Treasury Runway, Payroll Risk, and Why This Sale Matters for SPS

The DAO report shows Non-Splinterlands funds of ~$285,187 out of ~$5.56M total. That sounds fine until you measure it against the reality that the DAO’s core operating costs—primarily land development salaries and the DAO manager—are roughly $500,000 per year. Approximate Estimate

Runway (non-SPL assets only)

If operating expenses are ~$500k/year, then “clean runway” (assets not directly tied to the SPL in-game economy) is:

Runway (years) = $285,187 / $500,000 = 0.57 years

Runway (months) ≈ 6.8 months

****** This does not include the SPL INC company runway which is I believe much larger******

In other words: payroll obligations exceed the remaining non-SPL runway. The DAO can absolutely operate today, but without a strong sale outcome, it becomes increasingly likely that runway is funded indirectly by selling SPL-native assets into the market (which has price and sentiment consequences).

How much the sale needs to generate to cover ~1 year of expenses

At a minimum, the DAO needs ~$500,000 of stable runway for 12 months of operations. With ~$285k already in non-SPL funds, the bare minimum incremental amount needed is:

Shortfall to a 12-month runway = $500,000 − $285,187 ≈ $214,813

However, running with exactly one year of runway is not how you build investor confidence or survive volatility. A more credible operating standard is 12 months + buffer, putting the real target closer to $600k–$750k in stable, non-SPL runway.

Quick pack-sale “how many packs” math (gross, simplified)

If we use the commonly discussed mini-set pack reference pricing—$5 / 5,000 DEC / 350 SPS for Standard packs (and the analogous Alchemy/Legendary tiers)—then:

$500k gross at $5 per Standard pack = 100,000 packs

If buyers pay mainly in SPS, and SPS is around $0.007–$0.008, then 350 SPS is only ~$2.45–$2.80 of market value; you’d need closer to ~180k–200k Standard packs worth of SPS value to net ~$500k at conversion.

The key point: payment mix matters. A sale can “look big” in SPS/DEC terms but still fail to produce stable runway if conversion to stable assets doesn’t happen at scale.

What happens if the sale underperforms (and why SPS holders should care)

If the sale does not generate enough stable runway to cover ~12 months of payroll, the DAO is likely forced into some combination of:

Selling SPS from treasury holdings (or selling SPS received from pack purchases)

Selling DEC (which can pressure DEC below peg and damage broader economy confidence)

Reducing staff / slowing land development, which risks sentiment deterioration and user churn

That creates a scenario where SPS can get hit twice:

Directly, through treasury/token sales (increasing effective circulating float hitting the market)

Indirectly, through worse sentiment if roadmap execution slows or uncertainty rises

This risk is amplified by the fact that the treasury is SPS-heavy, so SPS price weakness also reduces the DAO’s “headline NAV,” which can weaken confidence in future initiatives and governance capacity.

“Endowment mode” recommendation (if the sale goes really well)

If the sale materially exceeds the runway target, the best treasury upgrade is to begin operating like a permanent-capital endowment, not a “spend-it-then-hope” fund.

Practical policy suggestion:

Create a ring-fenced reserve (“DAO Endowment”) funded by a fixed share of sale proceeds (example: 25%–50% of net stable proceeds)

The reserve’s principal is not spent except under explicit emergency rules

The DAO funds operations from:

a capped percentage of reserve earnings, and/or

a capped percentage of total treasury value, while continuing to build principal across future sales

Why this matters: with repeated successful sales, the DAO can compound a non-SPL reserve into a reliable cashflow stream, reducing future dependence on selling SPS/DEC into the market.

Realism check: to fund $500k/year from a conservative 4% spend rate, you need an endowment of roughly $12.5M (because $500k / 0.04 = $12.5M). That won’t happen from one sale—but it becomes plausible as a multi-sale program if discipline is baked in early.

To reduce correlated risk, this endowment should be concentrated in non-Hive / non-Splinterlands assets where feasible (stable reserve instruments and diversified non-game exposures), rather than doubling down on SPL-native assets.

Treasury concentration risk and a “less risky” allocation target

As of this report, the DAO holds ~$5.56M total, with only ~$285k in non-Splinterlands funds (~5%). These numbers may not reflect the most updated numbers but are likely close and illustrates the issue.

That composition is high-risk from a runway standpoint because:

SPL-native assets are highly correlated with game sentiment and SPS price, and converting them into payroll runway can require market selling at the worst time

A less risky % (to improve investor confidence)

A reasonable medium-term target (for confidence and operational resilience) is:

20%–30% in non-SPL, liquid reserve (stable runway + “shock absorber”)

5%–10% in diversified, non-Hive exposures (optional, policy-dependent)

60%–75% in SPL ecosystem assets (SPS/DEC/RIFT/etc.) aligned with DAO mission

This does not make SPS “fully book-backed,” but it materially reduces the probability of forced SPS selling to pay salaries—one of the cleanest ways to lower perceived risk.

Estimated “book value” per SPS (valuation lens, not redemption)

SPS holders do not have a contractual claim on DAO assets like equity holders do—so “book value” is a lens, not a promise.

Inputs from the report:

Total DAO funds: $5,558,174

Non-Splinterlands funds: $285,187

DAO SPS holdings value (in-game SPS + HE SPS + SPSP): ≈ $4,044,513 (from line items)

Circulating SPS supply varies by data provider, so here is a range.

Method 1: “Hard book” (non-SPL assets only)

Hard book per SPS = Non-SPL funds / circulating SPS

Using ~1.569B circulating: ~$0.000182 per SPS

Method 2: “Backing ex-SPS” (everything except DAO’s own SPS holdings)

Backing ex-SPS = Total funds − (DAO SPS holdings value)
≈ $5,558,174 − $4,044,513 ≈ $1,510,558

Per SPS:

With 1.569B circulating: ~$0.000963 per SPS

With 489.7M circulating: ~$0.00308 per SPS

Stress lens: “Heavily discounted SPL assets” (50% haircut on SPL non-SPS assets)

If SPL non-SPS assets (DEC/RIFT/VOUCHER etc.) are treated at a 50% haircut and non-SPL funds are valued at par:

SPL non-SPS assets are roughly DEC + RIFT + VOUCHER ≈ $1.228M

Discounted backing ≈ $285k + 0.5 × $1.228M ≈ $899k

Per SPS:

~$0.000573 per SPS (if 1.569B supply)

~$0.00184 per SPS (if 489.7M supply)

Interpretation: even under multiple “book” lenses, treasury backing per SPS is well below spot (roughly the ~$0.007–$0.008 area on major trackers). The gap is what the market is paying for future sinks, utility, and execution. Strengthening runway reduces that risk premium.

******This is not financial advice and you should do your own research into any of the numbers incase a error was made as well as many of the examples really need additional calculations to be much more accurate but the point would not change but for example the net liquidation value of the SPS n the DAO or DEC is likely much much less as nothing takes into account the slippage the DAO would get when selling SPS as the amount of liquidity is pull super large amounts out at once