In yesterday's Splinterlands Town Hall, a statement was made that is very relevant to all players: SPS Staking will replace collection power. Once the change takes effect, Splinterlands' management and reward token, SPS, will significantly impact rewards.
The sum of the points of the cards owned by the players is called collection power. To compete in a league, players must meet the collection power lower limit of that league. With the change to be made, the SPS staking system is introduced. SPS staking is not a prerequisite for competing in a league. It increases the base reward. As far as I understand from what has been said, the base reward amount is very low. Therefore, SPS staking will determine the amount of the reward to be obtained.
Last fall, I gradually sold the SPS and bought cards with the funds I had acquired. Because the reward system only encouraged card ownership. In the new system, SPS staking has gained importance.
The distribution rules of the prize pool determine the relative value of digital assets in play-to-earn economies. Players adopt a rational attitude and turn to digital assets that will maximize their rewards. Although SPS is a management token, small shareholders do not care about this situation. In fact, those who own the management token hold the key to the system. However, this did not prevent the SPS from performing poorly compared to the cards. Now that seems to be about to change.
According to Splintercards, the total value of the cards is $74.8 million. From the SPS panel of the Splinterlands site, we see that the total market value of SPS is $23.3 million. So the total value of the cards is even more than three times the total value of SPS. This situation is expected, as the current system does not require SPS to get a share of the prize pool. Players are trying to expand their decks, as it takes an extensive portfolio of cards to stand out.
When SPS replaces staking collection power, the total market value of SPS and the total market value of the cards may converge. Because to get a share of the prize pool, players will need both SPS and cards. The SPS price can be expected to increase when the change kicks in, as players will need to stake the following amount of SPS to reach today's reward level.
For example, I usually compete in the champion league, and as of this morning, I had a tenth of the amounts shown in the table. I bought 60k SPS today. I must purchase several more SPS to prepare for the new system. I plan to make up for the missing amounts by renting.
How will the change affect the card prices and SPS prices? Most players will likely go the way of buying or renting SPS. The budget allocated for the card will be reduced. On the other hand, if the change causes new money to enter the system, this situation can positively affect all Splinterlands assets. For example, I have put money into the system from outside due to the change to be made. This morning's purchase of SPS was my first serious investment during the bear market period.
Meanwhile, players are not required to stake SPS in the amount shown in the table. They can also accept earning fewer rewards, But such behavior would not be rational. Most players will want to make the most of their card collection.
I expect the SPS price to rise. We may see a weak course in card prices for a while. The increase in the SPS price will mean that the cards' income will increase too. On the other hand, the Land game Praetoria and the tower defense game Soulkeep will create new uses for cards.
TL;DR
Although I do not have a substantial SPS portfolio, I welcomed the planned change. There was an imbalance in incentives between cards and SPS. This imbalance will be corrected. On the other hand, there will be players who do not like this change. The bar that must be overcome to win prizes is rising daily. Players will have to stake SPS while trying to acquire newly released cards.
Every change that encourages the inflow of funds into the system ensures the ecosystem's growth. If the SPS price rises, this will reflect positively on other Splinterlands assets.
I have always been positive about SPS, which is the stock of the Splinterlands universe. Nowadays, SPS has become even more attractive to me. The summer months will be pretty hot for the Splinterlands.
Thank you for reading.
