IS BUYING DEC FOR THE SPS AIRDROP OVERRATED? LET'S CHECK THE STATS!

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IS BUYING DEC FOR THE SPS AIRDROP OVERRATED? LET'S CHECK THE STATS!

Hello, Kamusta and Hola everyone! A lot of people have asked me if we should still buy and hodl DEC for the SPS airdrop, especially now that DEC price is really cheap compared to how it was a couple months ago. So let's check the stats and see if it's still worth it!

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According to PeakMonsters, taking your SPS and staking it will only earn you a 35.77% APR as of writing this, and a 92.25% APR from holding DEC and receiving the SPS airdrop. So in some sense, having some DEC for the airdrop seems to be worth it. However with SPS price also being really cheap now, it begs the question, should we just flat out buy SPS, ignore the airdrop, and stake our SPS. That way we aren't holding onto DEC which has even more risks of lowering in price than SPS does, and we gain vouchers along the way.

Let's say for this example we have $100 to spend. What will the results be if we buy $100 worth of SPS right now vs buying a $100 of DEC to hodl for the remaining SPS airdrop.

$100 SPS

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  • Currently with a price of $0.168, we would be able to buy roughly 595 SPS.
  • If we stake that right now, claim it every day and restake it, we would be earning 43% APY instead of 35.77% APR.
  • If that APY stays the same we end up with 713 SPS tokens roughly. We can assume staking APR will go down overtime though as more people stake so let's say 675 SPS is more realisitic.

$100 DEC

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  • With DEC being $0.003749, a $100 would get us roughly 26,700 DEC if we round up slightly.
  • Now we use Splintercards tool to calculate how much SPS we will get out of the airdrop. https://www.splintercards.com/tool-sps-airdrop.html
  • 26,700 will give us only 534 SPS by the end of the airdrop.

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  • Even worse the Splintercards tool only calculated on current total airdrop points. When Chaos Legion sells out, we would be adding 4 billion more airdrop points to the whole system which means our airdrop points would only be worth about 75% of what they are now. That means we could be left with 400 SPS tokens airdropped to us.
  • Of course we can take these tokens and stake them and earn APY as well but even then we probably could estimate ending up with 500 SPS by the end of the airdrop if we are lucky.

What about Liquidity Pools?

Of course we could double our airdrop points with liquidity pools. However to do this we would have to have SPS already, or another crypto to match the $100 worth of DEC. If not, we would have to hold DEC, gain SPS from our airdrop, and slowly over a months put those together into liqudity pools.

Let's say we did have $100 of another crypto to pair it up with right away, and didn't have to slowly build it over time, that would double our airdrop points right away.

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Again this looks great at first but remember Chaos Legion general sale is coming and that could cut our airdrop rate to 75%. If that's the case we may actually end up with 800 SPS tokens from the airdrop. Stake them for some extra APY and there's an arguement that maybe, just maybe we end up with 1000 SPS tokens at the end of the airdrop.

Conclusion

Here are the potential results of spending $100 right now, and what we would have at the end of the SPS airdrop in July.

  • Buying SPS and staking it ≈ 675 SPS
  • Buying DEC and Hodl ≈ 534 SPS
  • Buying DEC with Liquidity Pool ≈ 1000 SPS

Buying DEC and using liquidity pools may be slightly worth it in terms of SPS earnings, but also is more risky as you have to hold DEC that is even more inflationary than SPS. Also the more SPS you stake the more vouchers you earn. We don't know the future value of vouchers as it will be used for different things at different times in Splinterlands but we should assume they have some future value. Also if you don't have another crypto to put into a liquidity pool with the DEC, it will take a while to get enough SPS airdropped to reach a $100 worth of DEC to match it. I didn't do the full math but it could take you almost the whole airdrop before you reach the full $100 liquidity pool. With that in mind I still think your better off just buying SPS right now and staking it.

Perhaps this is the reason DEC has fallen so hard and will likely continue to do so. Why buy DEC for the airdrop when now it's almost just the same to straight up buy SPS. If SPS went back up in price it might change it moving forward, but it's unlikely at this time that DEC will recover in price until Splinterlands gives it more utility. I fully expect it to hang around where it is or continue down to it's soft pegged value of $0.001.

So what do you all think? What is your strategy with SPS right now?



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7 comments
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I like your thought process and analysis! I have actually been debating whether to buy DEC recently, for some of the reasons you outlined. One thing that I got slightly confused by is that it seems like your calculation counts the SPS purchased in the SPS purchase option, but it doesn't factor in having the DEC at the end of the DEC route (though it is possible that you mentioned it and I just overlooked it). Figuring out the value of DEC at the end of the airdrop period would be tricky though since who know where the price will go.

Your article makes some great points - in particular, the return from directly buying SPS is much more predictable because you aren't exposed to the downside risk of DEC dropping in value, and also that SPS airdrops are going to decrease when Chaos Legion comes out and the total number of airdrop points increases dramatically.

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Good point! I forgot to factor that in so thanks for bringing it to everyone's attention. My guess is that DEC could continue to tank tho and so who knows! I guess even if it goes to the soft peg though that would leave you with $25-30 dollars left of DEC so that does change things. May give someone just a little more reason to hodl dec if they want to.

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