DEC Journey Towards The Peg

over 1 year ago

Evening Splinterlands Fams

So as expected DEC have started its journey towards the peg. This was expected ever since Splinterlands announced replacing DEC with SPS as reward token about a month ago. DEC pump have got more pronounced in last 24 hours and at this pace I think soon we will have it lurking close to the peg.

As of now DEC stands at $0.0007743, still 23% below the peg. The peg is gonna get restored sooner or latter, as DEC crunch is gonna take its toll. There have been no new DEC emissions since SPS rewards system came into effect. All that excess circulating DEC have been getting sucked into the system as a result of primary and secondary market purchases(packs, potions and commissions). The DEC supply crunch is soon gonna exacerbate once SPLTD presale goes live in two days.

Lets do the maths:

DEC total supply = 477.5 Million
SPLTD presale Pack = 5000 DEC + Voucher
Total Packs in Presale = 250K
DEC used in Presale = 250K * 5000 = 125 Million

Looking at how the Rift Watchers presale went, I am sure SPLTD presale will follow the suit. So if all SPLTD Presale packs gets sold, 125 Million DEC would be utilized. That makes about 26% of the total supply of DEC, hence the resulting supply crunch and movement towards peg.

Current DEC pump is an indicators that interested parties are gearing up SPLTD presale. So, in wake of SPLTD we might get DEC achieving peg, atleast temporarily. Long term DEC peg will also be achieved for sure when SPLTD goes live.

It would also be interesting to see the tokenomics kicking in and the impact on SPS price. To handle DEC price over-shooting the peg, SPS burn mechanism for new DEC minting have already been placed. In case of DEC over-shooing the peg due to high demand, arbitrage opportunity will be created incentivizing people to do SPS-DEC burn&mint to meet the DEC demand and pushing the over-peged price towards the peg.