Official Announcement: Degen Distillery Is Closing
Degen Distillery regretfully announces that it has entered administration.
Despite our team’s tireless efforts and a bold vision to revolutionise the spirits industry through blockchain integration, a series of operational, financial, and market related challenges has made it impossible to continue operations.
Background and Initial Strategy
In January 2024, Degen Distillery launched private funding rounds for its $DRINK token, a deflationary utility token linked to 721 Vodka sales, whereby a portion of each bottle sold would be burned to enhance token value. The token was originally scheduled for launch in April/May 2024, supported by an extensive summer campaign featuring 27 high-profile events, to boost brand awareness and vodka sales.
These events were designed to generate momentum for both the token and the product in a competitive market.
Challenges and Delays
The token launch was repeatedly postponed, first to June, then July, and ultimately to October 2024, following strategic advice aimed at optimising market conditions. These delays extended the company’s pre-launch marketing efforts and budgets by six months, significantly increasing operational costs.
The prolonged marketing campaign, alongside simultaneous promotion of 721 Vodka, strained
cash flow beyond initial forecasts. The extended financial burn depleted reserves, as the company funded events and agency partnerships without the expected token sale revenue.
Market conditions during this period increased these challenges. The Cryptocurrency market in 2024 was marked by volatility, with investor confidence waning after a speculative peak in Q2 2024. This dampened enthusiasm for new token projects, particularly in niche sectors like spirits.
Additionally, the spirits industry faced difficulties, with rising production costs due to global supply chain disruptions and a cautious consumer base amid economic uncertainty.
Token Launch and Financial Shortfall
The $DRINK token was launched in October 2024, but the presale, although initially sold out, experienced an 85% refund rate through launch pads, reflecting faltering investor confidence and market fatigue. This led to a substantial shortfall against the targeted raise amount.
Of the funds raised, $500,000+ was committed to exchanges and liquidity pools, making it unavailable for immediate operational needs. The combination of reduced funding from the publis sale and high allocation to non-liquid assets left the company critically underfunded.
Equity Fundraising and Seasonal Pressures
To address the funding gap, Degen Distillery pursued equity-based capital raises with the aim of reaching a crowdfunding round. However, this process was slower and more resource-intensive than anticipated, further straining cash flow.
These efforts coincided with challenging seasonal trends in the alcohol industry, notably Dry January and a broader slowdown in alcohol sales in early 2025. These factors constrained vodka sales, reducing revenue and hindering the company’s ability to stabilise its finances.
Whilst we were able to secure capital from top tier angel investors, our bigger investors who had committed large cheques, were unable to fulfil their commitments and rescinded their offers, further adding to the hole in our finances.
Current Situation and Liquidation
The cumulative impact of prolonged operational costs, an underperforming token launch, restricted liquidity, and adverse market conditions has rendered Degen Distillery unable to meet its financial obligations. The lack of budget to support product promotion or secure a robust summer 2025 event calendar has further undermined the company’s ability to recover.
After careful consideration, Degen has made the difficult and heart breaking decision to enter administration to protect our creditors and team.
Gratitude
We shouldn't have made it this far. After launching an NFT collection at the bottom of the bear market in 2023, and only selling 655 NFTs, most teams would have stopped.
The only reason we were able to keep going was the support of our amazing community. That support fuelled our ambition and we're hugely grateful to the community that supported us on our journey to date.
Whilst coming to the realisation that the business must close has been extremely tough, there is no worse feeling than letting down the people who support you - for that, we are truly sorry.
Conclusion
Whilst crypto twitter will always be tempted to refer to a failed business as a rug, it's disingenuous to the effort the team put in to build a real business in a space where speculation, memes, "daily runners" and gambling take the overwhelming mindshare.
Huge sacrifices were made in the mission to reinvent the spirits industry and huge support was garnered by the sickest community on the internet.
We're grateful for the memories and the effort of everyone involved to make this a success. Unfortunately, we fell at the final hurdle.
Thanks
Degen Distillery Team
decentraland