Splinterlands | Why Bitcoin Rewards Is A Terrible Idea...
Splinterlands Now
I'm a bit of a contrarian right now as the general consensus (at least among those who create content) is positive with the Frontiers Format which is doing well and the Foundation Cards holding their value which makes them believe the next reward set could pull it off also not to be soulbound (which won't work as unlike Frontiers, many players already own enough cards to earn and dump the rewards). However, the way I see it is that fundamental issues are not being solved (Obligated Hours Of Grinding, Devaluation of Assets, Extreme Pay2Win Dynamics, All Game Modes Being the Same,...) and that everything that is done is just aimed to do well in the short term while it will create more "sins of the past" where the price will have to be paid later down the line.
The BTC Rewards Idea
This idea is mainly spread by Tales From The Crypt Mancer (See Youtibe Video) who I normally always agree with given that he has a more rational grounded opinion. However, his bitcoin reward idea is one where the DAO would start selling the DEC they earn for BTC and give that back in the game as rewards. This would give Splinterlands some Free Publicity in the crypto space and attract more players who want to go after the Bitcoin rewards creating a positive spiral.
Reasons Why It Won't Work
1. The Basic Play2Earn Rewards Math...
So far, I don't think there is a single Play2Earn mode which managed to avoid a collapse since the basic math simple doesn't add up. Everyone mainly plays with the intention of earning money, while a large part of the sales goes toward paying Google-level salaries & the cost of running the game. There is nothing backing the values of the assets aside from the rewards from either made-up currencies (which eventually collapse) or the remainder of the revenue from sales being put in a reward pool which sooner than later dries up or deminishes as there are more and more asset holders who got crushed and are no longer willing to put money in.
2. DEC Can't Handle Selling Pressure
Basically, the way it works now is that everything in the game on the background is paid in DEC. When it comes down to packs, I believe half goes to the team and half goes to the DAO.
The team systematically passively sells their bag, taking the 'real money' people pay for their credits in case they buy spellbooks (which can't be bought with DEC at Peg) or when they buy credits to buy cards off the market (which also doesn't work with the DEC Peg). Once the team runs out of DEC, they either buy it on the market with the funds they receive pushing the DEC price back up or they buy and burn SPS in case DEC is at or above peg.
The DAO just holds the DEC and acts as a real sink, lowering the amount that actually is in circulation, so there comes a point when enough packs are sold that there isn't enough DEC to go around as only half of what is sold put back in circulation. At times when the team runs low on DEC, they request a payment from the DAO for the creation of even more cards which gets a part of the DAO holdings back in circulation.
So it turns out that the market can't handle the DEC dumping by the team right now as the price was around Peg between April 22nd and May 11th which conveniently was the pre-sale period. Ever since it's just been a grind down and down and down again. Now What you thing would happen if the Dao would start also dumping part of their DEC for BTC... DEC WOULD DUMP EVEN MORE.... The only reason that DEC hasn't crashed more is because the DAO acts as a sink holding DEC that they aren't able to sell.
3. Bitcoin Volatility & End of Bull Market ???
While I'm all for having BTC as some kind of treasury asset for the long run, starting to buy BTC with DEC that is way below Peg this late in the cycle just feels stupid especially if it's for giving out rewards. It brings the risk that the rewards given out in Splinterlands will be lower than what they were paid for. Even if BTC would go to 250k, it still would be a limited added value.
What Really Needs To Happen...
The way I see it, what players optimally want from a Play2Earn Game Like Splinterlands
- The ability to have continued fun gameplay with their Assets.
- The Belief that their Assets will somewhat hold their value and potentially could go up
- Some Rewards from playing or Earnings for renting out their Assets.
In Splinterlands, old assets have been inflated and power creeped away, they are a 100% sure thing to collapse in value once they get dumped into Wild, and it's near impossible to rent them out while the returns nearly aren't in line with the expected devaluation.
I would say, ideally, a Play2Earn game has a dynamic of a treasury which backs up the assets and is expected to grow in value as the market goes up and the yield on the treasury can be used as sustainable rewards. At the same time, the game would need to be a ton of actual fun for this to work, since everyone is now really looking for quick returns. With so many existing assets already, this also feels unrealistic to start backing the assets anymore. At best, there is an interest peak which creates a positive feedback spiral and allows a short window for bag holders to get out before everything comes crashing down on itself again.
I still believe that an actual real game mode like Draft Mode could be A Real Solution for Everything ! However, this requires some development and stepping away from the extreme Pay2win and is unlikely to ever happen, looking how everything is handled right now.
Conclusion
The DAO selling DEC for BTC to give out rewards in Splinterlands might give a small publicity boost. However, I don't think the DEC price would be able to handle it while the basic math never works out as players would be way better off just buying BTC instead of Splinterlands assets which also would save them a ton of time. The real solution comes from actually making the game affordable, fun, and addictive so people want to play without any expectations to earn.
Good points. Hope Splinterlands can find a way back to old strength.
To be honest, the best case scenario I see right now is for a temporary hype cycle to make prices go x2 - x3 before it collapses down on itself again. just too many fundamental problems that are not being fixed while many of the same mistakes from the past are being made all over again. How can an underpowered 6 Mana Summoner be worth 15x more compared to a lower cost summoner that is more powerful at half the cost.
It's all short-term tricks of which the price will have to be paid later down the line similar to what they pulled in the past.
I agree with you, BTC rewards is a terrible idea!
100% bad idea,.you are right. The DAO if its smart should have it as a treasury asset, not sure if they do though. Did they sell their ETH? If not, now may be a good time LOL
The problem there is that if you let the crowd make treasury investment calls, it's a sure recipe for disaster. However, the Dao acting as a treasury with some real investments that back up the asset values would be nice instead of it just being the cash cow for the team.
The more I think of it, the less real solutions I see.
Thanks for sharing! - @clove71
