Founder Loses $1.8M of Project's Treasury Trading ETH

Founder Loses $1.8M of Project's Treasury Trading ETH
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Ragnarok Meta’s Fanfaron apologized for the “poorly executed” trades which led to a loss of about $1.827 million from the project treasury, according to a Substack article from the co-founder Friday.

Fanfaron bought ETH multiple times over the past few months as the price fell from around $3,000 in late April to a 2022-low of $993 on June 19.

“My intention was to diversify our treasury assets and set Ragnarok up for success. In hindsight, this was poorly executed and incurred losses that need not have happened,” said Fanfaron.

Ragnarok was one of the most hyped projects of this year — phase I of the public mint sold out 3,900 of the 7,700-edition collection at a price of 0.77 ETH on April 27 (3,003 ETH) after being touted by influencers like Andrew Wang.

The project converted the ETH in its treasury at $2,900, according to Fanfaron in a May Discord announcement, for about $15.5 million. 

But as ETH continue to plummet, Fanfaron saw “an advantageous investment for the project.”

“But then to protect downside risk and with the plan to reinvest at a better time, I sold our position in ETH, multiple times,” Fanfaron said.

The Ragnarok co-founder said he will be compensating the treasury for the $1.827 million in trading losses through $600,000 from “NFT sale compensation” and a past reduction in compensation by $600,000. He also said will forego wages for the next four months, which comes out to an additional $200,000. 

Fanfaron also said a fellow team member, Krimbo, will return $250,000 in what he calls “an incredible gesture.”

Fanfaron detailed all of the project’s almost $11 million expenses and $19.25 million in revenue in the article and revealed that the project paid $1.5 million to buy out an un-named co-founder:

Ragnarok's Biggest Expenses

  • About $1.827M lost due to trading, slippage and fees (repaid fully)
  • About $1.9M so far paid to ThreeSigma for blockchain development, audit
  • About $1.3M in compensation for core team members post-mint
  • About $1.25M in salaries for core team members in total since 9 months ago (56 people)
  • About $2.45M in compensation for founding members post-mint
  • $1.5M co-founder buyout
  • About $400,000 in salaries for founding members in total since 12 months ago (2 people)
  • About $423,000 for sweeps for Ronin

Fanfaron said the project leaders and the ex-co-founder “did not see eye to eye on the future of the project.” Fanfaron said the other co-founder owned 7 percent of the tokens, which haven’t been released.

The Ragnarok Meta floor price hit an all-time low today of 0.147 ETH — a far cry from the 2.88 ETH floor price the project hit before it revealed May 10.

The news of the treasury loss and co-founder buyout was greeted with futility Friday by Discord members. Fanfaron says the project still has about $10 million left in its treasury will which go toward taxes, legal costs, and development of the project's role-playing game.

“Like the next steps for the road map are f*cked,” said Discord member Junie. “The game that they marketed will never actually come out.”

Some NFT founders decried Fanfaron’s actions, despite the payback.

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