Let me follow up trying to explain blockchain gaming economies.
We could ask how everything above is inevitable, will happen anyway?
Dcity sold all the SPS received from airdrop, significantly increased holding rewards, and distributed 0.5-1m$ rewards that year(hive around 1-3$ and I encouraged people to take profits), based on simple assumption that all that will happen there even at faster ratio as dcity had income tax, and whole process was delayed 3-4 years of decreasing inflation overtime to reach bottom inflation and maybe bounce up or stay there forever.
Possible it could also happen with any inflation, just price would be different, different range for price drop still 95%+ even if splinterlands would do 70% of airdrop, maybe different time range, dunno.
Possible you can observe same process in younger games I don't follow, they might have it all ahead of them, all depends from some settings.
Another thing is, even with mentioned by you mechanics claiming it holds price up. How much more money you are ready to spent than earn? Can you assume that players will spend more in game that they make in game. So they buy more tokens than they sell tokens. Hard to imagine.
Most of the time mentioned effect is temporary, quite often it's a trap, with temporary higher interest, temp higher rewards, or just temporary rewards, market situation etc.
Some of the other scenarios when it's reached:
With last one distributing rewards in non-game token like HIVE gives game advantage, much harder reach that, when all you get are game tokens endlessly losing value.
RE: New Citizens