SPS Price Increased 34% Last Week. What's Next?

Significant developments have occurred in Splinterlands in recent days. The new Splinterlands tower defense game, the upcoming sale of the Riftwatchers card collection, and a big story to be announced at the forthcoming AMA...

Splinterlands' governance token, SPS, was positively impacted by these developments and the SPS price increased by 34% in a week. Thus, the increase in the last two weeks has reached 45%.

After the private sale coin emission ended in April and the airdrop was completed in June, I expected an increase in the SPS price. So I've been accumulating SPS since June. I am glad that my expectation has finally come true.

I pay great attention to the token economy in my investments. Especially when it comes to play-to-earn, the importance of the token economy increases even more.

Token Economy In Play-to-Earn Games

Building a stable play-to-earn game economy is difficult, especially when the prices in the market decrease and the tokens of play-to-earn games lose a significant amount of value.

Let's take the TLM token of Alien Worlds, which has a high user count like Splinterlands. TLM has lost 88% of its value since the beginning of the year. The AXS token of Axie Infinity, the pioneer of the play-to-earn category, lost 85% in the same period. SPS performed relatively well in this period, with 67% depreciation.

While some of the losses were due to the bear market, the real problem was the token economy. Game makers generate revenue through NFT sales, and in return, they distribute reward tokens. These tokens are devalued when the proceeds from NFT sales are not used to purchase reward tokens. Just like early DEFI reward tokens.

The depreciation of reward tokens also affects NFT prices. Because when the reward token value decreases, the income earned by the players from NFTS also decreases. However, if a portion of the amount obtained from the NFT sale were used to support the price of the reward token, a more balanced economy would be created.

It is an effective method to reduce or increase the amount of reward distributed according to the price of the reward token. Providing various additional utilities to reward tokens is also one of the methods used to solve the problem.

SPS Token Economy

Splinterlands has a more sophisticated token economy compared to other play-to-earn games. The stablecoin DEC is valid in the game, and vouchers provide discounts on purchases. In addition, credits, which can be considered the equivalent of dollars, are also among the game's currencies.

Distributed to players via airdrop per their Splinterlands digital assets, SPS is essentially a management token. I invested in SPS mainly because I see this token as the key to the Splinterlands universe.

Investors who did not believe in the long-term potential of Splinterlands sold their SPS tokens during the 1-year airdrop. The same is true for early-stage private investors. Most people who own SPS now are hardcore Splinterlands believers like me.

There are currently 886 million SPSs. Total SPS is expected to be 3 billion at the end of the five years. On the other hand, token burns may cause this number to be lower.

SPS token's inflation, close to 80%, dropped to around 42% after June. Most newly produced SPS are distributed as staking and game rewards. A smaller portion is given to SPS DAO and the team. Currently, SPS's staking APR is at 42%. This situation means that SPS stakers can keep their share of Splinterlands.

Digital Assets of Splinterlands

We can buy and sell digital assets of the Splinterlands universe through Tribaldex and the Hive Engine. The Tribaldex screen below shows the significant Splinterlands digital assets.

I have already mentioned SPS, DEC, and Voucher. In addition, there are many card packs, land plots that will have a great place in the future of Splinterlands, and validator node licenses that continue to be sold.

Besides Hive, SPS is also traded on Ethereum and BSC networks. Therefore, the total market value is missing in the table above. Currently, SPS's total market value is around $67 million. We encounter a much larger economy when we include other Splinterlands digital assets.

SPS Price In Last 12 Months

There was a long period when things went badly on the SPS front. With the downward trend in crypto prices and high SPS emissions, prices declined until the second quarter of this year. It was a plausible scenario that the SPS price would rise after the end of private sales emissions and airdrop. The Bitcoin chart below shows that this likely scenario has been running for five months.

However, SPS prices have not yet broken out on a Bitcoin basis. Although the SPS price has passed 300 Satoshis 4 times since April, it has not been able to stay above this level. We are making the fifth attempt with this rally.

Short Term Outlook

The RSI of the daily SPS/BNB chart is above 70. This value indicates an overbought condition. On the other hand, the price is still below the 200-day moving average. So it's too early to talk about a bull market for SPS. On August 8, the SPS price returned from the $0.084 level. It is possible to see the region between 8 and 8.5 cents as a resistance zone. Therefore, we may not be at the right time to purchase SPS. On the other hand, cost differences such as 5%-10% will not be significant when approached from a long-term perspective.

Conclusion

Splinterlands is a leader in terms of the number of users and the innovative solutions developed by its team. The Hive blockchain's low transaction costs and the Hive community's support also support this leading position.

I don't see Splinterlands as just a game. In the next five years, I think Splinterlands can be a billion-dollar franchise like Star Wars, Pokemon, and Harry Potter. The possibilities provided by Web3 technologies can take Splinterlands financially far beyond the media franchises we know today. I look to SPS tokens as the key to this exciting adventure.

I am not an investment adviser. Please do your own research on Splinterlands and SPS. Splinterlands Documents can be beneficial for this purpose.

Thank you for reading.

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