GameSquare (GAME) Business Update summary

Strategic rationale and background

• Launched a $100 million Ethereum-focused treasury program to generate sustainable on-chain yields through DeFi protocols and Ethereum ecosystem assets.

• Aims to differentiate from simple Ethereum holding or staking by targeting best-in-class on-chain yields of 8% to 14%, plus staking and potential asset appreciation.

• Board approval and strategic partnerships with Dialectic and Goff Capital underpin the initiative.

• Sees the strategy as a natural evolution for a digital-first media, entertainment, and technology business, reflecting Gen Z values of digital ownership, decentralization, and community.

• Plans to use incremental annual profitability for further Ethereum asset purchases, share repurchases, and growth initiatives.

Treasury management approach and risk controls

• Partnered with Dialectic to implement a forward-looking, crypto-native treasury strategy focused on security, automation, and yield generation.

• Dialectic manages the Ethereum-native treasury strategy, leveraging automated systems for risk management, execution, and compounding.

• Employs hyper-diversification, with capital spread across 150–250 pools at any time, and robust machine learning-driven risk alerts.

• Multi-layered risk framework includes insurance, automation, diversification, and thorough due diligence to protect principal.

• Maintains full fund coverage insurance with Nexus Mutual, covering up to 20% drawdown with a 3% deductible.

Yield generation and market positioning

• Treasury strategy is active and yield-driven, targeting 8–14% ETH-denominated yield through risk-managed, automated infrastructure.

• Dialectic’s 2024 returns: 26.99% on USD, 14.02% on Ether, and 6.12% on Bitcoin.

• Focuses on DeFi lending, short-duration loans, and other strategies to generate high yields.

• Claims to be the only DeFi yielding fund with full fund coverage insurance.

• Partnership with Dialectic provides expertise and a data-driven, automated approach to yield generation.