An NFT-focused indie gaming project is on the brink of bankruptcy after the company’s CEO got too carried away buying ETH during a recession in the crypto market.
The head of the Ragnarok game project, under the nickname 0xfanfaron, published a letter in which he apologized for his mistakes in the leadership of a startup. In April of this year, the project raised $15.5 million for development through the sale of NFTs. The management exchanged the proceeds of ETH for US dollars and found this business model to be very effective.
Subsequently, the head of the company bought ETH several times when it fell in price, hoping to get a big profit. But the crisis in the cryptocurrency market dragged on, and the studio, apparently, found itself in a difficult situation, as development funds were rapidly drying up.
The CEO of the company emphasized that his adventure cost the company $1.8 million. He spent almost another $2 million on hiring third-party developers, and another $7 million on salaries and compensation for developers from the core team. However, in a letter, 0xfanfaron promised to compensate the company for all financial losses.
Over the next four months, the head of Ragnarok will cut employee salaries by $200,000, and will also return about $600,000 that he earned from the sale of NFT. Also, one of the team members promised to return his $250,000 compensation back to the project budget.
In addition, the head of the game project has published a list of wallets that he will use to compensate for losses, to confirm the transparency of his intentions. The company still has about $10 million left, according to 0xfanfaron.
“The investors and I had several conversations about my leadership of the project. They supported me and expressed their full confidence and consent that I continue to be the CEO,” added 0xfanfaron.
Polygon co-CEO Urvit Goel said earlier that traditional game publishers are interested in GameFi because NFT-based games have a clear advantage.
Source: Bits
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