BlackPool Report - Q2 2022
BlackPool continues it's strong progression throughout this year and manages to maintain its financial viability in the face of incredibly adverse market conditions. Read on to get a deeper insight into our financials, our inner workings and the latest happenings with both our Lab and our eSports division.
- Despite market turmoil, BlackPool ETH revenues remained stable compared to last quarter, allowing to distribute a total of 36 WETH reward distribution to veBPT holders
- The quarter has seen investments to 5 new projects that are leading the way in the ecosystem, injecting over 265 ETH into the ecosystem and looking to create long term strategic partnerships with those
- Furthermore, Q2 saw the introduction of three new revenue streams, namely Aavegotchi, Genopets and Cometh, that are expected to grow further over the next quarter
- BlackPool continues to be on the lookout for blockchain native innovation by continuing to focus on solid NFT projects with a multiyear vision. Our primary focus remains in the gaming sector and we expect this to continue to dominate our activities.
- Whilst a general market contraction in the wider gaming NFT sector has impacted asset prices across the board, we are strongly positioned to take advantage of new investment opportunities as they present themselves.
- Our highest yielding NFTs will be utilised significantly more in Q3 v Q2 as our eSports managers become more active in regular competitions.
Despite the European Football season coming to an end in May and June, Sorare revenues were in line with the last quarter, thanks to a better than expected performance in April, our strongest month on record so far. On the same trend, Axie revenues were also stable compared to Q1 2022.
As we continue to diversify our verticals, revenues from other streams increased compared to last quarter to a total of 8.51 ETH, and with Aavegotchi, Genopets and Cometh picking up momentum we anticipate increased inflows to BlackPool as these verticals evolve and scale over the next quarters.
The main cost items can be summarised as follows:
- Core Team Rewards: Rewards for Q2 for freelancer contributions from 30 contributors. These costs have been increasing due to the onboarding of new verticals in March, brought forward in Q2.
- Infrastructure: Costs linked to running and maintaining validators and servers, and other infrastructure expenses.
- Liquidity Incentives: Liquidity-related expenses to build out liquidity for the BPT/wETH pair on Comethswap.
- In Q2 as part of our internal restructure and move to creating a new eSports vertical we signed 2 of our managers on long-term eSports deals.
- Performance for the quarter saw our managers surpass over 190 ETH of tournament winnings (ETH + card prize value)
- Our AUEM (Assets Under eSports Management) has temporarily been pegged in ETH to our last calculated formula (May) and is pending a review. Whilst the value of ETH has dropped vs FIAT, Sorare card values are less correlated to ETH movements, we are confident that after our next review our AUEM will adjust up from its current conservative levels.
- Continued improvements and additions were made to the weekly tournaments with greater incentives now in place to encourage managers to progress from D3 to D2 which has helped underpin stronger values of high end Super Rare cards (which our eSports manager focus heavily on)
- Sorare ended the quarter with the major announcement that Kylian Mbappe has invested into the company and will join their team as both a Brand and Social Ambassador. Activity on the market soared immediately upon this breaking news.
- A start date in July was set for the launch of Sorare MLB. We will discuss the potential of recruiting a leading manager in the game after monitoring the early activity and uptake this receives.
- With a shorter European off-season, our Q3 outlook is extremely bullish. Both managers have made some significant new signings in the summer including the Unique cards of U23 superstars Vinicius Jr, Eduardo Camavinga and Aurelien Tchouameni, Nico Schlotterbeck and Maarten Vandevoordt and we cannot wait to see how they perform!
- Aavegotchi has introduced some exciting updates over the last quarter, with its farming season and staking pools just kicking off. This will allow us to exploit our lands, develop further in the Gotchivers and put to use out $GHST to earn $FRENS and $GLTR. Frens will allow us to buy raffle tickets and GLTR will allow to speed up upgrades on our lands.
- Our commitment goes hand in hand with the long-term vision of Aavegotchi. That is why we retain a Partner parcel in the most prestigious district of the Gotchiverse.
- Our main focus is on maximising the revenues from our paarcels as a guild. During the same time, our Aavegotchi are training to defend our lands for when the PVP and PVE will be live.
Asset Under eSport Management (ETH)
Asset Under Management accounts for the illiquid digital assets (mainly NFTs) which power the different P2E verticals.
The overall AuM decreased by 23% in the last quarter due to adverse market conditions.
Liquid Assets in Treasury (ETH)
Given market uncertainty we kept our treasury deleveraged (debt amount to zero), and converted the majority to stable coins to grow our stability and investment potential for the upcoming months.
Further, we decided to put the liquid asset to use, allocating part of the stable coins to yield generating strategies, expecting an annualised return of over 7%.
The Treasury is divided mainly into four different wallets:
- Treasury ETH: 0x07DFF52fb8B38E55E6eCb407913cd847396Af4f0
- Treasury Polygon: 0xb9d72519f9F9ec41a657C57c5A59a32737Ae6636
- Magic Vesting Contract: 0xe3fbAC93506359fC56CB51D7CE62057Cd51215Ac
- GOG Wallet: 0x6f7a398202e3543a561da240fcf7c4d0d157a092
With the following breakdown:
- Liquid Assets: $4,054,346.90
- Deposits: $0
- Debt: $0
- Other Assets (LPs): $26,260.41
Investments carried out in Q2 have been focused on doubling down on a few projects, as our in-house experts agreed to strengthen our positions, as well as investing in highly promising projects on Ethereum mainnet and Polygon. The diversification strategy that started last quarter was a core component of our focus for Q2 with an increasing proportion of investments made outside of our current well-established Troops, namely Sorare and Axie Infinity. On the back of this, investments on Aavegotchi and Cometh made over the last year, started to bring revenue streams and are expected to grow further over the next quarter.
On the other hand, given the change in market sentiment a portfolio in-depth analysis was carried out, to identify areas for investment and divestment opportunities. This has resulted in a divestment and re-focus of our portfolio towards revenue-generating assets and highly promising projects.
During the second Quarter, BlackPool decided to divest part of its Cyball position, in order to reduce the risks involved with the game.
In the end, we managed to divest a total of $13.8k
The BlackPool Lab
“Now is the best time to build” is currently on everyone's lips while talking about the current bear market and the BlackPool Lab can only but agree with this. We will even add that it is the right moment to invest time and capital into the most promising projects and people. We must, however, remain cautious as only the very best will survive the winter…
So, bear with us as we carefully scrutinise how best to navigate this challenging period and deploy our capital and resources.
During this quarter, very few projects made the cut, namely Immortal, Unbound Nation, Cyball, Chibi Clash and Influence. Immortal was an obvious choice given that chess is a timeless game and we are confident that the team will deliver the best product possible. Additionally, we chose to place our trust in Unbound Nation and partnered up on various levels, in particular by sharing our experience and expertise to improve on our execution and perfect our decision making.
Although Chibi Clash and Influence have arguably very little in common, they both entered the small circle of projects that we invested in based on gameplay. The former for its simplicity and the latter for its complexity. Influence’s vision goes way beyond a simplistic P2E approach and we respect that. So much so that we purchased one of the largest and richest asteroids. Go big or go home!
During the second half of 2022 and what is shaping up to be tumultuous market conditions, BlackPool will sail through by investing in only the very top shelf projects. Our strategy is clearer than ever: focus on solid NFT projects with a multiyear vision, particularly in the gaming sector, that still dominates our activities. Be ready for fewer games and teams of highly skilled players aiming for the top of the charts, in the footsteps of our Sorare eSport teams.
One of the original goals of BlackPool has been to lower the barriers of entry to the web3 gaming revolution and allow everyone the opportunity to participate in it. BlackPool Troops is the gaming guild of BlackPool. Players that are part of our guild can utilise our NFTs under management to earn a yield for themselves and the protocol.
With the Axie model losing steam, BlackPool has been working relentlessly to find new verticals in line with the aspirations of the DAO. With games like Aavegotchi, Genopets and more to come, the goal is to allow gamers to continue to enjoy the ecosystem and be a part of what we believe is the future of gaming. As new games progressively move from play and earn to a win to earn model, requiring more quality and level in game play, we support our players to get to the next level. BlackPool anticipated the change and we are focussing more and more on high-skilled eSports teams.
Finally, gaming is exciting but there’s more to it in web3, articles produced in conjunction with https://academy.stakedao.org/ as an easy access learning hub for gamers, translated into 10 languages enable our community to really get involved with DAOs and the metaverse in general, above and beyond the entry-level Game-Fi Play-&-Earn space. Rather than being pure value-extractors, BlackPool believes that by assisting gamers to acquire broader blockchain and DeFi knowledge they will be able to become a better integrated member of the crypto ecosystem.