I am a firmly believer of Fundamental Analysis, so this is what I'm going to do here. No looking at graphs and imagining forms, or basing the value of SPS by the position of the sun and stars; just plain old facts playing themselves.

I'm not a financial advisor, nor this is financial advise, and if you wanna check out my bullish thesis for SPS, be my guest here.

What are the Facts?

The Splinterlands twitter account posted on the 24th of October the number of SPS liquid and staked as 86,069,133 and 153,930,867 respectively. This amounts to a total supply of 240,000,000 SPS minted, and from the 24th to this day (27th), the amount of SPS staked raised from 153,930,867 to 159,467,165. If the supply of SPS had remained the same, we would have seen a total of ~80M SPS liquid right now.

That is not the case today, and six days ago Splinterlands released this post on Hive, warning that they would mint around 50M more SPS in the 26th of October. Those minted SPS are to be given as in-game rewards for players gradually. They will most likely be aimed at tournament rewards, and possibly as the new battle rewards that will come for the Wild and Modern format.

The total supply of SPS today is 311,145,833. This is around 70M SPS minted, a little more than what was described on the post released, but the post also said that the 50M was an estimative, so we can live that. Now, this increase in supply of SPS liquid can be one of the reasons why SPS price is dropping low, even though none of that SPS has really entered the economy. All of those SPS are kept safe to be given in the future, but players could be predicting the price of SPS to drop when those rewards are released to the mass, and then selling preventively.

SPS price

SPS price has been ~$0.8 for almost a month before it reached the today's price of ~$0.49. This was ~38.75% drop in the SPS price in a very short time, and the question we must ask ourselves is: is it justified?

As long-term investors we must be aware that Splinterlands will have the maximum supply of SPS as 3,000,000,000 and we are just in the beginning of the Splinterlands story. SPS will always get minted overtime, and most of it is going to be released over a 65 month period, which hasn't even begun. That means the most of the SPS supply will still be minted over the next 5~6 years. So inflation will be a fact from where we stand right now forward, the real question is how much value will the game provide for the investors compared with the amount of SPS minted.

That is a question that we must constantly answer as SPS gets minted, so we can not know about the future, but we can know it NOW.

The ~29% increase in the SPS supply had as consequence a ~38% decrease in price, without that SPS even touching the real market yet. But in terms of value, has Splinterlands gotten any less valuable as a game? Have the assets lost value? Has the player base diminished? We all know that SPS is growing non-stop for months, and its pace is untouchable. Assets have been rising in price like crazy; you can look at plots; cards; anything really. In a daily basis we can not only sense, but grasp the numbers of those values being added to the game.

Not Financial Advise

Whenever I see facts going one way, and price going the other way, I'm eager to play it. In this case, as I am an SPS long-investor, this is literally like a premature Black Friday. I encourage you to do your own research, and get your own conclusions; these are mine, and I hope they provided value for you.

Thanks for Reading!

If you enjoyed the content and wanna follow along I'd be very honored to have you.

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