I'm having a look at the SPS price action this week in Splinterlands as from the looks of it, the recent pump which caused some hype has been rejected. This is where I most likely see it go in the near and long future...
The Recent Price Pump Explained
So basically with the pre-sale of Conclave Arcana, players who wanted to buy in needed DEC to do so which could be bought off the market at a discount price as around 50 days ago it was trading around 0.007$ which gives a 30% Discount. It looks like it was bought up to around 0.00097$ but it never went to the point where the Flywheel was activated.
DEC Price Chart
What happened more I believe is that existing players bought SPS anticipating that the price would go up with an eye on a successful pre-sale which might activate the flywheel. Some on them likely did it with an eye to burn at higher prices to get more DEC but with the price of DEC below Peg it was more profitable to dump the SPS on the market intsead.
SPS rallied from 0.006$ up to 0.01448$ (+127%) in about 10 days of upside before it started to come down again to 0.01$ (-31%)
Pre-Sale Dissapointment ?
From what I understand, there is a 20-day period for the pre-sale with a maximum of 500k Standard Packs, 100k Alchemy packs & 50k Legendary Packs. So far 82769 Standard packs (331k Dollars) | 36401 Alchemy Packs (437k Dollars) | 7943 Legendary Packs (191k Dollars) have been sold with 15 days left to go in the pre-sale. While that adds up to close to 1 Million Dollars worth of DEC that was burned, it still feels like rather low sales.
The reality feels like there is a core Splinterlands player base which includes some whales who are willing to buy in but with each new set this seems to be shrinking and no new players are coming into the ecosystem at least yet.
The top 7 Buyers in total equal roughly 25% of the total sales volume.
Where Things go Next ?
I would say there are positives and negatives. on the bright side, many existing players still are willing to unload which already brought in quite some revenue and with no more DEC created out of thin air by the team, it's only a matter of time before the flywheel to kick in. This most likely will come from the team who receive money from players who buy credits and need enough DEC to back that up. Once they run out of supply they likely will start buying SPS off the market and burn it. The good thing also is that there was no crazy 'scam pump' of SPS only for it to be used to briefly mint a ton of DEC before crashing down again. The lower SPS goes the more that will need to be burned when the eventually flywheel kicks in which is a good thing long-term.
However, many questions remain as all other asset values are more or less connected to SPS.
New Players Are Needed
Basically, that is all it comes down to as the game only can 'hold up' so long on existing players who keep pumping money into the ecosystem. So far I still see no real selling point for new players to come in. One of them would be a price increase of SPS which makes earnings in Modern great so it's a 'good investment' to buy packs and start playing. However, the need to also hold SPS and the fact that there is no real way to come into Splinterlands as an occasional recreational player is a major downside. Splinterlands remains a game where you need to be full-time engaged for it to be worth it which limits the player base massively.
The 3-month chart of new players coming in is quite sad with only 242 spellbook sold. This is where all the focus should go to while right now everything continues to resolve around getting more sales from existing players.
SPS Price Prediction
-> Short Term
I see both upside factors and Downside factors so I would say a relatively stable price around 0.01$ feels like the most likely case for SPS. For it to go up I would say that a new adoption wave needs to happen which will not be easy.
-> Long Term
Splinterlands remains one of the best Crypto games out there and it survived a lot of storms so far with no outlook for things to be shut down. We have come a long way and the core infrastructure of the game along with the Flywheel tokenomics are not bad. So I still expect that SPS is an investment right now which can be made at the current price that has quite some long-term upside potential. If anything, all value should get directed into SPS and especially if they manage to get new players in it can go quickly. They will need to have SPS staked and buy cards which both highly benefits the price of SPS.
Conclusion!
The recent price pump was nothing more that players speculating that the price would go up and the flywheel possibly getting activated with the pre-sale of Conclave Arcana. However, the only thing the game needs is new players and they simply are not coming in just yet. However, I remain hopeful about the future as there really is a fun game with Splinterlands.
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