While I was going through my old posts last weekend, I stumbled across an, at least to me, pretty entertaining article I wrote back in January of 2022 called Let's Talk Splinterlands - Implications Of A Bear Market. It was written during a rather interesting time of the cycle where it was already apparent that the bull run had ended but a lot of the Splinterlands assets were still hugely inflated. So I thought it would be a fun exercise to look back at my thoughts and expectations from that article and compare them with what actually happened last year while also making some new predictions for what 2023 could have in store for us.
Let's start with addressing the elephant in the room: Land. Man was I off with my expectations on land. I certainly wasn't alone with that, but I was firmly convinced that Splinterlands would release its land gameplay and even the Items&Spells update some time in 2022. It was not until late Spring that we learned that land wouldn't probably make it in 2022. The reasoning they gave back then is the same they give today. They decided that creating SPS was more important and that they willingly pushed land back because of that. While I can understand that decision (and it certainly earned me a lot of money) I'm still a little disheartened about the way they handled the whole issue. It's not even about the fact that they did push it back but more about how reluctant they were to admit that land won't happen any time soon.
So where are we in terms of land? We've yet to receive an updated roadmap, but for all we know a first playable version of land should be released some time in Fall/Winter of 2023 and we should be able to actually reveal our plots way earlier, maybe as soon as in the first quarter. Back in my old article, I speculated that land could very well be a game changer for Splinterlands. While it's not exactly what I meant back in the day, this still holds very true. The land expansion should eat up a ton of DEC, most likely way more DEC than is actually available in the market right now. While this should help to get the SPS flywheel going, we'll have to see how things play out in the short term as we'll be facing a bit of a dilemma:
The first playable phase of land will have resource production, it might even have NFT minting (we don't know about that yet) but it most definitely won't have usable Spells&Items. This part will be added some time later. This will lead to a situation where land holders will need a lot of DEC to develop their land but won't have the means to really gather that DEC from the market as they won't be able to properly sell their NFTs to non-land holders yet. So in the short term, this might lead to some land holders capitulating, thinking that they'd never be able to earn back the money needed to get things going. While I already own a whole region and then some, I'll closely monitor how those early days will be going. If there indeed is some capitulation I'll make sure to buy some extra as I'm certain market sentiment is going to change once Spells&Items actually become usable.
A topic I was a bit more spot on about was the matter of SPS. Back when I wrote the article it was still traded at about $0.1/SPS. While I thought it to be unlikely, I did speculate that SPS could drop another 80% and well, that was pretty accurate as the bleeding only recently stopped right at the $0.02/SPS mark. The reason I called the decline highly unlikely was because I expected SPS to have a lot more use cases by now. The main issue with SPS really is that it's given out like candy while there isn't terribly much to do with it. Looking at its recent volume, I still believe that the bleeding mostly only stopped because people stopped selling their SPS, feeling that it's either not worth their time or because, at least recently, they started to hope that it could rise a bit in the near future.
SPS desperately needs the DEC burning mechanic to kick in in order to find some stability. That's why I really like the DECB proposal. I don't think this first round is going to do terribly much, but it should help to remove some liquid DEC from the market and should also show that there's still some life left in the community, that there's still trust and hope for better times to come. If we successfully sell out that first 2B of DECB, we could see another round, hopefully removing enough liquid DEC from the system to help bring it closer to its peg. Once we get (and stay) there, SPS burning should slowly start. While that won't do much for its value initially, it should at least help to stop the bleeding and eventually make it a bit more scarce. I still feel like SPS has a long road ahead of it but if every thing works out right, we could see some light in 2024:
I did talk about it briefly in Mav-Chat the other day, but here's how I could see the future development for SPS: Once we get DEC to peg, which should hopefully be some time before Summer of 2023, the burning mechanism will slowly kick in, stopping people from actually selling their SPS and instead burning it for DEC whenever they need to make purchases from the market. In the short term this will only remove sell pressure from SPS and help to stabilize the price. Then, as we start to move into 2024, the SPS inflation will slowly go down (at a rate of 1% per month) while the amount of SPS burned should slowly pile up. As we approach the BTC halfing, interest in crypto should start to grow again, making more people interested in the space. If everything works out, we could be in a position to front run the broader bull market a bit in the Summer of 2024. Increased demand for SPS could hit a reduced supply and value should go up accordingly.
Right now, that's still mostly wishful thinking, but who knows, I do think it's a possibility at least.
There's one last thing I really found entertaining about my old article. While summing everything up, I called 2022 a "make or break"-year for Splinterlands. That's kinda funny because those are the exact same words I used to describe 2023 just recently. So looking back at that article really helps to put things into perspective. 2022 neither made nor broke our ecosystem, and I guess 2023 will be no different in that matter. Of course there's always the risk of everything going to Zero but frankly, I really don't think that's going to happen. There are a lot of positive catalysts right around the corner and even if they don't fix the economy short term, even if they again take longer than anticipated to deliver stuff, I'm pretty sure we'll still be around in a year, in two years, and hopefully even in five or ten years. This thing still has a shot at greatness and I intend to enjoy every step of the journey.
And that's all from me for today, thank you all for reading and see you next time!