SPS Governance Proposal - Replace DEC LP Rewards With SPS
Currently 70M Dark Energy Crystals are being minted per month as rewards for players who provide liquidity to the various DEC token liquidity pools on third party exchanges. Recently, a community member suggested that instead of minting new DEC tokens for these rewards, we could instead reallocate the current SPS tokens used for LP rewards to also provide rewards for the DEC pools.
A proposal is being put forth to a vote of all staked SPS token holders to decide whether or not to reallocate SPS rewards to liquidity pool providers according to the chart below and remove the new minting of Dark Energy Crystals for these rewards.
| Liquidity Pool | Current SPS | Current DEC | Proposed SPS |
|---|---|---|---|
| Voucher-SWAP.HIVE | 375,000 | - | 300,000 |
| SPS-SWAP.HIVE | 1,500,000 | - | 1,300,000 |
| SPS-ETH | 1,500,000 | - | 1,300,000 |
| SPS-BNB | 1,500,000 | - | 1,300,000 |
| DEC-SWAP.HIVE | - | 20,000,000 | 200,000 |
| SPS-DEC | 750,000 | 10,000,000 | 825,000 |
| DEC-BUSD | - | 20,000,000 | 200,000 |
| DEC-DAI | - | 20,000,000 | 200,000 |
If implemented, this change would mean that players who provide liquidity in the four DEC pools listed above would receive SPS tokens as a reward instead of DEC going forward. The amount is listed in the "Proposed SPS" column. In order to pay out these new SPS rewards without minting more SPS, the rewards for the SPS pools would be decreased as is also shown in the table above.
The goal of this proposal is to help DEC maintain a more stable value near the intended rate of 1000 DEC per $1 USD at which point any additional demand for DEC tokens would provide value to SPS through the burning mechanism.
sounds like a good idea to me, if dec are only created by burning . that could also make me a fan of dec again!
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I like this one. If I'm not mistaken this would completely eliminate any new DEC creation apart from burning other assets.
This should significantly increase the speed of DEC reaching its desired value of 1000/$1.
I think EOS leaderboard prizes will still create new DEC for now.
Leaderboard rewards are still in DEC :p
I like it. Would this mean there would be essentially no new DEC created after these changes are deployed?
The only DEC minting left that is not the result of burning other assets would be the leaderboard rewards, which we are also looking at changing, but those are only about 7M / month, so quite small in the scheme of things. Otherwise DEC can only be minted by burning cards or SPS.
Please consider replacing DEC leaderboard rewards with 100-200k CL packs set aside for this purpose.
Ah, I forgot about the leaderboard rewards. Thanks Matt.
I will vote for this. Glad the pools all share the reduction in the DEC given out.
I like this idea a lot and would like to see some more numbers on how much dec is used so need to do some digging.
This one is more reasonable. I'm no expert on liquidity pools, but would it make sense for the rewards for this function to scale with the demand for them? IE. If there is low liquidity, the rewards go higher, if there is high liquidity, then the rewards go lower?
Interesting proposal, I would support this even though I like being able to earn DEC through these LPs. This prop should drive more price appreciation for DEC due to scarcity.
A proposal everyone can get behind I think. Getting DEC back to peg would help improve the game a lot, once we're there we can work on burning some SPS for additional DEC creation.
I would also love for the leaderboard DEC prizes to get reduced to 0.
Burning some DEC market fees would be great to help DEC get back to peg 🤔
I am voting yes.
Now let's go mint our Runi.
This is a horrible plan!!! You are taking SPS out of pools that I provide liquidity to and giving it to other pools that I provide liquidity while at the same time taking away the DEC I get. Net result is, I'm getting less rewards. That's the only thing this proposal does.
you can burn the received sps for dec after all
Will the LP reward go to stake? Or you can just swap it anytime?
can be exchanged at any time
How can I burn my SPS for DEC and what is the current rate?
@jokeruz
convert sps
but because it's a fixed number of dec you get, it's only worth burning when dec is roughly at the peg. when dec is above the peg you even make a profit. this is to make sure dec always stays roughly at the peg like a stablecoin
If you burn SPS for dec you're a fool. The exchange rate is lower than swapping it on Hive-Engine/Tribaldex.
it's about achieving the peg, then the exchange rate is no longer lower ;) since the exchange rate is a fixed value, if dec is above the peg you get even more, so you choose to keep dec at the peg, because once it's higher, all sps burn to make profit ;)
burn rate exchange is a lot less than swapping on pools. Don't ever burn.
you have missed the point you always get your value x 975 dec when you burn. this 975 is a fixed value. so you only make a loss when you burn if the dec value is too low, as soon as it is close to the peg you no longer make a loss
pretty deceptive that the percentage is not shown on the site and that it says "convert" and not "burn".
If everyone is getting less rewards overall, isn't that okay? The proportion of the rewards you'd be getting compared to everyone else would still be the same right?
Id rather see dec stay but thats why I invested my money i could never have made a company like this lol I guess i have a diff opinon bc i have all sides of the equation here. So alot of decisions have a good and bad impact on me
I agree with this and will support this one
People need to understand that APRs are going to move a good amount with this change.
Removing pool rewards to relocate those rewards to other pools to help sustainability and the over all health of the Splinterlands token prices seems reasonable to me.
I’ll vote Yes. This is a good step toward helping Dec reach peg.
I feel this should be contingent on the other two proposals passing as well
Plus one additional proposal to remove DEC from the Leaderboard rewards
With no new DEC production afterwards
That would get my yes vote since it creates a stablecoin
Burning would be the only way to create DEC
The Riftwatchers would need to be DEC based along with future card sets moving forward
I guess I can stop writing that post asking for this very proposal now. Yes please put this to a vote.
This is good. Now I think they intentionally put up those 2 horrible proposals (re: RW and nodes) so that this one looks like a genius proposal.
I don't know much about economies but have been pondering for a while if DEC will reach peg at all, before all existing DEC is locked up or burned. Holders of DEC are expecting the price to go up towards peg, but not much over it. So when DEC price goes up, the potential upside of holding DEC is diminishing. As DEC approaches peg, selling pressure will increase for anyone that is not necessarily using the DEC at that moment, pushing the price back down to find an equilibrium below peg. With a rising DEC price, people that expect to need DEC in the future see their risk in holding SPS diminish, because they can burn it for DEC at the right time and not lose too much value compared to holding DEC the whole time. As more DEC gets burned or locked up the equilibrium will move closer to peg.
So to sum this up into a thought/discussion provoking statement: DEC will not reach peg before the complete DEC supply is burned or locked.
Thanks in advance for your thoughts on this, if you want to share.
This eliminates one of the few ways to get DEC. With even minor additional demand DEC will go way above the peg (I'm thinking land when perhaps we'll need DEC to upgrade buildings and/or other functionality). I'm voting no.
I don't think DEC will go way above the peg, since you can burn SPS to get DEC at peg value. If DEC should get above peg, I think a lot of people will burn SPS for DEC and immediately sell it to get a quick profit, which would lower the DEC value again to peg.
I really don't see how that could be good for the game in any way. You would just move one problem from one place to another. All that SPL has been doing since the airdrop finished is bash the SPS trough the floor with all these giveaways. They switched the battle rewards from DEC to SPS... sps price goes down... pushed more SPS reward in pools.. SPS goes down. Now they started giving SPS just to hold tower defence packs and lands... That drove the SPS price down again! Don't you guys see the pattern here? If we remove the Dec from the pools and replace them with SPS... what do you think will happen AGAIN to the SPS lol.
I think they want to make sure the SPS is the same price as the current DEC price 🤣. Anyways it doesn't really matter in the end we will have to accept whatever the lords of SPL decide. It is not my little 4k SPS that will change anything😅. Cheers!
I like the proposal, turning of the LP for DEC will help DEC to reach Peg, But I think we need also to balance rework the rewards for SPS. I also think that by doing this since DEC is using for Building Brawls, Only way to mint new DEC is by burning SPS, So it means the Qty. of the SPS will reduce in a long run or in future.
I think the best way to implement DEC value is to put a floor on rental prices. With the new system, there's no longer an end of season rush that boosts rental prices.
Instead, it's now a wave where prices go up during small spikes in demand and then otherwise go flat. But it's extreme in variation. A card that may rent for 20 DEC/day for 3-4 days in a season can also be rented for 0.1 DEC/day for 10+ days in a season. A lot of the rental mechanisms lead to a race to the bottom of listing at prices slightly lower than the current market rate and this leads to cards - which clearly have people willing to rent at much higher amounts, regularly just getting listed at artificially low prices just because of the way an algo is designed dramatically drops prices whenever there is a slight lull in rentals.
I think if we installed a higher minimum rental price and/or required 3rd part rental services to make the default list price the median price and not the floor, this would help drive up the rental economy dramatically, which in turn would give DEC a real use case that would in turn increase its value.
This is removing $55,000 in rewards to Pool investors... Why would anyone vote yes on this?
so the only thing talking out of them is selfish greed....
Why don't you try investing in something and then be told your profits will be reduced.
this is your assumption, which first of all is only oriented on your personal profit and disregards the ecosystem and in addition you might even be wrong in this egoistic way of looking at things. because by not printing dec anymore and getting sps for it, the dec will be used up in circulation and you will inevitably have to burn sps to get new dec, which will increase the value of your sps from the reward. which might even make you more profit in the end.....
Your assumption is just as up in the air as mine :)
I have not denied that either ;)
It's just a short term. When DEC reaches its peg, all the gain will go to SPS. What if SPS price goes double from here? Will it be a loss or gain?
SPS does not have a history of gaining value, it keeps losing utility. The developers keep trying to take away what you can do with it. I don't see it gaining value until it gets utility. GO look at the proposals right now and see how the developers most likely are trying to reduce the value of SPS.
That's why the team has some changes to bring back the SPS value.
As an investor in the Hive:DEC pool. I hate this proposal. Get rid of the leaderboard rewards first.
This is a step in the right direction to enable all card value to flow into the SPS token.
There still remains credits which undermines the whole burning SPS for dec issue.
yeah credits should be removed so demand will flow into sps
I have read the thread and undecided yet. Not that my vote matters much. Looks like it is passing right now anyway. Can I abstain? 😀 Getting DEC closer to peg is good but losing liquidity not so good.
good proposal, one more thing maybe sps.dao can propose on minimum card rental to 1 dec, for now minimum rental is 0.1 dec, very cheap