The proposal to introduce SPS rewards for Guild brawls looks set to go through without any issues. It is safe to say that the community is pleased with the idea of adding another avenue of inflation for SPS but the same can't be said about the recently added proposals related to DEC.
Remember that some days ago, I talked about the potential of DEC pumping due to incoming proposals that could affect the way we spend DEC in Splinterlands. Well, yesterday, two proposals were pushed forward by the community and as far as I can tell, it's not looking like they will be passed.
The first of the two proposals relates to pricing Rift Watcher packs in DEC. This was the one I focused on in my previous post as I thought it would be a major catalyst for DEC's pump to the desired peg.
The other proposal that I didn't talk about but one that is equally important is the fact that there are plans to also plan validator nodes in DEC. This proposal, if passed, would have also contributed towards DEC pumping to the desired peg.
Not looking good
At the time of writing, the proposal to price Rift Watchers gems in DEC is currently at 45% approval and the one for the Validator license is lagging further behind with only 33% approval. Approval of both proposals could have a positive knock-on effect on the price of DEC but as it stands, it is unlikely.
The only way they get approved is if by some miracle, a super mega rich whale dives in, swoops a big chunk of SPS and votes.
As far as I can tell, I think these two proposals are the first two that haven't been passed since the proposal system was introduced. The question is, why is the community against these two proposals, considering how they could lead to DEC pumping to the peg?
Looking at the Rift Watchers proposal, you can see that the plan is to subtly drive the price of DEC higher by making it the main trading token of the game. Assuming this proposal passes, Rift Watcher gems will be sold at 5000 DEC instead of $5 worth of SPS and according to the proposal, this would increase the pace of sales.
Continuing from the Rift Watchers proposal, it is easy to see the logic behind this move. Using DEC for all sales would simplify trading activities in the Splinterlands ecosystem, particularly when it gets to the desired pegged value.
Also, just like many others that are probably thinking it, nobody wants to spend their SPS token, particularly in this wicked bear market, leading to the thought pricing in DEC will boost sales.
It is pretty much the same thing with the Validator license proposal that seeks to price the licenses in DEC as well. Unfortunately, this one is doing even worse than the rift watchers proposal, as the vast majority believe it is not a good move.
Keep in mind that both Rift Watchers and Licenses are both generating value for the DAO through sales, so I reckon therein lies the real issue. For shoppers, using DEC makes it easier and for traders like myself looking for a quick DEC flip, both proposals getting passed favours us.
However, when you think about it from a business perspective, if given the opportunity to receive assets, would you rather receive DEC than SPS token? On the surface, it makes sense that the DAO, which is technically managed by SPS stakers by the way, will not entirely be eager to receive DEC instead of SPS.
Also, it is worth noting that, if both proposals get approved, the value of DEC that will go to the DAO from sales of Rift Watchers and licenses will be significantly less than the value of SPS tokens that currently go to the DAO from sales because of the assumed peg that items tend to be sold when priced in DEC.
Using Rift Watchers as a simple example, $5 worth of SPS going to the DAO is better than 5000 DEC worth significantly less than $5 at the current market price. Even if DEC eventually reaches the peg, there's still no real value as the peg is DEC's ceiling while SPS technically has infinite potential, making it a much better option for the DAO.
In summary
One thing we can say for sure is that the proposal system is serving its purpose and SPS tokens are playing their part. The community makes decisions and that's the most important thing.
For DEC, both proposals don't look like passing, meaning that we could see our short-term pump towards the desired peg come to an end. Anyway, regardless of the direction of these two proposals, the plan for DEC achieving its peg hasn't changed and we will definitely be seeing more moves to get it to the desired peg.
