True decentralization that gives power to the masses to have a voice in decision making is a great way to governance but may also have an ill if the masses gang up for the wrong course or act uninformed about a thing. This is my view on the presently active proposal on Splinterlands DAO tagged "Swap DAO BUSD and USDC/T For DEC #36". The proposal had received ealier support vores in its first two days and later being hit by an anti-vote. It is a very crucial proposal that requires technical and long term reasoning , though each participant is entitled to his opinion.
The Proposal:
This proposal is for the DAO to use the current BUSD and USDC/T reserves to purchase DEC. This swap will be handled by the DAO management team in a way that minimizes fees and slippage as much as reasonably possible. The max purchase price for DEC is $0.95 per 1k DEC (95% of par value). source
The proposal seeks to use the Splinterlands DAO reserve funds to buy Dark Energy Crystals (DEC) token. DEC is the in-game currency token for Splinterlands play-to-earn NFT game. $DEC was designed to a soft pegged price of $0.001 USD. By its soft-peg design, DEC is viewed as a stablecoin in the Splinterlands ecosystem. With a present market value ot $0.0008416, DEC is considered to be 20% discounted. Buying into the token now only guarantees about 15 to 20% profit since there is a 95% of peg value limit to avoid market manipulations. At a price above $0.00095, SPS would have to be burnt to mint more DEC.
The Splinterlands DAO reserve is held as stablecoins - BUSD, USDC and USDT and currently owns just under $500k in worth. Should all these funds be used to purchase DEC at this present rate (assuming no price slip), about 600 million DEC would be purchased and that is just about 10 -13% of the present DEC supply. 600 million DEC to be purchased and held in DEC is just 60 million above the 542 million DEC/DEC-B burned during the just concluded Anniversary Burning event. That amount was burned freely by DEC owners just for a meagre $100k prize pool.
It's a "NO" for me
The alleged benefits of the proposal are to: 1) help DEC reach par faster and 2) increase the value of the DAO holdings by purchasing DEC at its current discount. For me, it is a waste to buy 600 million DEC with $500k just to hold in the DAO reserve when such capital can be used to diversify into an investment that could increase the treasury holdings. Holding the reserve funds in BUSD, USDC and USDT may not be the best option since it is not bringing any yield to the treasury.
Using that much fund to guide a nearly stable token within the Splinterlands ecosystem is as good as keeping the funds as BUSD, USDC or USDT. I think that buying a token with potential 10x growth would be a smart move and the profits could be used to buy SPS off and burn them. That would fare better for the Splinterlands ecosystem and sounds more like a sustainable deal.
If ou ask me, i would say, Splinterlands can also diversify such funds to invest in a growing project on Hive such as LeoFinance and $LEO token. We are sure of a 10x in the price of LEO in the next 6 months to one year and besides, the curation rewards on Leo Power would be accruing big.
$500,000 would buy out at least 3 million $LEO assuming the price slips to $0.15. That would have taken so much LEO off supply and such amount of LEO staked while its curation rewards could be used to buy SPS on daily basis for a burn. That would be a decent collaboration that could change the face of both projects on Hive.
Does my Vote Really Matter?
With just 4,000 staked SPS voting against the proposal, I am only wondering how much my vote matters in this duel. I know there are Splinterlands players with a million or half a million staked SPS. 4k seems like a drop of water in an ocean but it's better to stand for the right thing even with tiny voice.
Out of the total Votes cast so far on the proposal being 278,506,836 staked SPS, 67% (186,105,381 staked SPS) votes in support of the proposal while 33% (92,401,455 staked SPS) votes against. The proposal is already 1% ahead of the pass mark and it only takes a last minute push by whale stakeholders to give it a decisive head. Let's watch as things unfold in the next 48 hours before the voting window elapse.
You want to learn more about Splinterlands, SplinterGlossary is a hot reference center for you.
Splinterlands game is termed the "next generation of collectible card games" in which allows players to collect, trade, and battle with provably scarce digital collectibles with real-world value. Battles on Splinterlands Unlike most trading card games, are fast and furious, and are usually completed within few minutes. The Splinterlands gameplay is simple and easy to learn viz: reviewing combat rules, making and submitting of the team and watching the battle unfold.
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