Three Arrows Falls, and the Funding Winter Reaches the Studio

In the preceding days, the Celsius withdrawal freeze, successive liquidations and rumors about Three Arrows Capital had piled up. The studio had already frozen hiring and postponed LAMOverse to protect the main game; A-Zhen was mapping handoffs for a limited team. Now the narrator and the finance staff also had to find out whether the funding discussions already under way still had any prospect.

Three Arrows Capital, which had once managed assets worth over USD 10 billion, was confirmed unable to meet margin calls from multiple parties. Beginning with positions damaged by Luna losses, leveraged risk spread layer by layer. In just one week, a leading crypto hedge fund once treated as “smart money” had become a major bad debt on lenders' books. BTC hovered near USD 20,000, and buying the dip was no longer the focus of conversation. For the studio, the most direct blow was to fundraising: of two funds it had been talking to, one went silent and the other politely withdrew its investment terms, saying only that it would wait for the market to become clearer. At the weekly meeting, finance said the USD 8.5 million raised late last year might have been the last train. From that day, the team had to plan spending for a frozen funding environment and stretch its runway by saving.

In the bull market, money had chased projects; now even money worth approaching was hard to find. The team had previously limited hiring and delayed a side project. With both concrete funding leads gone, the main game also faced spending choices. The narrator recorded finance's assessment and planned to review with the team which commitments had to stay and which could move later. How long the existing funds would last, and when prospective investors might return, remained open.