Is The SPS Flywheel Cranking? | Splinterlands #436

The Conclave Arcana presale has been going for just over a week, and the numbers are looking solid, but the question I want to answer in this week's post is whether this presale could kickstart the SPS flywheel. Let us dive in and explore what is happening.

What Is the SPS Flywheel?

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The SPS flywheel is an economic engine designed to boost and stabilize the splinterlands' in-game economy. It involves two main currencies:

• DEC (Dark Energy Crystals): A currency pegged to the U.S. dollar, where 1000 DEC should equal $1. Players use it to buy packs, land, and other in-game items.
• SPS (Splintershards): The game's governance token, which players can earn, stake, or burn to create DEC.

Here is how the flywheel works in simple steps:

1. When players buy things like Conclave Arcana packs, DEC gets burned, reducing its supply.
2. With less DEC available, its price moves closer to the $1 peg (1000 DEC = $1).
3. Once DEC hits its peg, players can burn SPS to mint new DEC, shrinking the SPS supply.
4. Less SPS in circulation could drive its price up, making rewards more valuable.
5. Higher rewards attract more players, who spend more DEC, keeping the flywheel spinning.

The Conclave Arcana presale is another test of this system. Following the Conclave Arcana presale on Twitter/X, players are already spending millions of DEC, and that could set the flywheel in motion.

Presale Numbers

The Conclave Arcana presale is off to a solid start. As of the latest update, players have spent 967,728,000 DEC and Credits on packs. Here is the breakdown:

• Standard Packs: 83712 sold (16.7% of 500k available)
• Alchemy Packs: 36796 sold (36.8% of 100k available)
• Legendary Packs: 7972 sold (15.9% of 50k available)

That totals to 121467 packs sold, up from 915,340,000 DEC and Credits reported in my SPS technical analysis blog a few days ago. Every pack purchase burns DEC, and if this trend holds, it is a promising sign for the flywheel.

Will the Flywheel Take Off?

Can the SPS flywheel finally work? Prior to Land 1.5 and 1.75, we thought it would happen and there were moments but did not sustain. With Conclave Arcana there is potential, but it is not a sure thing. Let us look at both sides.

Firstly, on the positives, a million dollars' worth of DEC and Credits spent in days proves players are getting involved in the Conclave Arcana presale. Secondly, we have seen DEC steadily increasing back to its $1 peg. Lastly on the positives, despite there being a sustain bear market for most of 2022 to 2024, splinterlands has a dedicated community ready to support it. On the contrary side and it is an obvious fact that splinterlands needs players, players, players to make this all sustainable. The daily average signups for splinterlands have remained flat and for any of this flywheel effect or the positives from the Conclave Arcana presale to be sustainable, we need to see new players joining the game.

Will It Happen?

It is too early to tell if we will finally see the SPS flywheel in full effect. The presale is promising, and DEC is trending up, but splinterlands has hurdles to clear. If it does happen, we will see in-game assets rise and become sought after again like we had in the 2021 Crypto NFT bull run, and more rewards being attractive to players which will spark that euphoria and interest in the game as we saw four years ago.

Concluding Thoughts

The Conclave Arcana set presale has been live for just under a week and the splinterlands community is getting involved with just under $1m spent in DEC and credits. Also, we are seeing DEC climbing back towards and the flywheel may be starting to crank. The question we all want to know -- will it spin?

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