My thoughts on the end of the SPS airdrop

In this post I will do some assumptions on Splinterlands asset prices. The reason for this is the end of the SPS Airdrop in the coming weeks and what impact this could have on the ecosystem.

SPS distribution and value

First and foremost let's look into the SPS distribution:

This is official Splinterlands data:

Source	Tokens	% of Total	Release Schedule
Airdrop	400,000,000	13.33%	Issued over 12 months
Foundation / DAO	300,000,000	10.00%	Issued over 65 months
Private Sale	200,000,000	6.66%	Unlocked over 10 months
Team	270,000,000	9.00%	Unlocked over 65 months
Partners / Advisors	30,000,000	1.00%	Unlocked over 24 months
Play to Earn	900,000,000	30.00%	Issued over 65 months
Staking / LP / Oracle Rewards	900,000,000	30.00%	Issued over 65 months
Total Amount	3,000,000,000	100%

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What is important to notice is, that SPS won't go away for a long time. And even for players there is a huge chunk of SPS which will be distributed in the Play to Earn environment. These may be rewards in Ranked battles or Tournaments for example. I haven't seen the distribution strategy yet, but there still will be SPS to earn in the next 2-3 years.
To be more precise, more than half of the pool will be up for grabs through different means. So in the next few years I don't expect a big price spike on SPS due to low availability, except through limited offers (like the node sale was, and other sales exclusive to SPS).
I see currently the only use case of the token in staking them and receiving vouchers on a regular basis, which will be needed in the future for discounts as well as for the Riftwatchers packs (at least for presale, if not for more).
In the future SPS is promised to be used as a governance token, and additional use cases will be also provided to lower the supply. We will see what will come out of this.

So what could eventually happen is a price fluctuation at the end of the airdrop, as some SPS will get unstacked and dumped on the market. I think that it will normalize a bit below the current levels. A rise in SPS price would come when there are concrete use cases including the a government proposal.

What will happen to DEC after the airdrop?

The situation with DEC is a bit worrisome at the moment. After the end of the airdrop I see only 1 factor, which gives value to DEC and that is the packs and potions sold on the Splinterlands in game market.
I do believe there are still DEC holders, who have it only for the airdrop. I see 3 options for these holders:

• Sell DEC on the a 3rd party market - lowering the price of DEC due to high supply of DEC and low demand due to the missing use case.
• Buy packs and potions
• Hold DEC

In the long run as the Chaos legion packs will sell out the only other incentive for DEC will be to use it on future card sales and the land expansion. Unfortunately the card marketplace is not a good place to look for extra value, as the cards can be bought with credits, which can be gained from fiat and other crypto.
DEC will be used for renting cards for sure, but I don't believe a substantial amount can be burned by that.

The inflation of the DEC is also supported by the earnings in the ranked EOS and daily rewards.

If I'm missing something, then please let me know, but currently I can see only a steady decrease in the value of DEC, unless the Splinterlands team provides us with a new use case.

Chaos pack and Card prices

As mentioned above at the end of the SPS airdrop a lot of DEC will become without a use case. Now there will be a lot of people buying packs for the DEC they have. This is motivated by

• the fun to open packs
• possible increase in the long term value of packs
• being eligible to Chaos legion airdrops - legendary summoners

I do believe a lot of packs will be both with the DEC currently hodled for the SPS airdrop. The legendary summoners value should be quite high, and each such card will give a great advantage to holders in game as well. I might do this as well. This foreshadows also, that the first legendary summoner will be available latest right after the SPS airdrop ended.

The pack sales will lead eventually lead to a higher supply of packs on the secondary markets and the card marketplace. Both will push prices further down.

The advantage of buying card packs over holding DEC is that there is a limited amount of packs. So after a while the price of backs should increase (if the game keeps its popularity).

Summary

So currently I would expect the bear market to continue in the Splinterlands realm, which is partially a good thing, as it is easier for new players to join and for old players to increase their collection.
I have to add, that in situation like this the Splinterlands team often came out with a new idea, which at the end changed my market expectation, but currently maybe the best course of action is to develop the game in the background and get back with some awesome stuff in September. Summer is always a calm time anyway. I'm eagerly waiting for what will happen next. Till then...

See you on the battlefield

Feel free to add your thoughts in the comments, I would love to see some more opinions!

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If you are new to the game, then feel free to reach out to me on the Splinterlands Discord channel https://discord.gg/7TjZ2jg2 , my username is Arkasz#4109 there as well.
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Screenshots are from the Splinterlands site, Hive-Engine and the Splintercards.com site