Splinterlands | My GLX Airdrop Strategy & More

After reaching my goal of having 100k SPS staked in Splinterlands last week (Link), It's now time to make a clear plan for the GLX airdrop also sharing some thoughts on the Splinterlands downsizing.

GLX 365 Day Airdrop

The GLX airdrop was one of the main reasons to buy more SPS to reach my goal sooner and right now at the rate that I'm receiving these tokens at the price they are trading at it is very much worth it. I also believe this is the main reason why the SPS price is holding up quite well despite the news of Splinterlands laying off 45% of their employees in order to survive the Bear Market.

The Maximum Supply of GLX will be 2 Billion and 5% of that (100 Million) will be airdropped to SPS holders during the first year. There are also staking rewards the first 12 months of in total another 100 Million Tokens which adds to the rewards of those that don't dump their tokens.

My GLX Strategy

The way that these airdrops always work is in a linear way which makes it so that at the start there are not that many tokens available while the rewards for staking them are fixed daily making it so that there are crazy returns. This results in people wanting to buy them just to quickly get more of them but as the number of tokens that are staked each day quickly increases, the returns go down which reduces the buying power pushing down the price.

The big question is if you want to gamble on the fact that the compounding of tokens beats the inevitable decline in price.

Personally, I always try to just look at the market cap at the supply that totally will be available one day. For SPS, this is 3 Billion which comes at a fully diluted market cap of 120 Million right now not counting all the burned SPS now already and in the future. This is for a finished product that many players actually enjoy and are passionate about with ongoing development that has shown to be able to bring in quite some revenue.

For Genesis League Sports there is basically only an idea and copy-paste tokenomics so far, yet the fully diluted market cap based on the current 0.256$ price is supposed to be 500 Million+

So basically I see this token as extremely overvalued right now with the only reason players are buying it is to get more tokens from the staking reward mistaking this for real yield. Personally, I staked the 1000 GLX that I have gotten since the time the airdrop went live up to the point the staking started and am just selling each morning and evening what I have gotten for Hive.

So far, this had added up to 647 Hive in just a week which is worth around 223$ right now giving really nice returns so far lowering my overall risk on the SPS investment. My estimation is that over the course of the coming months GLX will drop somewhere in value between 80% and 95%. In the end, there needs to continue to come in money that buys these tokens for the price not to crash while many now who are chasing the yield at some point will all at once want to sell to lock in profit which likely won't be possible at that point.

If the price of GLX does come down with 95%+, I likely will buy back the tokens that I sold and more if that makes sense at that time.

Genesis League Sports Expectations

I'm personally not yet getting very warm on the entire Genesis League Sports / Genesis League Goals / Genesis League Soccer idea. I basically see it as a copy-paste of Splinterlands with some different dynamics and visuals all at a premium price and no guarantee that it will be a wide success. Fact remains that these types of Pay2Win games turn out to be crazy expensive with a minority actually earning money from them as investors and the bills need to be paid. In order to do well, you either need to get in as an early investor at the most favorable rates and take profit along the way to first recover your initial investment or have a game that is totally under the radar without a valuation of half a billion before there even is a game made.

Splinterlands Layoffs

The way I look at the situation is that Matt & Aggy simply overhired when things went well in order to maximize the opportunity to grow while it presented itself. It's pretty much the same what happened with the high print rate of packs and reward cards and it is understandable that it was done and a good thing that they are cutting back since 140+ Employees was just crazy high. A Similar thing happened with Mobile MiniGames who were too optimistic in their actions during the bull market which now somewhat is backfiring (See Post How & Why The MoMi Economy is Collapsing)

Before, Splinterlands was also in a situation where all the profit went to the company while rewards were pulled out of thin air. With the creation of SPS this changed as part of this profit needs to flow to SPS token holders which so far has not been easy seeing what the price of vouchers is doing. Purely aside from the actual game, It's a bit of a cycle where more assets are created in order to keep previous assets valuable. There are Cards, DEC, SPT, Land, SPS, Vouchers, Runis, Nodes, ... and now GLX. The most healthy way over time would be that there is lots of trading going on creating revenue from the fees attached to it which keeps things going in a way where there are just way smaller returns

In the end even with an enjoyable game that players want to play aside from the earnings, it's always a matter of having enough new players coming in to hold up the prices. The bear market now is making that hard but there should be enough room still for another Adoption Cycle with the game that they have so I'm still quite optimistic long term.

Conclusion

I see GLX right now as crazy overvalued and am taking daily profit getting some actual returns on previous money and time investments. The Splinterlands layoffs were needed as they overhired based on optimistic assumptions and I don't expect there to be many problems going forward for the game aside maybe continued falling prices. The Splinterlands game itself is legit and I see more players coming in over time.

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