Splinterlands Ranked Reward Shift from DEC to SPS

Evening Splinterlands Fans

So, today finally the big news came regarding the anticipated change in in-game ranked rewards i.e. the switching from DEC to SPS as a reward token for ranked battle wins, daily focus and season loot chests. We may have a shift to SPS in couple of days from now if everything goes as planned on splinter-devs end or may be a week after if more testing is needed.

The point is the shift from DEC to SPS as reward token is gonna come soon enough. DEC is finally gonna take the role it was indented for i.e. as an in-game stable coin. Back when SPS airdrop started, DEC sky rocketed above the peg courtesy of increased demand coming from airdrop collection power. With SPS airdrop ending, Chaos packs sale and DEC LPs didn't proved enough to absorb the high emission of the token; so DEC lost peg again this it went below the peg.

Upcoming shift to SPS is gonna bring the much needed stability to DEC, the stability a stable coin needs. But the change is gonna not gonna be limited to just DEC; infact the oval economics of the game are gonna be affected.

Here is how DEC is gonna regain its peg... Lack of emission from in-game reward system is gonna create a supply crunch as DEC would still be need for in-game purchases like packs, potions and rental etc. So, as a response DEC is gonna pump. But to prevent DEC to pump above of the peg, second ingame token i.e. SPS is going to be used. There will be option to burn $1 worth SPS to mint 975 DEC. This will create arbitrage opportunity as in case of DEC pumping above $1.025 users can always mint 975 DEC from $1 SPS and sell that DEC in market to earn profit. This mechanism will ensure that enough minting of DEC happens to prevent it from leaving the peg.

Btw, DEC has already been pumping following the announcement. Its price is still way below the intended peg. So, DEC provides a nice profiting opportunity as it is gonna for sure achieve that peg once the tokenomics gonna kick in a few days.

With SPS assuming the place of DEC as reward token, its price might take a hit. But the DEC mint via SPS burn mechanism is partially gonna bear the load. Lets just say SPS price takes a hit, meaning more SPS is gonna be needed to burn for minting 975 DEC. So, the process seems to be self regulating. Also the SPS excess supply will not be available straight away, instead it will be provided as staked SPS requiring four weeks un-staking period. I believe that is also gonna fend off some excessive selling pressure.

With governance voting kicking in soon, I guess SPS is gonna find more utility as it will incentivize users to increase their SPS stakes in a bid to have more say into the game affairs. Plus, occasional events like mini-packs sale e.g Rift Watchers are also gonna help sustain SPS price.

But, with all these measures in place... will SPS gonna sustain the pressure of excessive release or not? I guess we are gonna find out soon enough. Not to mention, validator nodes SPS rewards are also coming down the pipeline.

My estimates are SPS price is gonna takes some hit initially but in a couple of months gonna find stability and balance around a decent mark.

What do you guys thinks?
Do let me know in comments below👇

Xabi Out 👋👋👋