First SPS DAO Proposal Which May Be Updated After Feedback, Before Going to a Vote
This morning I saw a message on Splinterlands' discord from Matt mentioning a vote through Hive on two different comments, where those interested should express their opinion whether or not DEC-B should be soul-bound or tradable.
In two separate posts (1, 2) I expressed my concern about DEC-B being proposed as tradable.
I was not the only one with that concern. Now, Matt has put it to a vote. Tradable or not?
The vote is currently leaning seriously toward soul-bound, which I believe is a great thing. That was my major objection to the proposal that made me indecisive. If the proposal will be changed to make DEC-B soul-bound, I will most likely vote yes to the proposal.
I'd like to alleviate some of the objections that were voiced vehemently against DEC-B, from my own perspective.
Not Another Token
This was one of the most often criticisms I've seen regarding DEC-B. People don't want another token, they want the team to focus on the core game features.
While I can't disagree with the second part, not even a bit, as a soul-bound token, I see DEC-B with different eyes.
I don't see it as a separate token, I see it as a separate DEC balance that is locked for most use cases.
Why does the game need this "locking" mechanism? To have a more predictable flux of DEC in the game economy.
Why would the players need it? It is a quality-of-life tool that helps plan ahead and it has an incentive. Let's talk about the incentive part a bit because that is something else some people don't like.
20% Discount When Using DEC-B
There were complaints that creates inflation. In my opinion, the inflation DEC-B can produce is only an issue if DEC-B is tradable.
Otherwise, the 20% inflation people are talking about comes into the game economy slowly, as DEC-B is being effectively used to upgrade buildings or buy stuff that can be purchased with DEC-B. This may be a point where criticism is still valid: we don't really know which will be the use cases for DEC-B. But we can guesstimate some of them for sure.
And let's look at things from a different perspective. If people don't have the incentive to burn DEC for DEC-B, they might compete with the rest of the liquidity providers in pools.
If they are looking to increase their DEC holdings, they will sell their rewards (SPS) to grow their positions. Thus, selling pressure on SPS.
If they instead are drawn toward the DEC-B option (and there's no guarantee all will go that route or with what percentage of their holdings), that's less competition on the liquidity pools, and potentially a higher APR for those remaining.
VOUCHER as an Option to Burn for DEC-B
That's another option that has been criticized because it creates DEC inflation.
The argument is correct. However, again, with DEC-B soul-bound the problem would be much more attenuated and additional inflation gets added over time.
One more thing. The additional inflation NEVER comes out as new DEC if DEC-B will be soul-bound. It will just decrease the amount of DEC needed to burn if this proposal passes. But people should realize that no DEC has been burned for land yet. And I imagine it'll amount to A LOT. And the burns will start way before the full gameplay for land will arrive.
The amount of DEC in circulation will invariably reduce as the faucets for it have been reduced to a minimum and the sinks remain in place.
This is of course my opinion, and I'm sure there are people who disagree with it. As there are enough who agree with it too.
In the end, I'll do what I believe makes more sense, both for the game and for myself. And I will vote yes if DEC-B becomes soul-bound.
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Learn about this game by going through SplinterGlossary.
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Yep, I hear it's a great resource. :)
Still inflation. It would cost 20% less DEC if you see them as one.
Otherwise 20% more DEC would be used.
There is zero purpose to have another token. Any “gains” are very shortsighted.
I respect your opinion, but I disagree. On the contrary, growth is only possible if inflation exists. The purpose of DEC-B (soul-bound, not tradable), is to make sure inflation doesn't hit the market at once, and it is not used to milk the game economy but rather for long-term investing in it. And the discount is a reward for those who give up certain use cases and flexibility that DEC has, to invest in growing an account or team. I already mentioned there are other ways to obtain a return, but at the expense of SPS and everyone else in liquidity pools, generally.
I see the soul bound point.
The problem with another token is it just gets complicated for new players.
Inflation is fine so long user growth outpace inflation, which is obviously not the case right now.
This is not a feature targeted at new players, in my opinion. Most people who will use it are players with a significant stake in Splinterlands and who understand it well.
That's precisely the point. Now there isn't much demand. Without that, prices fall. Unlike liquidity pools, where you might create a downward spiral by selling half the tokens (DEC or VOUCHER, in these cases) into the other token they are paired with, with DEC-B, you don't sell anything. Both DEC and VOUCHER are burned. Yes, you create more DEC-B, but that is used over time on certain use cases (so you can't sell them to drive the price down, for example - that is if we are talking about the soul-bound case).
Thanks for pointing out this vote. I have vouchers so I welcome a new use case for them. !PIZZA
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There should absolutely be no more sprinterland tokens. If that happens, SPS will lose its value. And people will lose trust in the game. The team should focus on new update, people are waiting for it.
SPS won't lose value if DEC-B is soul-bound.
Soulbound is the way.
That's my opinion too.
We should not have more tradable, soul bound should be the way.
Yeah, in this case, soul-bound makes sense. But that doesn't mean it will make sense in other situations.
Thanks for bringing the soul-bound DEC-B to my attention. Speaking of soul-bound, I thought this only applies to Gladius cards. First time hearing a token that is soul-bound.
!PIZZA
!CTP
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From what Matt said, they want to make it something like Credits. That is something else that we can't transfer or trade. The inability to transfer it should make us very cautious about how much we put on DEC-B because that is not a veritable crypto token. However, if Splinterlands goes down, pretty much all assets related to it, whether we can move them or not, become close to worthless.
That comparison to Credits is just fine and if DEC-B will really reduce the DEC supply, that to me seems good.
I think I would probably pick a no for this. If someone does want to get rid of DEC-B then they should be able to at a loss. DEC-B will always be worth less than DEC and I think giving people the chance to get back some of their DEC is better.
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Yeah, that's an argument I've seen, and it has a point. However, making the token tradable introduces a high risk of inflating the DEC supply quickly, and adds to the complexity of the game because of the price variations that will be speculated upon (to create more DEC inflation).
Sometimes I wonder if DEC is the main Splinterlands token instead of SPS. DEC gets so much more attention and I don't quite understand the "weird" obsession about getting DEC to peg. Token values aside, I still think the game itself is an awesome one!
In theory, if DEC goes to the peg and breaks above it, SPS will be burned to create more DEC and bring DEC back down to the peg. By burning SPS, in theory, its price will go up too. Thus, two things would be accomplished: DEC stays at the peg, and SPS goes up.
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I think the issue here is the liquidity of DEC and how to reduce the amount of DEC circulation and the use case of DEC to burn more DEC than creation.
And with the exchange rate of 0.8DEC for 1 DEC-B, there will be more DEC-B than burned DEC.
If I swap DEC to get DEC-B, I also have the same concern about the use case of DEC-B.
So I'm not interested to see another type of token but more about the use case of DEC instead.
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You would effectively reduce DEC in circulation because DEC is burned in the process. Yes, more DEC-B is received, but that is soul-bound and cannot be traded or transferred. Only used for the limited use cases it will be designed (and approved) for.