Why is SPS token getting cooked?

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sps dumping continues.png

Every time I think SPS can't hit a new low, the token surprises me. At just around 2 cents, SPS is in fact heading to zero and I'm left wondering why this is happening.

At the time of writing, there's little to no incentive to actually hold or stake SPS token. Yes, there's the APR from staking but considering how the token has been dumping in the past couple of weeks, I wonder if it is even worth it.

I don't have concrete data but it is safe to assume that the fact that the market price of the token is dumping so aggressively is a sign that people are selling it. I mean, it's not rocket science, that's just how the market works.

For what it is worth, we're still neck deep in a bear market and it is safe to assume that it is a contributing factor to the situation. However, I feel like there's a bit more to the story than meets the eye.

Dumping your SPS?

Let's look at things the way they are right now and ask ourselves if there's actually any reason to hold or stake SPS token. Let's take a step back from what ifs and fantasies to actually objectively look at the situation.

On the surface, where I like to dwell, it looks to me that SPS is doomed for the dump and you really can't blame the market for the decision. At the time of writing, there's really no serious reason to hold or stake SPS token.

SPS token was created to be the governance token on Splinterlands and regardless of the price, it will always serve that purpose but that's hardly enough reason to drive up demand for the asset. Most people don't even bother voting with their SPS stake because they feel like at the end of the day, it's just going to be whales making the final decision.

Other than being the governance token of Splinterlands, SPS also serves as an onboarding token to other Splinterlands-related projects. For example, the GLX airdrop you receive for the GLS sport gaming platform that is still in development.

The GLX token hype died down as expected, knocking everyone back a few pegs and now the token is trading at around the same value with SPS token. So, it is safe to say that the airdrop wasn't enough to pump SPS token that has even been dumping during the period.

On one side, the attempts to drive up demand for Splinterlands assets haven't exactly been working and on the other side, there's also an increase in the SPS printing rate. Ranked battles, staking rewards, validator licenses and Guild bralws are just a handful of ways SPS is being printed in-game, without even considering the liquidity pools.

I hate to say it but SPS is going to continue getting cooked because the demand is dwarfed by the overwhelming urge to dump it. It is s ad state but one that I think will persist until something dramatic happens in the market.

Posted Using LeoFinance Beta



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9 comments
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There’s still a massive amount of sps that will be rewarded for many different things.

As prices drop more and more holders decide to dump, too reduce losses or even to buy back at a lower point.

I think that there is simply too much sps for the current player base, however at some point all of it will have been printed. Will take years to get there…

If a new influx of players comes, then this might change. But currently we are in a bear market.

Do note however that each Riftwatchers pack requires a ton more sps these days than it used to do

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I got some SPS on airdrops. Later I got GLX. I didn’t want to put more money in SPS as it looks no stop down. But looking at the road map of GLX I tough in December could have some moving up. I over invested as the rewards seemed nice, and I tough i got a good price around 0.5 HIVE/GLX. Now i see nothing happens with December road map. I did my worse move for November. Now i am power down to take the loss… it can stay lateral for months or even go down more. Who knows? SPS looks as an opportunity, but for now i only accumulating from rewards. It makes only a couple of Dollars ;(

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from $0.9 it has always fallen until today it is worth $0.024. it seems to be the chart of a token that can no longer rise, but I don't think so

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To me, it would still make sense to move from staking SPS(APR 23.70%) to staking GLX(APR 410%). Besides, GLX still has all the things coming up that'll probably create demand.

Posted Using LeoFinance Beta

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