Markets are good when they provide investors with the profits they look for and become bad when the investors cannot make good returns on their investments. But, markets are not always the same and there is one rule that markets follow Supply and Demand of assets.
When the demand for items increases, the prices go up, but as the supply of items increases, the prices go down as too many goods are available in the market.
A similar situation has been observed in the Splinterlands market after the launch of Rebellion packs. Let's have a look at the current situation of the Splinterlands rental market and discuss the reasons behind growing demand and increase in rental prices.
Rebellion Edition Tokenomics
The total supply of Rebellion packs is 10 Million and the packs are currently on sale in Splinterlands Shop. The recent snapshot shows that there are 78.3% of packs available for sale, but there is a little twist due to its burn mechanism. If we look at the following data, we can see that a whopping 12.7% of packs are burnt which means the actual sale is around 10% of total supply.
Why Burning Packs?
It is a lesson learned from Chaos packs sale, the market was filled with increased supply which drastically reduced the prices of Chaos packs and cards, the users who heavily invested in the packs had to face recurring losses as many users tried to sell at the cheapest price to recover some of their investments.
So, it became quite necessary to put a mechanism in place to reduce the Rebellion packs influx in the market and keep the Supply and Demand balanced. Splinterlands team clearly mentioned in Rebellion launch paper The Rebellion is Coming about burning mechanism which reads as:
Rebellion packs are burnt almost every day, sometimes the whole chunk of 90% from 25K packs is burnt and the rest is sent to 
This is the main reason for Rebellion cards are quite expensive in the market and rentals are set according to demand.
Rebellion Causes Boost in Rental Prices of Non-Rebellion Cards
Rebellion cards have high rental prices compared to non-Rebellion cards, but since most of the other cards are used in combination with Rebellion cards, it has also affected the rental prices of combination cards. Let's look at the price of Mycelic Slipspawn in gold foil.
This card is usually available at 0.2 DEC rental price, but its price is 1.3 DEC approximately, and sometimes it goes up to 2 DEC because this card is used in combination with Moxian Rebel and Lurking Puffer cards.
Rental Cost of Rebellion Cards
If we look at the rental price of Lurking Puffer, a common card, its rental price for level 1 card starts from 0.51 DEC and onwards.
Similarly, Moxian Rebel's rental price starts from 1.01 DEC and the price goes up and up.
Above examples are for common and rare cards, as we look at the epic and legendary cards, we'll be surprised to see how expensive Rebellion cards can be.
Thanalorian Scion is an epic Water card, its rental price starts from 1.14 DEC, which is almost equivalent to some of the level 1 legendary non-Rebellion cards available in the market.
Endura Brune is a legendary water card, which is not a high-demand card, but still, it has a starting rental price of 1.8 DEC.
Overall Rebellion cards have prices above non-Rebellion cards, and the trend keeps continuing even when users open packs and increase the circulation of cards in the rental market.
Impact on Users / Players
The sudden rise in the rental costs is not good for new players and they are forced to use non-Rebellion cards and some cheap Rebellion cards as they try to make themselves a room in the Splinterlands community. The rental costs are pretty high for new players, their purchase power is low and their understanding of the game is very basic.
Regular players are also affected by this boom, but they are managing their rental expenditures through other means such as pool and SPS reward earnings.
Most of the players try to borrow cards that are really necessary to maintain the league and win ratio, they avoid highly-priced cards and rather rent low-level cards to maintain their budget for the cards.
Rental Card Providers Are Enjoying the Boom
Rental card providers are happy as they are earning twice and thrice compared to what they had been earning before the Rebellion launch. The rental market is booming as the induction of new cards has boosted the prices.
It is a good sign for Splinterlands market and 3rd party service providers because positive growth is seen in both rentals and card sales.
Removal of Untamed Cards from Modern Format Made This Possible
I think the credit goes to Untamed cards removal from Modern format and they were completely replaced with Rebellion cards. This change has created a demand influx for the Rebellion card, in the beginning, there had been a very short supply of Rebellion cards and demand was high, so the prices reached record high during the first month after launch.
Still, there is 10% of Rebellion packs in circulation out of 22% released packs of which 12% are already burnt. Therefore, the demand will remain on the higher side and rental providers will likely see the market booming.
Future of Rental Market
In general, it feels like the rental market will see a bright future as long as the Rebellion burn mechanism is in place and the total circulation of packs remains on the lower side.
There is little interest in buying packs rather users are buying cards from the open market, most users like upgraded cards, and the cost of buying packs and doing an upgrade costs them more compared to buying a desired card. This behavior is also impacting the rental prices to remain on the higher side as fewer packs are opened.
We see a flourishing rental market in the long run and the trend will continue until 30-40% of packs circulate in the market.
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