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Splinterlands | Reason I Will Vote NO On The DEC For Riftwatchers Proposal (Again)

By costanza | costanza | 16 Jun 2023


There is an upcoming proposal in Splinterlands where DEC is used instead on SPS to buy Riftwacthers Packs. I will once again vote NO on if for these Reasons...

 

 

Previous Proposal

 

At the end of October last year, this near exact proposal was already put om and was rejected with 57% of the SPS Stakers voting against it. The reason for it was that most that bought Riftwatcher packs with SPS felt screwed as it basically put packs at a big discount as 5000 DEC which packs would be 2.75$ instead of the 5$ price everyone paid. This on top at a time when SPS was worth a lot more.

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Reason For Proposal = "SPS Flywheel"

 

The way I look at all of it is there is an eternal conflict between the company having to make enough revenue in order to keep up with the rather high costs to run and develop the game while also potentially making good profit and part of the earnings actually going the SPS holders which gives the token value.

DEC was printed out of thin air like crazy during the good times which made things go up more at the time as everyone was earning a lot with the price of this being paid later down the line with DEC going way below peg which means that the revenue for the company tanked. Since most Chaos Legion Packs were sold for DEC since it was way cheaper for players, the team received that (not paying any kind of affiliate earnings) with no real way to capitalize on it.

So the narrative was created to almost fully switch the use case of SPS to it acting as a Flywheel in a way where SPS needs to be burned in order to create DEC which acts as a product-based Stable coin. However, before this can kick into place, a lot of DEC needed to get burned and less of it needed to be created. So there has been a crusade to get things back to peg inventing all kinds of extra costs like the "Starter Packages" on Land and the requirement to also stake SPS on top of each card when Land 1.5 Staking will be released. Right now there is also the Great Burning event and there was the DEC-B mechanic which gave a 20% discount for players that burned DEC now for future use.

 

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All of this got the price of DEC from 0.00055$ to 0.00079$ still quite a bit below the peg with a big supply left that needs to be sold/burned before the Flywheel potentially could get into action.


 

Influence on SPS Price

 

While the combination of the Bear market and the fact that SPS Staking Rewards which come from inflation are a major factor, the fact that SPS didn't have much use-case while it's given out as rewards like hot candy really hurt the price a lot. The entire Flywheel Narrative also is far from being kicked into action and one of the few things that actually gives use case to SPS is the fact that 5$ worth of it is needed in order to buy a Riftwatchers Pack.

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Why I'm Voting NO

 

  • SPS For Ritfwachers acts indirectly as a SPS Price Floor: I really like the original direct use-case for SPS in that a mini-set of cards is created that needs to be paid with in SPS which all gets locked up in the DAO. While the Price in Dollars Remains the same, the price in SPS goes up as the price of SPS goes down and the other way around. With Roughly 2 Million Packs Left, this means that at the current price of 294 SPS, 588 Million SPS is needed in order to sell out which equals over 20% of the entire supply
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  • Give it Enough Time and it will Sell Out: I see the Sale of Riftwacthers cards somewhat similar to cosmetic skins which took a long time but eventually most of them are sold out. There is no rush in getting all the Riftwatchers Packs sold and even if it takes 3-4 years that's fine.
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  • Not Much Changed Since the last Proposal: Personally, I see no real reason to put this up again and don't like this constant revoting on proposal that failed to see them pass afterward with little to no changes.

  • Less Reasons to Buy SPS: While an argument that can be made is that it's more convenient for new players to buy packs with DEC, fact remains that in the short therm, this passing should push the price of SPS down more as players might Sell SPS to buy DEC with the Flywheel still nowhere near in sight. Lower SPS Price = Lower Earnings = Lower Card Prices = More Players Leaving and less new Players coming in.

 

Conclusion

For Players it actually is beneficial for DEC price to be below peg while for the company earnings it is bad which is why the entire narrative of the SPS Flywheel usecase was created. While in the long term, this should be ok, in the short term this has done more harm than good and pushing this even further by pricing Riftwacthers Packs in DEC will make it even worse. This is the reason why I will be voting NO on the upcoming Proposal. Riftwatchers right now is one of the only reasons for players to buy SPS while enough already has been done to push DEC closer to peg. I think the team just needs to take the hit in company earnings when they release the Rebellion Expansion which should push DEC back to peg. Right now it feels like the players are taking that hit so the team doesn't have to when the next expansion releases.

 

Play2Earn Games I'm Currently Playing...

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