9/26/2023 0 Comments Splinterlands dec to usdMy estimation is that over the remainder of the airdrop period the total airdrop points will rise to around 15B, somewhat linearly, meaning we can use 12-13B for this analysis. We also don't know what other things will come into the game (more titles, land-related stuff) that'll add to the airdrop point total. We also know that CL packs, when opened, will reduce airdrop points (from my own analysis I estimate an average of 100-150 CP / pack). Given there are 14M unopened CL packs we know that'll generate 4.2B more airdrop points (300 / pack) however we don't know the timeframe. Now this is where it gets interesting - if you assume the price of SPS will rise dramatically, then the value of DEC will rise correspondingly (in fact, linearly) given the SPS that you'll be earning.Īs stated earlier, the total amount of airdrop points will increase and is slightly more predictable. Given we have two variables we can do a sensitivity analysis to determine the intrinsic value of 1 DEC based on these variables (the Y axis is the total airdrop points and the X axis is the price of SPS in USD):Īt the moment we're in the area represented by the blue box, and we can see the price of DEC roughly matches the intrinsic value from this analysis. The total airdrop points are slightly more predictable, but also somewhat variable (more on that below). The price of SPS obviously can change - I'm assuming most readers here hope it'll moon of course, but the reality is we don't know what'll happen (maybe a separate article on that at a later date). The two variables are the total airdrop points (higher means lower rewards for the same # of airdrop points you have) and the price of SPS (higher means better yield in $USD terms). The daily SPS distribution is fixed at 1.1M and the # days remaining we also know. The equation we can use to determine the intrinsic value of DEC is the following: Now that we've determined that the price won't be dramatically affected by inflation, let's look at how the airdrops give intrinsic value to DEC, with the price of SPS and the airdrop value of 1 DEC being the primary factors. Even if the amount of DEC added each day were to be 2x or 3x that, it still wouldn't have a material impact in comparison with the value of the airdrops. That's only about 0.01% "inflation" in airdrop points per day (we'll get to why that's important), or a 2.4% in the airdrop points balance over the coming 229 days. ![]() If you're wondering why this inflationary mechanism (1M DEC added every day for player rewards) doesn't have more impact on the price, look at it this way: 1M DEC adds 1M airdrop points to a current total (at the time this article is written) of about 9.6B airdrop points. (4) The inflation rate of DEC continues to be 1M / dayįirst let's explore #3. (3) There are currently 9.6B total airdrop points (combining all factors that contribute to the airdrop). (2) There are 229 days remaining in the airdrop as of today (Dec 10, 2021). (1) There are 1.1M SPS distributed each day via the airdrop rewards Some important data points as well as assumptions to keep in mind first: Ok so what does that mean for DEC going forwards? In a nutshell, I'll show you why I believe that the overwhelming force driving DEC price today (and for the foreseeable future) is the price of SPS, due to the airdrop points obtained with DEC. Furthermore, outside of an initially very large pump on DEC (probably speculative and expecting SPS to go straight to the moon.!), the two have largely been very correlated (roughly 0.9, which means they move together closely). DEC is created when cards are burned (monsters & summoners).ĭespite the intended peg, the price of DEC has rocketed upwards in the last few months, and that's largely due to the introduction of SPS and the SPS airdrop system.DEC is burned at the store, for certain purchases made using DEC.It has been hinted that this will increase when the Modern format is released as well. This is the primarily inflationary mechanism used to drive the peg. ![]() 1m DEC is released daily (on average) into a pool used to reward players, and this pool amount is decreased every 30 days by 1%.The mechanisms to drive this peg were primarily the following: ![]() When DEC was originally released, it came with a monetary policy that intended to keep it pegged at roughly $1 to 1000 DEC. I see a lot of questions around what the value of DEC is, whether it'll drop back down to its intended peg of $1 to 1000 DEC, and what the future holds for DEC, so I wanted to share an analysis, based on the information available today, of the intrinsic value of DEC.
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