Keep the DEC or convert to SPS? - Wait is the return rates on SPS vs. DEC driving DEC prices?

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(Edited)

Ok so for those who have been following Splinterlands SPS journey for the next year every day SPS will be dropped on everyone who holds assets, including DEC. You can also stake SPS for APR. Currently DEC is trading way off peg at $5 per 1000 which is why I was curious if the balance had shifted.

With DEC and SPS on HIVE Engine the question becomes:

Will holding DEC or Staking SPS give better returns?

Airdrop and Power
So first let's talk about the airdrop, DEC counts for 1 points of power per DEC and I am going to use 1000 DEC as it is a nice round number. 1000 DEC = 1000 power. The problem is the pool of airdrop is set and divded by everyone so I can only use myself nad the current state as an example,

I currently gets 12.5 SPS a day from 72,700 power so each day my 1000 DEC is making 0.17 SPS .

Selling that DEC and staking so SPS
So as I mentioned DEC is way way off peg right now and 1000 DEC is currently worth $5.

SPS is currently trading at about $0.275 so my 1000 DEC can be converted to 18.1 SPS.

APR on staked SPS is currently ~ 352% which is 1% a day. So my 18.1 SPS can produce 0.18 SPS a day

Wait is the return rates on SPS vs. DEC driving DEC prices?**

I was a little shocked at this close ratio os 0.17 SPS for DEC vs. 0.18 SPS for SPS staking. In fact it kind of hints at a correlation between the two prices.

If I was going to estimate the price of DEC based SPS price I would use the following equation.

Price of DEC =( Daily DEC SPS airdrop rate/ Daily SPS APR ) * SPS Price
Daily SPS APR = (SPS APR/ 352)

This means if only the SPS APR goes down, DEC price will up up
If the Daily DEC SPS airdrop rate goes down, DEC prices will go down
If both hold then SPS will be pegged to DEC at the current rate.

So the race is, will SPS APR go down faster than DEC airdrop rate?

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Posted via proofofbrain.io

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Another interesting point is that 1 DEC = 1 AirDrop Points and 1 SPT = 0.25 AirDrop Points, so at the current price I see that it's worth converting all SPT gained to DEC

For example, 100 SPT = 25 AirDrop Points, and if we sell at market price we get 1.16 HIVE.

With 1.16 Hive we were able to buy at market price approximately 93 DEC, which is worth 93 AirDrop Points

A value almost 4 times higher

Posted via proofofbrain.io

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Agree ! However it is tempered by the fact my spt is staked and it grows each day through curation

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Nice maths here. Thanks for sharing.

I think the APR of SPS staking will go down with time. So holding DEC for more SPS airdrop will be better than selling the DEC for SPS and staking it.

People are holding DEC more. I think this is the best way for now before more utility for sps is activated especially in September when the new cards are likely to be released.

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I agree, the one concern I had is with the amount of DEC being pumped out will its APR decrease over time? I know SPS will go down fast, especially when presale comes around , but faster or slower then the current DEC rate given the gold rush. !PIZZA

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APR rate goes down significantly each day more SPS get staked. As SPS gets printed daily the inflation will keep its price low or will even decrease it. DEC might come down to peg at some point. I am not sure when though with everyone hodling them for life I cant see it come down in the near future...
The SPT conversion to DEC... I would like to have points from both since SPT gives me als power to vote on SL related content and earn curation rewards I will defo not convert...

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That was my struggle, the DEC APR might also drop as they flood the market with DEC so which drops quicker? !PIZZA

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I think DEC will maintain its value the stable coin is now stable at 5x peg...
As long as they count 1 on1 as airdrop points they will maintain price but I am just an ape who likes DEC
no financial advice DYOR etc.
etc!
!invest_vote

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Sounds like holding the DEC and staking the SPS is the way to go for now then. Thanks for doing the maths! 😁

!PIZZA

Posted Using LeoFinance Beta

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Glad you liked it, it's same same right now but it will depend on which APR goes down first, DEC or SPS

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APR will almost certainly go down. The ones that want to hold for decision making reasons will keep staking and everyday thus pushign APR down. I'm holding about 800,000 DEC and my crossroads is do I use to to purchase Chaos boosters when they are available or keep for airdrop points. The answer depends on how many points (if any) will Chaos boosters have?

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