SPS Staking vs DEC Holding
What's the best way to earn SPS?
Should I buy SPS and stake it, or should I buy DEC and hold it to stack some airdrop points?
For us to understand what is the best way to earn SPS, we'll have to dig into the SPS White Paper, make some calculations and understand the concepts around both SPS and DEC.
Here are some facts we know about the airdrop of SPS:
- The airdrop total SPS, which represents 13.33% of the total supply of SPS, is equal to 400M SPS and will be distributed equally during the 365 days of airdrops. For this post we'll use the approximated 1,100,000 SPS/day which is close enough for qualitative measurements.
- Everyday the total airdrop points is measured, and by dividing that number per 1,100,000 SPS you'll have the number of points that can give you one unit of SPS.
You can find the airdrop total points number of the day on https://splintercards.com/
Here are some facts about SPS staking rewards:
- From the white paper: "New SPS tokens will initially be added to the various reward pools at a rate of 37,500,000 tokens per month and will decrease uniformly across all reward pools at a rate of 1% per month, meaning that after one year the monthly contribution rate to the reward pools will drop to 33,239,400 and after 5 years it will have dropped to 20,518,400 SPS per month. These rewards will end after 65 months and at that point no more SPS tokens will be created." The 37.5M SPS goes to ranked battles, SPS staking rewards, land expansion, LP incentives, oracle rewards, tournament prizes and guild brawls. What we are really interested in right now is the 7,500,000 allocated for SPS Staking Rewards.
- The 7,500,000 number goes down 1% per month as explained before, but I'll use it as a constant number in our calculations for a easier qualitative result. This is not an exact measurement.
- We'll do a homogenous distribution with the 7,500,000 SPS/month, making it a 250,000 SPS/day. By getting the total amount of SPS staked and dividing that by the amount of daily SPS staking rewards, you'll have how much your staked SPS generates a day.
https://splintercards.com/ for the SPS Staked numbers
Using everything we've shown above and using the numbers of today, we can calculate what generates the highest benefit for a player right now. I'd like to discuss after this, a more long-term view of what I believe is the right hold, and why. Before we go on, I'm not a financial advisor, nor this is financial advise. Do what speaks to your mind.
For today's calculations we'll use the DEC price as $0.007867 or $7,87/1k DEC, and the SPS price as $0.36. So with an investment of, let's say, $1,000 how much would I'd be making if I bought DEC or SPS?
A $1,000 would amount to 127,113.25 DEC that will generate an equal amount of airdrop points since the DEC→ Airdrop points ratio is 1 for 1.
Today's total number of airdrop points is equal to 7.01B. So we would have 0.0018% of the total points, and as consequence the same percentage of the total airdropped SPS of the day. The daily airdrop is 1,100,000 SPS/day, so we would be earning 19.94 SPS/day. At today's prices that amounts to $7.178/day or $2,619.97/year. The yearly number supposes that everything remains the same throughout the year: Total airdrop points and SPS market value. Both of those numbers fluctuate everyday.
SPS Staking Investment
The same $1,000 would give you 2,777.77 SPS. Staking them would give you a share of the 250,000 daily SPS rewards.
Today's total SPS staked number is 65,100,000. Your share of the Staked SPS would be 0.0042% and this much would generate 10.66 SPS/day. At today's prices that amounts to $3.83/day or $1,397.95/year. The yearly number supposes that the price of SPS and the number of SPS staked remains the same.
So, is DEC a much superior investment?
It might be. It is impossible to know for sure, but I want you guys to hold as much information as I can give you so that you can make a very informed decision. Here is a list of very important things to factor in your decision:
- DEC is pegged at $1 per 1k units, which means that there's a certain pressure for DEC price to go down. This may happen soon, or this may never happen.
- SPS is the governance token of Splinterlands and its utility has just began to surface. Founders are engaged to give SPS more value and one of the upcoming features of it will be the voucher system for buying Chaos Legion (*New Expansion) Packs. If you don't know what I'm talking about, long story short→ Staking SPS will give you an asset called "voucher" which will be needed to buy packs. (1 voucher allows you to buy 1 pack) Vouchers can be bought and sold. As utility is added to SPS, the market price can change rapdly.
In the face of that, it is very difficult to have a sure verdict. Although it is clear that DEC pays better right now, SPS has a very clear potential to be a better asset and to produce long-term rewards for its holders.
I hope this brought value to you guys, and If I made any mistakes in the process please let me know, and thank you for reading.