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Understanding Splinterlands tokenomics: DEC Capture Rate, Dynamic Reward Pool and SPS Airdrop.

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This article is intended to help those who are not yet familiar with Splinterlands DEC tokenomics. If you’re already familiar of the topic, I would still appreciate if you read it. I would love to read more information that I may have missed. :)

DEC Capture Rate

If you’ve been playing Spinterlands, I am sure that you’ve noticed that the Capture Rate affects your DEC reward. The higher your DEC Capture Rate is, the higher your DEC reward and vice-versa.

The DEC reward you earn at 90% DEC Capture Rate is 10% lower as compared when it is at 100%.

And every time you battle, win or lose, you also lose 1% of your DEC Capture Rate. It is important to note that this 1% is from your current capture rate not on its max value.

For an example, your DEC Capture Rate will be reduced from 100% to 90.4382075% after 10 battles and not 90%. Kindly refer to the table below for better understanding - a 25 battle capture rate reduction and recharge rate.

Also, your capture rate is being recharged by 1% every hour. That’s why many players suggest playing 24-25 battles per day. Your capture rate will then be fully charged the next day where you can do 24-25 battles again.

What this basically mean is, the more you play the less rewards you get.

If you’re not familiar with the purpose why it’s in place then I am sure you think it is counter intuitive. After all, how would you encourage more players to play your game with such system?

The Law of Supply and Demand

The DEC capture rate, and similar mechanisms, have something to do with the law of supply and demand.

The more DEC are printed, the lower its value becomes.

The DEC Capture Rate is a safety mechanism that aims to prevent massive price drop of DEC. It does this by limiting how much each account can earn per day. Thus, preventing the saturation of the market.

Splinterlands is not the only one having such mechanism in place. Axie Infinity have their energy limit. Gods Unchained also limits how much flux you can earn daily.

Imagine if no such mechanism is in place. There would be little to no use of holding DEC as it decline its market value rapidly.

Bots will be of great advantage here as they can battle 24/7. They never tire nor get bored. They can amass large amounts of DEC in an hour or less what takes players a whole day to earn. This will, in effect, encourage the use of more bots.

Dynamic DEC Reward Pool

Aside from the DEC Capture Rate, I heard from @achim03 the existence of a mechanism. You can check this on his post.

I don't know its proper term so I would call it the Dynamic DEC Reward Pool. :)

What this mechanism does is adjust the amount of DEC battle reward depending on the price of DEC. When the price of DEC goes down it prints less DEC rewards. When the price goes up, it prints more DEC rewards.

This mechanism has similar purpose to that of to the DEC Capture Rate. It also attempts to stabilize the price of DEC.

SPS Airdrop Points

Another strategy of Splinterlands team to give more value to the DEC token is to equate 1 DEC to 1 SPS Airdrop point.

This encourages players and investors to buy and hold DEC for longer time. In effect, it further increases the market price of the DEC token or, at least, stabilize it.

Chaos Legion Booster Packs: DEC @ 0.001 USD

I can’t remember where I read that DEC was originally pegged to 0.001 USD. But, market price fluctuates that’s why DEC price is currently above 0.001 USD.

Recently, the Splinterlands team made an announcement that the chaos legion booster packs will be sold for 4,000 DEC each. Their post can be found here.

This is a move to set the minimum price of DEC to 0.001 USD. This is a way to stabilize the value of DEC after the SPS Airdrop ends.

This will encourage large amount of DEC holders to buy packs instead of dumping them in the market.

There is a large number of individuals hold tons of DEC for the sake of the SPS airdrop points. We will be seeing a massive price drop of DEC if this holders sell their DECs.

At the time of writing, the number 200 on the top holders list is currently holding at least 1.15 million DEC.

The top holders of DEC and how much they hold can be found at peakmonsters’ explorer here.

Final Thoughts

The mechanisms I’ve discussed above are effective but not perfect. The market price of DEC is still in hour hands. As long as we are willing to sell our DEC token at a low price then its market price will remain low.

Personally for me, I learn way more than the DEC I earn.

While it is good to earn a reward from playing, it is also interesting to learn how mechanisms are created to give more value to a coin/token.

This is very useful information for a wannabe investor like me. It gives me a basic idea on how to figure out the value a coin/token more accurately when trading or investing.

And who knows, I might be a part of a team that would create a coin/token in the future.

Thank you for reaching this point on my article.

I hope I clarified or answered most of questions about the DEC Capture Rate.

Feel free to comment in your thoughts. You may have some questions or additional information you want to add.

This is my very first post on Leo Finance so let me use the tag #newlion as suggested on this post.

Again, thank you and more power!

Let’s play on!!!

Posted Using LeoFinance Beta