880ec0c5833a2918d82fd73d029df6b076046f19
This is a new iteration of this previous proposal. Since it failed by a narrow margin, I have decided to try again and update a couple of the most contentious parts:
- Removed the listing UI fee component
- 2% now goes to burn instead of DAO
However, I have decided to leave the fee at 6%, which was the third most contentious issue. I believe this is a fair tradeoff for users and markets without impacting the status quo too much, while removing a large portion of circulating DECs permanently.
The Proposal
The main changes are listed below:
- Set market fee to a fixed 6% for all markets such as cards, rentals, assets, lands, and potentially SPS delegation markets in the future,
- A 2% portion of market fees will get burned and
- Remaining 4% will go to the market used to purchase the asset.
Major Impacts
- Increase of fees from 5% to 6% for sellers,
- Potentially less cashbacks for buyers depending on how third party markets handle this change,
- Decrease in third party market revenue from 5% to 4%,
- Decrease of circulating DECs,
- Fixed fee means bots can no longer list at 1% fee, all market users must list at 6%
Benefits
- 2% of all market transactions will be burned
- Decrease of circulating DEC supply will help the overall token prices of the Splinterlands ecosystem and help bring DEC back to peg, thus moving us closer to the "flywheel effect"
- Less DEC in circulation --> closer to peg --> closer to flywheel effect --> closer to burning SPS for DEC (ultimate goal) --> higher SPS value --> more utility and volume for assets --> more earnings for players and markets
- Listing fee under the standard rate (6%) is no longer accepted. For example, bot sellers will no longer be able to list at 1% fees
Potential Drawbacks
- A general decrease of funding going to market interfaces (including funds to the Splinterlands company)
- Sellers will see normal rates go from 5 to 6%
- Reduction of kickback to those who buy on sites that promise immediate revenue share on their purchases
Implementation
Upon discussion with @yabapmatt, he does not anticipate that implementing this proposal will require a large development effort. The specific rates could be changed by a proposal in the future with very little coding effort after the initial change.
My Personal Thoughts
I believe oversupply is currently the biggest issue plaguing Splinterlands. This can be corrected with an increased player base (more demand) or an overall reduction in supply. This proposal focuses on reducing the supply of circulating DECs, thus getting us closer to the "flywheel effect".
Based on the last 6 months of volume and average price of DEC found on the Peakmonsters’ Dashboard, this proposal could take out of circulation roughly 413.7 million DECs per year, representing just under 8% of the current DEC supply, which is over 1 million DECs per day. This is not even accounting for the lands, assets and rentals market, which I personally expect to pick up substantially once lands 1.5 is released. (Data accurate as of roughly 3rd of May).
Although this proposal alone may not bring Splinterlands to the moon, it is a long overdue modernization to the Splinterlands market structure which will assist in the long-term sustainability of the game’s economy. Marketplaces and card sellers may lose revenue in the short term, but stronger tokenomics supports token value which is ultimately the driving force for asset demand, utility and volume in the long run.
100% beneficiary of this post is @dec.burn
A new initiative where all rewards will be powered down and used to buy back DECs on the open market to burn. To learn more about how you can contribute, please read this introduction post.
EDIT: it seems I have forgotten to add a beneficiary, thanks to @zaku for pointing that out. All post rewards will be manually sent as HBD and liquid hive to @dec.burn upon payout.