DEC-DAI Uniswap Pool Update

As most of you know, Splinterlands will be adjusting its promotion for Uniswap liquidity providers with the addition of a new DAI stablecoin pool starting this Friday, February 5th. For more details about these changes please see the original announcement post here: https://peakd.com/splinterlands/@splinterlands/dec-dai-uniswap-pool-and-other-updates

Since the announcement, a number of players who have been providing liquidity to the DEC-ETH pool have expressed concerns that their rewards will be cut in half when the changes go into effect.

Our hope and expectation with incentivizing a new pool is that the majority of the funds would be moved from the DEC-ETH pool to the DEC-DAI pool, due to the fact that it has significantly less risk of impermanent loss as a result of rising ETH prices. In that scenario, players who still choose to participate in the DEC-ETH pool would actually earn more rewards per dollar of liquidity provided than they would currently.

While we still expect the end result to be that more liquidity ends up in the DEC-DAI pool than the DEC-ETH pool, the current situation with extremely high gas prices on the Ethereum network means that it will likely take some time before people who want to switch pools will be able to do so without paying unreasonable fees.

In order to make the transition smoother and provide players more time to decide whether or not they want to adjust their liquidity positions and/or wait for lower gas prices, Splinterlands will be subsidizing the rewards for the DEC-ETH pool for 30 days after the rewards for the new DEC-DAI pool launch.

This means that the DEC-ETH pool will remain at ~274,000 DEC in rewards paid out to liquidity providers per day until Sunday, March 7th (30 days from this Friday) at which point they will drop down to ~137,000 per day. The rewards for the DEC-DAI pool are still planned to launch this Friday, February 5th, and offer ~137,000 DEC per day (or 50M / year) as described in the original announcement post.

The additional DEC tokens given out to subsidize the DEC-ETH pool for 30 days will not be new token inflation, but will instead come from Splinterlands' own account.