Going forward, the Splinterlands economy is arranged in such a way that most products should be priced in a fixed amount of DEC tokens with the goal of creating demand for DEC tokens and creating price stability for them. Any additional demand for DEC tokens above the target price goes directly to the SPS token through the burn mechanism.
Validator node licenses can currently be purchased with SPS tokens at the current market price and not DEC only because the license sale was launched before the SPS burn mechanism for DEC was live and available within the platform. Had the burn mechanism been live, licenses most likely would have been priced at a fixed amount of DEC for each tranche, so we feel that at this point it should be put to a vote of the SPS token holders whether or not to re-price the validator node licenses in DEC instead of SPS at the current market rate.
If this proposal were to pass, 80% of the DEC tokens spent to purchase licenses would be burned while the remaining 20% would go to the DAO which is the same as the current distribution of SPS tokens spent for licenses.
Generally, we feel that this would be an overall net positive change for the Splinterlands economy as it would provide a significant sink for the DEC token that would help it maintain its target value at which point it can help kickstart the flywheel effect of high DEC demand causing buying and burning of SPS tokens.
We also feel that it is typically a better player experience to have assets priced in fixed amounts of stable-valued tokens. Currently many players may be hesitant to purchase licenses while the SPS market price is low because they would have to spend a larger amount of tokens than they would if they wait and the price goes higher in the future.
Additionally, it may also lead to an increase in licenses being purchased by the community as DEC is currently trading at a significant discount to the target value on external markets.
It is important to keep in mind that validator node licenses are being sold by the DAO, and all purchases directly benefit the DAO (which is different than for other things like Chaos Legion packs), so it is generally beneficial for the entire community to try to increase sales as much as possible.
The concept of a product-backed stablecoin is quite unique and powerful, and we believe it can - by itself - provide a significant amount of value and attention to the Splinterlands ecosystem if we can make it work. To do so, we need to price as many products in DEC as we possibly can, which is why we are bringing this proposal to the community.
I think changes are good when you realized you made a mistake. However...
I don't think you made a mistake on either Nodes or Riftwatchers. They are set up in a way to create a flywheel effect when things go up. I believe you did it correctly the original way.
Just because the prices are down right now because:
doesn't mean you should abandon the great mechanism you already built. They were and ARE FANTASTIC.
Credibility is important and while I know people will vote on this, I hope you take the time to read the comments here on both these posts and in the Discord channels. People are upset and worried when it appears like they are being asked to "sacrifice for the greater good".
That's exactly what many of the RW buyers are thinking. That's what the node buyers are thinking.
As a large SPS holder, I am thinking this change is seriously diluting the impact of the flywheel that was one of the biggest reasons to buy and HODL SPS. I don't think of SPS as $0.10 or even $0.25, I think it could be worth $10, $20, or even $100 per token one day. But to do that, we need these flywheels where we essentially buy-back our stock. I thought it was genius at the time you did it, and I still think its genius today.
I will be open to what the Devs say on the next AMA, but please realize that many of us loved what you built with v1 of these 2 programs.
Yes I though the SPS tranche pricing system was brilliant!! It should definitely stay!
Well said! I have made my vote and this does sum up my reasons for the way I voted.
!PIZZA
the problem with the flywheel effect is that we currently have way too much inflation. One chance to actually fix this is by bringing the DEC price over its peg which would burn massive amounts of SPS.
The inflation is intentional and necessary, and is actually the planned token distribution. We're about halfway through distribution. Look ahead a few years to when there is ZERO new SPS being minted... the faster we get there the better off the economy will be.
Right now I'm definitely against this proposal because it significantly devalues Node Licenses and any players who bought Node Licenses packs previously (at least in this current tranche) will feel like they are being "punished" since they paid a much higher price.
Right now with SPS = $0.0562326, the $5000 Node Licenses cost 88916.394 SPS (market value of $5000).
Assuming that Tranche 2 Node Licenses will still be at $5000 and DEC will be honored at peg value ($0.001) rather than current market value ($0.0005433), that means it will cost 5 million DEC which is just $2716.50 in terms of market value. That means buying Node Licenses packs would be almost half off, which is a significant devaluation.
I might consider voting in favor of an amended proposal so that the price of Node Licenses is increased so that the market value of Tranche 2 is $5000 (so in this case it would be $9.2 million in DEC, so maybe double the cost but make it require DEC instead of SPS, and adjust later tranches appropriately as well).
My question is how many 'punishing' DEC buyers would there be, and how many licenses would be sold before the DEC discount got negated? At current DEC prices, that would be millions of dollars of DEC to sell out this tranche (if my math is correct)? I think a few people may get a DEC discount, but it may be worth considering ripping that bandaid off since license sales should continue on for a long time. Is the market cap for DEC on tribaldex correct ($1,705,163.11)? How many DEC discounts would people get before the price of DEC shot up? I suspect not a whole lot. How many people are waiting in the wings with 5.9 million DEC ready to pull the trigger on more licenses? 2.9 billion/5.9 million is 500 licenses. So just shy of 500 would sell if you spent the entire circulating supply of DEC on HE at current prices on licenses? Even with that I think you might get a few takers. Going down the DEC richlist, there are only 28 accounts that could spend 5.9 million, let alone 9.2 million.
As an aside, the last license on HE sold for $1582 (~50% of tranche one). There is currently one listed for $1770, so I'm not sure why anyone would want to pay DEC or SPS retail for them in the first place so long as people are selling them for significantly less. If you were going to list them at all for DEC, now would be the time to do it. You'd be lucky to get a buyer lol. I wouldn't make the same arguments when it comes to RW packs because they are a different animal, and I wouldn't even consider selling them for DEC until the impact of DEC license sales is felt. RW has much smaller delta between retail and the secondary market btw, which would be a good reason NOT to discount them on the retail side.
The cost of a validator is not $5000 for pretty much anyone that has bought them. And only 5 have been purchased in tranche 2 anyway... but in any case because of voucher prices it's $2621
I am a no on this as written. I bought 2 nodes with SPS. I don't like the idea of changing it after the fact. The only way I could vote yes on this is if you drop us 1 free license for every 2 we own or pay us back half the SPS we spent.
This is pretty much what I think about this proposal ... sorry mate.
I can't stop laughing.
Nice job on the meme.
what is the purpose of this proposal? to sell Nodes? or Increase DEC price? i think this
would make better sense once DEC has proven itself to be a more stable, stableish coin. Let’s let things settle a bit before we start big proposal changes to the economy. There have ben a lot of shiny things to distract all of us in many directions. I would like to hear from Matt on his thoughts on what this may do to the ecosystem.
the whole point of this is to make DEC more stable
I am not even a node licence owner, but I think it is a horrible idea.
Jumping from a fixed USD price to a fixed number of tokens is like changing the fundamentals of the asset, making the project very inconsistent and uncertain. And investors just HATE uncertainty...
Changing from a USD value of SPS to DEC should not being a big deal, as a lot of people in the comments say so, but it is completely useless at stabilizing DEC price to its peg.
Personally, I do not mind an under peg DEC, it brings benefits for accumulation and that's what bear market is for!
So please leave leave DEC and SPS in peace, they will rise in due time!
did you guys think this through and really ended up thinking "oh this is a good idea"?
Why does SPL keep on making changes AFTER SALES? You did this on RW presale. You got a bit of an excuse there because of the tech issues. I mean, not really an excuse tbh, since you messed that up.
But anyway, there is NO ISSUE with the node sale so why make changes?
If you really want to make it on DEC then price it based on the real-time DEC price.
If your issue is the slow sales, then how about make the validators go live quickly, or maybe add some more value/utility/sink to SPS so that the price increases, and the people who've been hoarding SPS may consider letting some go to buy nodes.
This is a good idea going forward for future products, but to change it now is spitting in the face of early buyers.
This is a great IGN, my favorite strain!
Get DEC to peg first, then discuss.
edit: i may change my mind :)
the way to get it to peg is by pricing SPL assets in DEC.. so seems like a good idea overall
Who's coming up with such ridiculous proposals? Node Validators were supposed to be a SPS sink and take years to sell through. Tier SPS pricing was set up so earlier investors were rewarded for their leap of faith. Now this...I am totally against this proposal. What is the point in buying early if we get the shaft thereafter. Insane, unfair and simply bad business practice. How much weed one has to smoke to come up with this?
The idea is to bring DEC to and over its peg which would burn massive amount of SPS
This is a slap in the face of anyone who bought Licenses with SPS. The whole point of the pricing of validators in SPS was so they wouldn't sell until SPS was at a price to warrant the cost. Doing this now puts the price of a license below what they were sold for in pre-sale. If this is truly something that is needed it shouldn't go into effect until DEC is back at peg. We don't need to rush DEC going back to peg. We're in a bear market which means everything is low and it should be during a bear market.
I've invested my money in SL based on how thing get laid out initially the consent changes like this completely devalues what I've already purchased. My 2 node will worth so much less.
Strongly disagree with this proposal.
Can t change the rules after people have bought in...
While you may not want this change...
The whole concept of Splinterlands moving to a voting DAO system is that the community (via stake holders) is going to be able to vote to see what things make or may not be changed.
i certainly hope it is controlled / regulated in some way. ie As a citizen of Australia, i cant simply pay a small fee and make everyone go to the voting booths every 5 minutes 😄
edit: Eventually people will vote without even reading the proposal just to get rid of the pop up tag, need a large 'NON VOTE' Button.
Actually would support a Veto Button
Instead of a Yes No, the Veto can basically push the task off the table
Make it be looked at again by Sober minds like a Senate
ahh 'VETO' that's the word for it! 😀
thanks to this post, LICENSE price starts to fall
can't wait till they really change to DEC purchase, everyone will have a chance to get LICENSE NODE, KRILLS will challenge WHALES
What a genuine genius idea to beat whales who already made many License purchases
So in the TH today you said you wanted to cut voucher production and now you also want to devalue the nodes already sold? I dont even have a node yet but I feel for the folks that do and if I got one in this current Tranche (only like 5) id be super pissed
Did they really say they wanted to cut voucher production? What the heck if this is true?
They can make vouchers be anything they want them to be used for, just simply devaluing them is a lazy way of trying to bring them into parity. I have an idea (and I know many others do too) about what vouchers can be used for that will create a lot of demand. But instead of seeking ways to find more uses, instead we are just cutting the production level?
Who said this @aggroed or @yabapmatt ... I'd like to find out what they are thinking? And also why they aren't reaching out to the community for ideas instead of waving the white flag of retreat on this and the other 2 proposals.
It was during the TH today and Aggy said it. I hope they wave the white flag on these proposals, I hate leading revolts
ok I will discuss it with him, thank you for the information.
And btw, I know exactly how you feel. I hate being negative or giving the impression that I'm not happy with the game. Overall I love this community and what they've done for people, but I feel they need to hear our thoughts (even if they are negative). Its the best way to improve things if something is wrong, because people that care will tell the truth.
Side note: I liked the idea of vouchers being used to purchase a common promo card that users get to create. Nothing OP, just a fun/interesting voucher sync.
IF they can get DEC back up and it costs the same amount or more why would us node holders be upset? Yes if it costs when buying with DEC AND it doesn't impact DEC price very much at all then i guess we'd have issues.
For example if they made the price a flat 5m dec per node I can't think why any node owners would have an issue it would cost $2700 for a node... even the 5 node buyers in tranche 2 didn't spend that much. And the other 5000 buyers all spent like $1600 or less.
Jarvie, I will answer part of your question.
Because node holders get SPS and that SPS would be worth more and more as it went up. This rising of SPS would partially occur (or be aided by) the mechanism of buying the nodes in SPS. A lot of SPS is consumed by both nodes and RW.
In other words the nodes will sell when the SPS rises. SPS rises as more nodes are sold. Its a flywheel that Matt discussed correctly.
When you remove SPS and use DEC instead (a stable coin that is capped) to make the node purchase, then you are burning DEC and not SPS. While that in theory "could be" the same thing, there's absolutely no assurance that it will be. DEC held by the SPL business could be used up first for instance. NOTE: of course that would be their right to do, its just not what people THOUGHT was going to be the use of funds for purchasing nodes.
So removal of the direct flywheel mechanism using SPS for purchase removes a big guaranteed consumption of SPS in the future.
The only argument I could see for scrapping this mechanism is they feel that people will never pay the prices the nodes are listed for otherwise. If this is the case, I'd rather them be honest with us, tell us what changed to make them think nodes are now overvalued and won't sell in SPS, and then we as a community can discuss.
My point is they can't have it both ways. If they overpriced the Nodes, then we should have an open and honest conversation. If they didn't overprice nodes, then it works perfectly fine the way its structured. Using nodes or Riftwatchers (or cutting the amount of vouchers) to prop up DEC values, does nothing but artificially cover up the fact that DEC is down.
DEC's down for a reason and I can list some of those reasons (as can others), but the issue should be dealt with by creating more demand by bringing in and retaining more players. These artificial mechanisms only confuse and obfuscate the real issues. In my opinion, if they use their time and energy to grow the game, then all of these tweaks and twists/turns become irrelevant. And everyone would feel more confident.
simple things like changing season rewards to SPS and lowering DEC pool inflation could help.
Thats a huge IF and IMO it would make nodes cheaper on the secondary market almost immediately. Can we also talk about how Bulldog posts about the DEC price the day before 2 huge sinks are proposed? or him buying tons of vouchers before they announce that all RW packs will need one? What about when he scooped up all the blast fire monsters before Jacek stats were wildly known? Lots of fishy stuff going on and I think we want things explained in baby words. ALSO WHY WASNT ANY OF THIS ON THE TH that ended 30 mins early?
I Agree with you hewitt. This proposal is gambling with our assets in the hope that something will happen. We already have examples currently out in CL and TD packs that were supposed to encourage DEC back to peg but are not working. The same is going to happen to licenses. If they pegged it to a fixed USD value that can be payable in DEC then that is better, but to fix it to a certain number of DEC does not make sense.
I mean...if CL and TD failed to bring DEC to peg, then...
"maybe 3rd time's the charm" - SPL Team
Are vouchers + DEC an option?
Also have you indicated a fixed amount of DEC? 5m?
As an example for tranche 2
Would it be 2.5m DEC + 500 vouchers
or
5m DEC only
The present effective cost is $2621 (considering cost of 500 vouchers)
If it's 2.5m + 500 then the effective cost right now would be ~$1470 per license
If it's 5m flat then the cost is ~$2700
Then of course more DEC goes out of circulation and it keeps going up in cost for that flat 5m.
Only 5 nodes have been sold in tranche 2 so this is actually great timing to do something IF voters decide to.
I would support this proposal because giving more use cases to DEC is more important than the implied market value of the underlying assets.
This is a great idea!
In generally I am favour of that move to price nodes in DEC but only if the price is adjusted somehow to match the $5000 for Tranche 2, without any massive benefit for an undervalued DEC price. It would be really unfair to those who spent lots and lots of SPS to get those expensive nodes priced in SPS. As the proposal is right now, current node holders would be somewhat punished for getting in early as we all aped in with different conditions in mind. Plus, the price of SPS has suffered more than the price of DEC since nodes launched.
I am not sure how to achieve a fairer way though. Community, put your thinking hats on.
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Days like this I am glad we have a SPS-DEC pool pair whatever way this blows
This is a great idea for tranche 3
Felt like being slapped across the face for buying RW packs in the first place...
fixed amount of DEC makes sense for future sales. For this current tranche, make it cost $5000 worth of DEC with up to 500 vouchers.
This is preserve what node license buyers paid, burn DEC and hopefully DEC will be at peg by the next tranche.
DEC needs to stay a card market token and not a pack token. Why are you trying to depreciate the value of SPS?
I gifted $PIZZA slices here:
@vimukthi(1/5) tipped @davemccoy (x1)
Join us in Discord!
EVERYONE HERE WHO OPPOSES THIS PROPOSAL NEEDS TO GO VOTE IT DOWN IN THE DISCORD SO IT DOES NOT EVEN PROGRESS TO THE OFFICIAL PRE PROPOSAL STAGE.
Lots of people chiming in here but VERY few votes in the discord!! Go vote!!