The CEO of a metaverse role-playing game called Ragnarok bought Ethereum during the crypto winter and lost $2 million of the company’s money. However, in just a few days, the CEO, who only goes by the name Fanfaron, said that he reimbursed 90% of the losses, according to his message to PC Gamer, a gaming media.The CEO of a metaverse role-playing game called Ragnarok bought Ethereum during the crypto winter and lost $2 million of the company’s money. However, in just a few days, the CEO, who only goes by the name Fanfaron, said that he reimbursed 90% of the losses, according to his message to PC Gamer, a gaming media.
“Regarding the ETH buyback, Fanfaron claims if he didn’t decide to ‘stabilize as soon, as we received our revenue,’ 60% of the treasury could have been lost.”
Fanfaron followed it up, saying that he and his key members “came back even stronger as a team after this event” to improve the early state of Ragnarok in the next six months.
He promises that the meta-RPG will include three worlds with plenty of gameplay value, multiple ways to level up, “interoperability of assets” between the worlds, digital authority over NFTs, an L2 protocol, an established economy, and social hubs.
How the Loss Happened
Fanfaron publicly announced in Substack that he was entirely responsible for the losses after a bad trade on ETH. He claimed that it was supposed to be an excellent investment to help boost the budget for the Ragnarok project but was caught during the mid-year crash.
“I want first to own and apologize for the trading losses. We exchanged the ETH from the mint originally to 15.5m USDC. As it turns out, this was a good move in treasury management.” He said in the open letter.
“As ETH price went down, I made mistakes by buying ETH multiple times when I thought it was 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. This led to approximately 1.827M in losses.”
Ragnarok is a crowdfunded project, earning $1.75 million from investors in its seed phase. The game marketed its NFTs, which earned $15.5 million. On the OpenSea marketplace, they earned $2 million in royalties. The project gained attention when Fanfaron said that Ragnarok would be similar to World of WarCraft, except players uniquely own the digital items, which include real-life value.
However, while the game is ambitious, it suffered from multiple missed deadlines, causing long delays before public testing could be released. The company started with $1.75 million in seed funding and has made over $17.5 million from NFT sales and royalties.
The game, which Fanfaron described as “similar to WoW but everything being digitally owned,” has suffered some delays, which were blamed on overexpansion resulting in missed deadlines. He also admitted to his limitations as a developer and mismanagement of funds. Yet, despite his shortcomings, he said that the investors still “trust” and “support” him as the Ragnarok CEO.
How He Recovered the Losses
Fanfaron had to decide to cut his salary from $600,000 to $200,000 and posted wallet addresses that point to the repayments. According to the interview with PC Gamer, he gradually saved enough to make up for the $2 million loss in the coming months.
Based on his letter, Ragnarok currently possesses more than $10 million for legal costs and development budget. The team promises to include NFT breeding, rich quests, rewarding combat, and an expanded metaverse for its active community.
The Potential of Ragnarok
Not to be confused with Ragnarok Online and Ragnarok X by publishers Gravity and Nuverse respectfully, the metaverse game of Ragnarok is set out to be one of the must-play games for the following years.
GameFi is in dire need of high-quality video games. Ragnarok plans to become the benchmark for combining MMORPG elements with a rewarding NFT system that will keep players coming back for more, not because of the profits but because of its fun factor.
Play-to-Earn (P2E) games skyrocketed in 2021, gaining people’s attention to join the cryptocurrency world. The model of “earning money while having fun” initially worked. Still, the sector would turn weak the following year due to a lack of replayability, dull graphics, and struggling rewards systems.
Ragnarok could potentially reverse people’s negative opinions about P2E gaming if it can provide competitive engagement and long-term reasons for players to stay and live in its metaverse. The game is still in its production phase and will launch an early access release soon.