Step right up and ride the monster rollercoaster called Crypto!
We soar to new heights and we plunge to unbelievable lows. Bitcoin was once not enough to buy pizza and beer. Now, I own !Pizza and !BEER crypto!
In crypto, it's difficult to know what will be the crypto that takes us TO THE MOON.
-- Hint, it's not LUNA. I started investing in crypto 6 months ago, and specifically HIVE. The reason why is because of #Splinterlands,Bold which runs on the Hive Blockchain.
Splinterlands is a play to earn game enjoyed worldwide. The original currency for Splinterlands is Dark Energy Crystals. Which brings us to today's discussion about the peg for DEC. I think of a peg as the base price for a currency. Most crypto does not have a basis point. Bitcoin doesn't have one. The value is established by the demand of others for the coin.
For many people, the peg for DEC is $0.001. I never knew why, until I listened to @bulldog1205 His video is worth watching, here's the LINK. The peg was established and somewhat stabilized due to the original price of packs, which could be purchased for $2 or 2,000 DEC, and now Chaos packs can be purchased for $4 or 4,000 DEC; and by adjusting the amount of DEC distributed in the daily reward pool to keep DEC pegged to $0.001.
So if there are levers in place to keep DEC from fluctuating too far from $0.001, why did we see the chart below with DEC swinging from $0.004 as a high to $0.0008 as a low?
Coinmarketcap.com chart
First, a free market doesn't pay attention to levers. Chaos packs dropped in value and can be purchased on Tribaldex (secondary market) for about 45% less than the 4,000 DEC price on Splinterlands. Which in theory, should have made DEC decline to about 45% below the peg. But that didn't happen, at least not yet.
Second, adjusting the reward pool of DEC on a daily basis doesn't filter down to the trading market very well. Players hold the DEC or sell DEC in big chunks, so a daily adjustment in the new DEC released has little impact on the daily value of DEC.
Surprisingly, another development caused DEC to spike to 4 times the recognized peg. Splinterlands introduced SPS as a future currency for Splinterlands. Holding DEC generates air drops in SPS, at least for the next 70 days, and people purchased DEC in droves to hold in order to receive more SPS.
So is there a true peg for DEC? I say there is and it's 0.0005, which is 50% of the recognized peg of 0.001. And as a side note, I commend Splinterlands for creating an economy where a basis is established, and that value is the playing CARDS! Splinterlands is a game where the cards are NFTs, which are owned by the players. Cards are purchased or rented with DEC and the cards can be burned (converted) to DEC when destroyed.
Screenshot from @peakmonsters, the best place to buy rent and track Splinterland cards
Each card has an established amount of collection power. The card above, Pelacor Deceiver, has 5 collection power. If the card is burned, the player receives 5 DEC. With a burn value of 1 DEC to one Collection Power, the peg for DEC is actually $0.0005, instead of $0.001.
That said, I doubt we ever see DEC on an open market drop to $0.0005. In fact $0.0008 may be the closest we ever see. The reason is that people want cards. People pay more than the collection power for cards because cards can be used to earn game rewards, including DEC and more cards. The intrinsic value of card is more than the face value of $0.0005. I call that earning power. Cards can work and earn more than what can be generated by burning (converting) the card to DEC.
And guess what those cards may be worth a lot more in the future. If you have a chance, check out the comments on @bulldog1205 post that I referenced above. He outlines the reasons why cards will increase in value soon, and why stacking DEC is still a great idea.
Thanks for reading the post. Feel free to comment and let me know where I am wrong or right.