Crypto Analysis | Will DEC be able to hold its peg?
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DEC is "pegged" at $0.001
But it has been anything but pegged at this intended value for the last year. It should be noted, however, that the devs don't have any mechanisms in place to keep it at this value. Instead, @yabapmatt mentioned in the last town hall that the idea is to sell Splinterlands items and NFTs (like potions and packs) at a fixed DEC value. They hope that this will stabilize the price for DEC as one will always be able to buy items at this fixed price. In other words, DEC will therefore always have a limited amount of value (which the team thinks is at this peg) if one thinks that Splitnerlands assets have some inherent value as well. It is obviously much more complex with there being an entire market for the NFTs as well as the SPS token for which DEC can be traded etc.
So it seems that we probably don't have to worry so much that price will go below the intended peg. But what the team also acknowledged is that there isn't really an idea for what to do when the peg gets broken to the upside. We have seen this "problem" for the last year when it was announced that one would get the SPS airdrop for owned DEC tokens. We can see the "pre-airdrop hype" starting at around June 2021 which catapulted the price 8x before the airdrop even started. We then had the airdrop and price reached a 14x at around October 2021. SInce then price has declined drastically with it reaching its peg again this month.
From a TA perspective there is a converging of two important trend lines coming up. The downward trend line from the previous highs as well as the supporting trend line from the former lows. But the airdrop is still ongoing for over 60 days.What could be see over that time frame?
Could price break out perhaps only briefly before going back down again? I think this is actually a strong possibility as we have already seen a 20%+ jump this week which means that DEC is still very speculative. Like I said before, there is no mechanism in place to prevent a breakout to the top and with two more months of the airdrop remaining I think many see a chance here to stack up on almost pegged DECs and get some free SPS (which reduces the risk from holding DEC a lot).
After the airdrop I think there is actually a good chance that DEC could stay close to its peg as I think that the airdrop was a one time event and the team now tries to put value in SPS.
So are you stacking up on some more DEC?
As a general reminder: Please keep in mind that none of this is official investment advice! Crypto trading entails a great deal of risk; never spend money that you can't afford to lose!
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A good analysis of DEC !
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Good analysis. When you can buy CL packs with DEC i think it will reamain fairly stable (relative to USD.)
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that's already possible!
For this peg to work, the store needs to simultaneously list the pack and other items at $1 = 1000 DEC.
When we transact in the market buy/sell cards, DEC is valued at market and not pegged - are we really expecting the market force to drive the DEC peg?
In reality DEC is currently worth more than the pegged as there's still a good 2 months of daily airdrop and the value = [discounted pegged amount (cash is always better than DEC, so DEC in theory should be slightly discounted)] + [expected value of SPS airdrop] +/- market volatility.
It will get very interesting as we get closer and closer to the end of the airdrop (or sooner if the overall crypto market experiences another leg down, and liquidity issue)
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STOPI invested in SPS last month and I feel comfortable with my investment. Yabapmatt and aggroed are both talented individuals, I rely on them.
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yeah, I have a lot of faith in them as well! And that is backed up by their actions :)
I believe dec will hold because they have done it before and the project team are amazing which give everybody a relief
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