Dark Energy Crystals (DEC) is the In-Game currency of the Spinterlands game on the Hive Blockchain. The economic model the game runs on is quite interesting and indicates the price of DEC should go up at least with +33%. Here are the reasons why....
Economics of Regular Games
The economic model of nearly all digital games as we know them right now is pretty straight forward. You pay money to purchase the game which goes to the developers and the distribution platforms (Steam/ App Store / ...). Many games also allow players to earn or buy in-game currency in the form of gems which can be used to progress getting certain in-game items. All of the paid money for this also goes to the developers & distribution platforms and both the items and the gems themselves can not be sold whatsoever making them completely worthless aside from some fun you get from them.
Economics of Splinterlands
Splinterlands allows players to play the game for free so everyone can try if they potentially would enjoy it (warning: some work still has to be done to make the initial experience better). Unlike regular games, Splinterlands allows a free market where players are able to sell the in-game items (cards) and the in-game currency (DEC) they either bought or earned by playing the game. The game sells a 10$ priced Summoner's Spellbook which unlocks the ability to start earning these rewards along with some other perks. This 10$ goes directly to the Development team and is needed in order to keep the economy healthy. If it was allowed to make unlimited accounts for free, bots would totally take over making thousands of accounts to grind out micro rewards killing both the game experience and the economy of the game.
This system makes it so that it is favorable for players who want to grow their collection and earnings to first buy from other players instead of giving their money directly to the devs. Only when the demand is bigger compared to the supply, it will be cheaper to buy things in the game directly giving your money to the Development team. This makes for an entire in-game economy that needs to stay healthy as real rewards are given out while the devs ultimately also want players to buy directly from them.
Pegged DEC Price
Everything in the game that can be bought can also be paid for with the in-game currency the game is rewarding players with at a pegged conversion rate of 1000 DEC = 1 Dollar. This makes it so that players who earn DEC can undercut the 1000DEC = 1$ value making it cheaper for players who want to buy something in the game to buy up those DEC that are offered on the market.
Current DEC Price
The Dark Energy Crystals are being traded on multiple exchanges.
| Exchange | Price | 1000 DEC |
|---|---|---|
| Hive-Engine | 0.00248 Hive | 0.61$ |
| Steem-Engine | 0.00299 STEEM | 0.63$ |
| Trontrade.io | 0.0323 TRX | 0.53$ |
They are currently trading way below the 1$ peg going for a 40% Discount mostly because there is quite some sell pressure from players who are grinding out rewards trying to sell them while very few new players actually know they can get a huge discount by buying DEC on the market and using that to buy packs or other in-game purchase.
However, there are multiple reasons why the price of DEC is bound to increase and get closer to the pegged 1$ for 1000 DEC again.
- Future Expansions / Promotions
Just recently, the Splinterlands team ran a promotional event (Link) where they created a new Epic card. This was given away to players for every 5 packs they bought in the store and these packs could also be bought with DEC. Since DEC was way cheaper on the market the demand increased and supply decreased pushing the price for 1000 DEC back above 0.90$. There are many more expansions & promotions planned and this supply/demand mechanism will push the price up again when they arrive. The next one which allows players to buy land should become available for pre-sale soon (Link). If previous pre-sales are anything to go by, there will be a big demand for these (I plan on buying some myself) causing the price of DEC to jump up close to the peg.
- DEC Burning Mechanisms
Right now, DEC is burned when players use it to buy Potions, Orbs, Skins & Guild Upgrades. These are not enough to totally offset the new supply that is created but the next expansion update is said to be a DEC burning force. New elements like items & spell will be introduced which
Game Reward Balance Tweaks
One of the issues right now is that it's too easy to get into the higher leagues without the need to actually invest all that much making is so that the game is more rewarding to play with multiple small value accounts. The plan to fix this is to have collection value be part of the equation when it comes down to how much rewards you will be able to get. Once this is implemented, the incentive for players to buy packs & cards to increase their collection value should lead to more DEC being used for that reducing the current sell pressure on the market.Decreasing DEC Inflation
The game is currently still in a stage where rewards that are given out are actually quite high because it helps to get an initial player base. Splinterlands is currently the most successful dapp according to State Of The Dapps & Dappradar with 5000+ daily active accounts. This gives the game a good chance to become more popular attracting new players. The total DEC that is being given out to players started at 1 Million DEC each day and is ever decreasing now being at around 900k each day. As it gets harder to earn DEC and more players eventually come in, the number of players dumping it on the market should decrease pushing up the price.Possible Crypto Bull-Run
Splinterlands is a game that is fully ready in case there would be another crypto craze similar to what happened in 2017 where a lot of regular non-crypto people came in. With the decreasing inflation, extra expansions & burn mechanics, it is hard to imagine DEC will still trade around 0.60$ at that time.
- Price Target
0.80$ is a very realistic and conservative price target for DEC which currently can be bought for 0.60$. This means a return of +33% if you are willing to buy some DEC now and hodl it with a risk/reward ration that should be very favorable. I am currently just Holding on to all the dec I am earning and I'm actually tempted to buy some more if it wasn't for the crypto market being ready for another bull run. I will use it to both buy in on the expansion and sell some to re-invest in other cryptos once the price reaches above 0.85$
How much DEC Playing Earns
I am making very detailed monthly Splinterlands Earnings Reports where I break down everything I managed to earn from the game including DEC. Last month I managed to earn around 43847 DEC from both my accounts combined. To see the details check these posts.
(These earnings come from playing the game 30 min+ daily for the last 10 months slowly but surely building my card collection which by now adds up to 1000$+ total value. Don't expect to replicate this from the start)
Sign-Up Promo Deal
Important: Treat games in the first place as games and not as investment opportunities, Splinterlands allows you to earn some money and get good returns but you are generally much better off flipping burgers in Mcdonalds when looking at the money earned for the time invested.
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