In this video we take a look at a previous AMA to see what type of possible economy changes could effect SPS in the future. This information is absolutely critical for anyone holding or perhaps deciding whether to invest into SPS.
Firstly we go through an overview of Terra coin, and the dichotomy that may present itself if we were to see something similar with SPS and DEC.
Terra stable coins are backed by Terra's native Luna Coin. Terra uses a mint and burn mechanism where $1 dollar worth of LUNA can be burned to mint $1 dollar worth of UST and $1 UST can be burned to mint $1 dollar worth of LUNA.
This dynamic allows UST to maintain it's peg due to supply and demand.
If UST is worth more than $1 dollar then it incentivizes LUNA holders to burn LUNA for UST because they could turn around and sell that UST for another stable coin or token for more than $1 dollar. This ultimately would end in increasing the supply of UST which would then bring the UST back down to the $1 dollar peg.
Inversely, if UST is worth less than $1 dollar, then UST holders are incentivized to burn UST to mint LUNA seeing as they would receive a higher dollar amount of LUNA.
This decreases the supply of UST which would cause the price of UST to come back to it's peg value and so on and so forth.
This model could work even better with SPS & DEC because DEC is backed by actual products. Where UST is not.
But furthermore, could Splinterlands be it's on DEFI platform as well? This is a very interesting topic, in the video we cover this in further detail and how this idea could function - taking idea's from MAKER DAO.
In order for these possible changes to take effect, I would imagine DEC would have to fall back to it's designed value so that there would be no fallout from the community. So it is likely we would have to wait until the end of the airdrop before these changes could be made.
So could this mean a return to peg value for DEC?
What are your thoughts on these possible changes?
▶️ 3Speak