In this week's Splinterlands announcement and the following town hall, there weren't all bad news, as people might be tempted to interpret things especially under the influence of their own state of the mind after a long a tiring bear market.
In this post I won't make any health references, but I would still like to bring to your attention something that Matt said in the town hall and which probably kind of escaped many, given the multitude of information.
And we are talking about a new staking option for SPS that is being designed for Land 2.0.
The flywheel effect seems to currently be the centerpiece of a well-functioning Splinterlands economy and quite difficult to be put in motion and especially maintained while demand is low during the bear market. Under these conditions, introducing new use cases for SPS is important, in my opinion.
We started by adding the staked SPS parameter that determines the amount of SPS rewards that can be won in ranked battles. But it seems it's not enough to stop SPS from falling.
I disagree that the full effort should be put into bringing DEC to peg, as some believe. We might reach that point and drop back below if demand is not there, as is the case during a bear market.
If we help the price of SPS too by having more use cases, that in turn grows the amount of SPS rewards in DEC worth, which can help push DEC to peg quicker too. In this case we will have two categories of users (or rather use cases). Those that will keep or amass more SPS for its use cases, and those who will amass more DEC for its use cases (often by selling liquid SPS rewards into DEC). The two categories of users are not necessarily distinct, but often there is a priority people will follow until they achieve their targets, then they might switch.
Having all or most boats row in the same direction toward DEC will continue to have a bleeding effect on SPS, without the guarantee that the flywheel effect will be reached and maintained while the market is not ready for that.
I can almost guarantee that some investors in crypto games will check the price evolution of the volatile token of the game to decide whether to invest in an established game or not. A low price may be considered a good entry point, but a never ending downtrend can scare many new investors away. That's why, in the bear market when demand is lacking, I believe new use cases for SPS are just as important as trying to bring DEC to peg.
We don't know much about Land 2.0 yet. We don't know where SPS would be staked and for what purpose, or how much SPS will be needed. But personally, if we have DEC staking as reference, to some degree, I believe the new staking option is needed.
At some point, FOMO will kick in for SPS... Can you believe we have only about 3 years until SPS inflation dries out completely? Unless the DAO decides differently. 2+ out of 5+ years gone already.