Good day my Splinterlands fam! I'm here to brighten your day with some bullish math and a Can-Do attitude :D You might continue reading this post and ask yourself, "If this is working for profit why would he want more people doing it?". That my friends, is where the bullish territory lives. Follow me here and I'll try to explain.
WARNING It will be long winded... There are alot of moving parts. I'll talk about a saftey net with card burn rates, DEC/USD card price, and DEC peg... All while avoiding potential upside on card price action.
Things to know going in -CREDITS=$0.001 always, are not any form of cryptocurrentcy, and mostly used to move USD into Splinterlands/Hive.
-DEC is pegged to $0.001, but is a cryptocurrentcy. It trades peer to peer at a fluctuating price, but has built-in systems to always put pressure on price in the direction of its peg. It currently trades under peg, with Splinterlands team already confirming the (active) push for DEC returning to peg.
-Splinterlands NFT cards can be bought in CREDITS or DEC. They trade peer-peer for DEC. Each card can also be burned (aka deleted from the blockchain) for a set amount of DEC.
Splinterlands NFT cards can be rented out to players for DEC. Rentals can be handled by a bot, so the income side of things is a 0-time investment. There are multipule services running currently that provide the bot for a small but fair % of earned income.
So...
I've been at this for abit. I have hit a point where burning reward cards I've bought in the past is now profitable, giving proof of concept. So I decided to make a post as its still a thing. As you can see I am STILL buying up cards with one important stat. That is PRICE ABOVE BURN RATIO found using peakmonsters.com. Using this we can track how much DEC we need to get back from a card before BURNING THE CARD BECOMES PROFITABLE. Here is an example of some I've just bought to do this with.
I have bought up these reward card that alot of people discard or overlook. I nabbed them for a very small amount above what they can be burned for. Anyone can burn a rare reward card for 20DEC at any given time. I've paid roughly 21.5 DEC or less for ALOT of cards. That means I only need to recoup ~1.5DEC before BURNING these cards leaves me in profit. That is less then 10% of cost. By renting my new stack of cards I can average around 30%RoA/year. This leaves ~4 months of renting to get back 10% of cost, thus allowing me to BURN the cards and see profits.
Don't beleive me? Go take a look at the market. I've actually lowballed alot of my numbers to stress test this saftey net. Funny thing is, doing this leaves profit by BURNING the cards, in a bear market. Sounds sub-optimal right? What we really did was create an ABSOLUTE FLOOR that is in profit.
THIS WHOLE BET WAS MADE WHILE DISREGARDING ANY POTENTIAL UPSIDE BABY! So far I've covered worst case bear market math and just how limited our down side is. That alone was enough for me to take the bet. Still though, over the next 3-6 months CL might sell out. These reward cards might cycle. Market sentiment could change. I really am a true pessimist at heart... but even I think there is a valid chance these cards will be valued higher then they are priced at right now. WE DON'T NEED THEM TO BE, as we have already proven we can see our profits by BURNING. If they do happen to go up, then I guess we can just sell them instead for extra unknown profit!
Seems cool right? I'M GO DEEPER BABY!
PART 2
This can be taken a step futher while DEC is below peg, but its gonna cost you some cold hard USD. For the record, I have been doing this and will already see profits if I burn cards bought 1-3 weeks ago.
With cards selling so darn close to burn value, coupled with DEC being below peg, some cool numbers started showing up. There are cards where the ratio of DEC/PEG differential and Price above burn ratio lets you buy below burn value (assuming DEC gets to peg in the future). We are talking about buying say 3000 CP (that can be burned for 3000DEC) for 2600-2800 CREDITS. Meaning when DEC gets to peg, you can burn the cards for INSTANT PROFITS, NO RENTING!
The Bullish territory lies when alot of people figure this out and start burning cards to see profits. This could impact supply by a good chunk, as its a super fast way to see profits when dealing in bulk
So, if your a real degen like myself, you can currently take a minimal risk bet with substantial upside! You can bet on DEC going to peg by buying up cards that are below the pegged burn value with credits. While waiting for a profitable DEC price to burn at, you can rent for roughly ~30% RoA. You also have the choice to hold the cards, tagging along for extra profit if card value goes up. The longer you wait and rent the cards the more income you get too, increasing total profits (or subsidizing any losses). WIN WIN WIN BABY!
You can only lose if DEC loses value instead of going to peg... and even then DEC would have to lose more value then then your rental income could subsidize... I did say this was a bet after all!
CHEERS AND GOOD LUCK! YOU CAN DONATE TO MY BROKE BEHIND @initiate1 IF YOU ENJOYED THE READ, MUCH LOVE