The new Splinterlands proposal to start burning 25,000 packs a day or until sold out, is an interesting one, as at least at first glance, it changes a couple of economic dynamics, as well as has the potential to alter behavior of players and investors.
Firstly, for a little background though, out of the initial 15M packs, there are still 4.7M left unsold, even though they have also been distributed as rewards, though I am unsure how many of the total have been "sold" this way. The burn would start December 1st until March 31st, with the 25,000 packs burned daily, added to the "sold" total. The card values have dropped significantly since release, which aligns with the bearish market trend of crypto as a whole.
The difference is that the packs bought in game add to the airdrop of ew cards, but the secondary market bought packs do not. This is something that might get interesting, but I will get to that later.
Since I am a Negative Nancy, I will start with some of the initial cons I see, which aren't necessarily all bad, but you know - gotta start somewhere.
Cards are needed for Land
This might take a lot of the cards off the market and will leave people short come land staking release. However, this can drive a bit of FOMO and, according to most, it is unlikely that land can be fully packed with maxed cards straight up anyway. But burning them now, means that the team might not be expecting staking on Land any time soon.
It makes demand for Splinterlands look weak
And the impression of weak demand can make people think twice about investing. While the current demand of Chaos Legion is relatively weak, the demand for Splinterlands itself is quite strong, especially considering that there have been other releases that have soaked up a lot of investor money, including the release of Riftwatchers (so far 850K sold - 500K gone in just over a minute), Runi (2000 spot whitelist sold in 1.5 minutes) and the release of Tower Defense (No idea, but it raked in millions).
Done to appease the masses
The masses make Splinterlands and it is good that they are putting the proposal system to use, but it is also good to remember that most people are not business people, and Splinterlands is a business. Sure, some of them have a lot of assets worth a lot of money that could make them appear wealthy and knowledgeable investors, but it is also good to note that a lot of early players didn't put that much directly into the game and what they have put in since, is derived from what they got cheap or even for free.
Engage panic mode
This can also look like a panic move, where due to them not selling fast enough or the decline in market prices on cards, they are looking to prop up the economy by creating more scarcity, which to do so, goes back on their advertised release. This might make people happy as card prices increase, but it also demonstrates a certain amount of indecision from the Team about the best course of action for the game, market and community. Leave it up to the community to decide and if it goes wrong, we are not culpable.
Gets them out of the way
While this wouldn't technically mean "selling out", it will appear that was and perhaps even be remembered by many that way, as it is added to the total sales. It is a bit of a trick with numbers, but memories fade.
Deadlines cause FOMO
Putting a time limit on the print will mean that people have more incentive to get in before that point, or miss out entirely. Runi will have a similar time limit mechanism, meaning that out of the possible 6500, any unsold ones after 30 days of go-live, will be burned. This means that you can wait until the 11th hour, but not past the twelfth. When there is no time limit, there is "always tomorrow".
Earlier Airdrops of the "bonus" cards
This will be welcome, as at the rate it feels like the drops are coming, people are losing interest, especially as more releases have happened since. However, this also raises some interesting questions as to what number of packs are required for the drop, as essentially, the ones that are burned won't attract airdrops. This means that even if the amount of packs needed to qualify stays the same (I think it was 550 last time), there will be up to 4.7M packs less drawing on them. This means that the expected scarcity will increase, the more packs that are burned.
Scarcity increases value
Let's face it, people want an ROI, not be left holding bags. Scarcity can lead to that return in value, even if it can be short-sighted and cause other issues down the road. However, similarly to during the crypto bullrun in 2021, sharp increases in value generate hype and could attract more attention to Splinterlands. Though, I don't think that even if all CL were burned today, it would make much difference in the current market.
Almost fixed release of Rebellion
Rebellion will not be released within three months of the end of the burn, but this also indicates that they are ready to release very close to that point, which means that there is around 8 months until Rebellion will be released and people will have a chance to prepare for it.
I don't know, but I guess it depends on where they stand with their investment now. For example, I have a full Chaos Legion deck and 4100 cards bought in-game, so will get at least most of the cards required for a max that I need to play in diamond and above. But, if the future summoners are going to be scarcer, it also means that buying the extras I need will be more expensive. It also means that they won't be getting released through pack sales, so even the ones that are releases in the first millions, will be that much more scarce.
For the investors who are speculating on future price, burning is of course good as it increases scarcity, but will they extend their position? Will those with purchase counts close to the cusp of getting an additional summoner buy a few more packs, considering that summoners will be scarcer? And if these legendary summoners are scarcer, what will that mean for when Land is finally able to absorb cards through staking - as summoners are going to be at a premium?
With all of the pack sales and burn questions, the biggest factor that needs to be considered is the release of land for staking, but that doesn't seem to have a clear timeline yet. If there is one thing that is going to drive scarcity and FOMO, it is that and at that point, it would be clear whether or not there were too many Chaos Legion packs. However, I don't think the number of Rebellion packs has been announced yet, so that means, they can always add a few million into that release to make up for it, but that is obviously not an ideal solution either.
Anyway, I will likely vote yes on the proposal as despite the cons, it is probably better to have an end date to finish this release once and for all, rather than letting it drag. People still will have five full months from now to get CL packs if they choose and when the cut-off comes, no one can really complain they didn't have the opportunity.
What are you seeing as the pros and cons?
Taraz
[ Gen1: Hive ]
