm proposal is also in the works to direct some of the Lords revenue to buyback Realms.
Realm floor 0.07e, FDV 2.3m, peak floor ~2.2e, a drawdown of 97%
Lords price $0.016, FDV 5m, peak price ~$1, a drawdown of 98.4%
Survivor Token: target 2.5% + x%
(a separate proposal by Loothero, https://loot-dao-site.vercel.app/vote/12)
Survivor token is the centerpiece of the Loot survivor series by provable games. Created by Loothero, the Loot survivor series directly bears all of the items (yes, divine robes and katanas), hidden settings and stats (different weapons and armors have different stats and effects) in the original Loot contract and turned them into fun games
Loot Survivor 1 was the first live Onchain game in the Realm/Loot/Starknet Onchain game ecosystem. Players need to use items from the original Loot to fight against various beasts and climb up the leaderboard. An instant hit, the Loot Survivor game contract became one of the top 10 contracts of all time on Starknet within a month of launch.
The recent launch of Loot survivor 2 further steps up to dominate 25% of Starknet transactions. LS2 is a massive upgrade from the LS1 and LS1.5 with much better UIUX and a brand new Onchain dungeon engine called Death Mountain. In the mere 4 weeks since its launch it has already surpassed 35k in games played/created and has a revenue run rate of over $2 million annually.
Loot survivor 2 in-game screenshot
Loot Survivor was originally funded by both Realm and Loot, so it allocated 5% by default to Realm and 2.5% to Loot. Additionally, Lootdao will participate in the upcoming $survivor token launch with an additional 50e commitment (separate proposal by Loothero). $Survivor is a primary market purchase that doesn't count toward 30% limit
Dreams Token: target 1%.
Dreams was launched by Realm’s team when they were exploring AI for games and found something more general. Dreams is now the hot baby of the Agent payment sector. Dreams is still supporting agents in various games, including Eternum and Loot Survivor 2
Dreams price: $0.0042. FDV 4m, Previous peak ~$0.04, a 90% drawdown
We aim for 3-5% in the major assets as a decently big stakeholder, but not overly concentrated. Dreams is more distanced from Loot but still the brainchild of core Lootverse stakeholders, so aiming for 1%.
Purpose
Strategic alignment
Loot’s connection with its ecosystem projects to date has been purely spiritual, with almost no real tie. It was the founders (Most notably Loaf and Loothero) who got attracted to the infinite possibilities of Loot 4 years ago and kept the dream alive and running. With these purchases, Loot is going to establish a proper financial and managerial connection with its ecosystem projects, owning a few % with voting rights in each project.
This could also serve as a payback to years of services ecosystem projects like Realm and provable games provided, with little financial support in previous years.
Financial gain
Realms+Loot have formed a complex and scalable autonomous world ecosystem that could lead the next wave of Onchain evolution. Gamefi is like Cefi, while an Autonomous world/Fully Onchain game is like DeFi. Composability (just like Defi summer) is already taking off in the Realms+Loot ecosystem, with AI agents also playing various roles ($dreams usecase). This is the No.1 ecosystem in the space that has no visible rivals.
Think peak DeFi/Gamefi valuation as long-term targets, $Uni hit $50b, $AXS hit $30b peak FDV, roughly $5b circulating market cap. Why can’t $Lords? By extension, Loot should eventually return to or even exceed peak valuation (20ETH floor, almost $1b mcap) if this plan goes smoothly as well.
So the treasury has a lot to gain if the ecosystem reaches its full potential.
Plus, the assets are just dirt cheap. For the tokens, Lords at $5 mil FDV, $dreams at $4 mil FDV as well. $Survivor may launch at a similar range. For NFTs, Loot and Realm are at $2-3 mil. So downside protection is already there.
Growth catalyst
The potential is high, why is it not there yet? Product/Tech is one side of the equation, adoption/attention is the other side. While product and tech have matured a lot in the past few years. Adoption and attention have been lacking. We think it’s a good idea to tie everything Loot has together (especially the remaining attention that peaked 4 years ago, still lots of people remember it) to revitalize the brand and turn it into a mega growth flywheel.
Potential Growth Flywheel Composition
1. Loot treasury purchase of Lords/Realm reminds people that Loot is alive with games in the ecosystem.
2. Eco games like Eternum, Blitz, and Loot Survivor 2, etc, get more exposure and traction from existing Loot fans amid the recent NFT renaissance.
3. Loot NFT used and getting a piece of revenue from Loot Survivor 2 via survivor token
4. Lords token serves as base currency, gets revenue from Eternum, Loot Survivor 2 and any Realm ecosystem games.
5. Realm NFT holders get free passes every Eternum season, have 5% of Survivor token by default, also have the governance right to direct revenues of eco games (can use to buyback Realm NFT, separate proposal)
6. Any appreciation in the price of those assets will benefit Loot NFT as its treasury balloons
7. The flywheel gradually sped up to create an Onchain game craze, thousands of games forked from or created to be compatible with Eternum and Loot Survivor. Major assets (Loot nft, Eternum resources, Loot Survivor Beasts etc.) utilized across many of the forks
Bottomline, we can at least align ecosystem projects with the purchases, and have a decent safety margin because assets are super cheap even if the growth plan doesn't work out.
Difference with Punk Strategy
Punk strategy is a fun but pure ponzi game that creates essentially nothing. No product, only hype riding off a scorching hot market.
Lootverse strategy differs in that we have real fun composable/interoperable/scalable games to back it up. Even if it might overheat, we see potential like DeFi summer that thousands of composable/interoperable projects will be built on the network/worlds. Uniswap and AAVE grew 100x (figuratively) in defi summer and although they probably dropped 10x after hype cool down, they eventually outgrew their initial peak a few years later, solidifying the 100x because of the composable and scalable nature, plus the accompanying network effects. Looking back, it was the flywheel in defi summer that bootstrapped the network effect.
The same should apply here, that the autonomous world’s network effect will eventually sustain and grow even larger. Unlike the pure ponzis that dies in a few months.
Strategy
Buy
Buy low, buy dip, don’t pump, not necessarily DCA, but definitely try to spread it in a period.
Start big in phase 1 (as opposed to start small) because we are super familiar with and confident on the major assets regardless of the price, plus we want to make sure we have a big chunk in the treasury when the price is low. Starting small and buying big after it skyrockets could cause big losses, even with a relatively small drop.
Using simple number example,
Starting small
Buy $1 at $1/token , then it pumps to $10, then we decide to buy $99 at $10/token (because it 10Xed, you feel like a genius). Now we have $109 in assets with a cost basis of $100. If we have a 20% drop,right after, bringing price to $8/token, we now only have $87.2 in assets, a 12.8% loss to our total cost, rendering the initial cheap buy insignificant.
Starting big
Buy $50 at $1/token , then it pumps to $10, then we decide to buy $50 at $10/token. Now we have $550 in assets with a cost basis of $100. If we have a 20% drop right after, bringing price to $8/token, we now only have $440 in assets, still a 340% gain to our total cost. The low initial cost gives a big buffer to market fluctuation.
Starting small is a common mistake we absolutely want to avoid if we are confident about the assets regardless of the price
Start big at cheap prices, the higher it goes, the less we buy.
Sell
Generally the microstrategy series don't sell as an unspoken rule but probably never written. We’re going to employ a similar strategy.
As mentioned before, while the long term target has a super high limit (i.e. 30-50b for Lords token) . There could be extreme conditions that we might sell.
Short term 5-10x for the listed assets.
Mid to Long term 10-100x for the listed assets if approached or reached too soon
(Setting a more specific short to mid term sell target will definitely invite frontruns, so we can’t be more specific. It has to be on a discretionary basis. Setting it at $50b will probably get mocked but is obviously fine if frontrunned at 49b)
Essentially sell measures are to quiet down the irrationally hot market. We are happy to be in the quiet accumulation stage for a while longer.
Phase 1
Amount: 50 ETH (about 8.8% of total treasury if we combine the 100e unused with the 478e in treasury)
Duration: 2 Months
Target:
1% Lords’ total supply (15-20e, along with buyback using giza interest)
3% of Realm total supply (buy off Yanik’s portfolio via OTC at ~20e)
0.8% of Loot total supply (~10e)
0.3% of Dreams’ total supply (3-5e)
Regarding execution
1. Money will be in passive strategies directed by Giza. When needed, withdraw some to purchase the assets. Do have some reserve outside the passive strategies if that takes too long to withdraw.
2. To make things simpler, this proposal only rectifies phase 1, later phases will be decided by other proposals
3. Survivor token purchase of 50e will also be in another proposal (https://loot-dao-site.vercel.app/vote/12), it will span across phase 1 and phase 2 of this plan. If we factor the survivor purchase in, then Phase 1 is about 80e, Phase 2 is about 45e, total 125e. Survivor token is primary market purchase, not secondary, so it doesn't count towards the 30% rule.
4. No additional Realm purchase unless some absolute steals come up. It was supposed to be spread out but the Yannik deal is too good to miss.
5. Giza interest is about 4e every month or 8e every phase and will be solely purposed for buying Lords.
6. Actual purchase % could be vastly different from the suggested number above
Phase 2 onwards (not part of this proposal, but put here as suggestions)
We can keep doing this for 3 more iterations if core assets prices stay the same or drop further without selling. Current price levels for all core assets are absolute steals.
If they go up like 2-3x, we can still keep doing it. If any of them go 5x or more, we might stop, but that also depends on the market and the game development and launch process.
Phase 2
Amount: 25 ETH (4.4% treasury)
Duration: 2 Months
Target:
0.8% Loot NFT
0.7% Lords Token (along with buyback using Giza interest)
0.3% Dreams Token
Part of Survivor token launch purchase will happen in the timespan of Phase 2
Phase 3
Amount: 25 ETH (4.4% treasury)
Duration: 2 Months
Target:
0.7% Loot NFT
0.7% Lords Token (along with buyback using Giza interest)
0.4% Dreams Token
Phase 4
Amount: 25 ETH (4.4% treasury)
Duration: 2 Months
Target:
0.7% Loot NFT
0.6% Lords Token (along with buyback using giza interest)
Phase1+phase2+phase3+phase4+$Survivor token purchase
=50+25+25+25+50=175e
=31% of total treasury
(Survivor token is primary market purchase, not secondary, so it doesn't count towards the 30% rule)
If the 4 phase plan plays out fully in 8 months
~30e goes to Loot
~20e goes to Realm
~10e goes to $Dreams
~65e +32e from giza goes to $Lords, almost 100e
~50e goes to $Survivor
Projections subject to lots of changes
https://docs.google.com/document/d/1AklsjBVCPOlWN7ANAZW8UbJ3BB1y4nGtS6jNIU_isvY/edit?tab=t.0#heading=h.avfzfxtfcg76