GameSquare’s acquisition strategy to build up its digital asset portfolio was very intentional. They bought the CryptoPunk #5577, better known as the Cowboy Ape NFT, for $5.15 million. This strategic development marks the company’s expansion into blockchain-native Ethereum treasury management. They serve primarily to create on-chain yield and improve capital efficiency. GameSquare laid the groundwork for an impressive new investment strategy. They acquired 2,742.75 ETH for $10 million at an average price of ~$3,646/ETH.
With its Ethereum treasury holdings currently equivalating a staggering $52 million, the move shows how serious the company is taking their commitment to digital assets. GameSquare is looking to tokenize its shares on the world’s leading blockchains in conjunction with Superstate as well.
Our purchase of the Cowboy Ape is, therefore, not only a financial investment but a strategic one. This specific CryptoPunk was one of only 24 Ape CryptoPunks in existence, making it as sought after a digital asset as they come.
"Acquiring CryptoPunks showcases our belief in the long-term value of digital identity, decentralized ownership, and cultural capital onchain. CryptoPunks are digital artifacts that helped define an era. Adding the Cowboy Ape to our treasury is both a strategic investment and a statement of intent," - Justin Kenna, CEO of GameSquare
GameSquare plans to use CryptoPunks for brand marketing activations, community building, and future licensing opportunities. The original NFT collateral investment is just the foundation for a yield strategy that aims for a 6-10% stablecoin return per year, annualized.
GameSquare’s NFT yield strategy is being managed by 1OF1 AG, an NFT yield management company led by Ryan Zurrer. The company has established deep and strategic connections with the industry’s biggest leaders in the crypto space. Other recognizable names are Ryan Zurrer of Dialectic and Rhydon Lee of Goff Capital.
That custom ETH-focused yield generation strategy is powered by Dialectic’s proprietary platform, Medici. Medici’s approach combines machine learning prediction models and automated optimization with multi-layered risk controls to generate best-in-class risk-adjusted returns.
"I am thrilled to announce our first ‘grail’ NFT investment as part of the differentiated treasury management strategy GameSquare is pursuing," - Justin Kenna, CEO of GameSquare
During the acquisition, GameSquare issued $5.15 million of preferred stock to Robert Leshner as part of the acquisition docs. This stock can be converted into approximately 3.4 million shares of GameSquare’s common stock. Each share costs $1.50.
"In addition, we are excited to welcome Robert Leshner, one of crypto’s most respected investors and a pioneer of decentralized finance as a shareholder. This relationship demonstrates the unique, forward-thinking strategy we have developed to expand into the fastest growing edges of onchain finance." - Justin Kenna, CEO of GameSquare
Leshner's involvement as a shareholder signals a strong endorsement of GameSquare's strategic direction in the digital asset space. So far, GameSquare has bought $45 million of ETH with its $250 million buyback authorization.
"I’m excited to work with GameSquare as a shareholder, and support Justin and the team as they innovate on the digital-native treasury strategy, in traditional markets and onchain." - Robert Leshner
