Objective: The experiment aims to permanently remove SPS tokens from circulation, creating deflationary pressure to potentially increase their value by reducing supply, while also exploring the economic dynamics of the Splinterlands ecosystem.
Process:
Burning SPS for DEC: In the Splinterlands game, players can burn SPS tokens (a governance and utility token) to receive DEC (an in-game currency). The conversion rate, as noted in a recent X post, is approximately 1 SPS ≈ 9.55 DEC, with a reduced burn fee of 0.5% (down from 2.5%). This incentivizes burning by making it more cost-effective.
Swapping DEC for SPS: The DEC obtained is then swapped back into SPS tokens using liquidity pools on the Hive blockchain (e.g., via Hiveblocks). This step leverages market dynamics to reacquire SPS at potentially favorable rates.
Repeat the Cycle: The newly acquired SPS tokens are burned again to obtain more DEC, and the process repeats. Each cycle removes a portion of SPS from circulation, as burned tokens are sent to an inaccessible burn address, permanently reducing the total supply.
In this video, I started with 5,389.30 SPS got 7250 SPS sent to me. We burned a total of 260,516.21 and minted into the wild 2,505,640.90 DEC. I still had 30,306.04 DEC to do the next buy but I ran out of time. There will be a part two video. I will add the HBD I get for this post into the next video. I will see what we can get that total up to.
