On the last AMA, putting in the big blocks to spark the next rally was mentioned several times by @Yabapmatt
The idea seemed to be that there needs to be big things happening and if enough big things are happening and there are enough exponential systems built around those big things that a spark will ignite the next big run. He thinks they could make another one this year.
But the thing is, all the big pieces they need are already in place. The last rally didn't end because it ran out of steam naturally. It ended because they made decisions that changed the drivers of growth.
Then it got rigor mortis because they announced that even though player growth wasn't there anymore, they were going to 10x Untamed with CL.
Several times since then the game has started gaining a little traction and every single time they've come out and to excitedly say in some form or fashion that more supply is coming despite no growth and everything turns down to find a the next bottom.
Just recently they did it not once but twice when they first announced they were doubling the reward pool with the new game modes while halving the CP requirements for modern format.
Then once DEC stabilized from the 50% drop off that caused, they announced in this AMA that the new rewards system will substantially increase rewards to encourage more playing even though, again, there's been no growth to warrant it and they already have a system in place that increases rewards when demand comes in. It's the same system that manages the peg.
So what did price do? It very predictably dropped. Because you can't just give people more rewards without those rewards repricing. The market has already placed a value on playing this game and that value will not increase because you handed out more units of rewards.
But when they reprice the value of playing, it also inadvertently reprices the entirety of the Dec supply people are holding. So instantly, millions of dollars in value evaporate because they are adding thousands to the rewards pool at a future date. Oh and then cards follow suit.
This happens in the same breath as @Yabapmatt says all he thinks about is adding value to players and investors assets. Someone needs to explain the concept of supply and demand and market caps to the dev team because they seem to believe they can just shovel more supply out the door and that means more value.
MOAR CARDS, MOAR DEC, MOAR VOUCHERS! WHY ISN'T PRICE MOVING UP WHEN WE KEEP GIVING YOU MOAR??! OK, We'll BRING OUT MOAR CARD PACKS AND 10X THOSE TOO. MAYBE THEN PRICE WILL GO UP AGAIN?
They literally said in the AMA that if the economy isn't sparked enough by the added rewards, it means they haven't added enough yet.
OK, unexpected rant there but I truly am floored by this line of reasoning and it really ties into the point of this post.
All this new stuff like validators and land is amazing. It's certainly rally worthy. But all Splinterlands needs in order to get back to rallying is a an acknowledgment from the devs that they oversupplied the game and they plan on correcting it.
That's it.
"Hey y'all, we put out too many cards and now we're trying to force too much Dec into the economy with no new demand and we see now that it's driving prices down. This outcome is against our goal of providing value to our players and asset holders. We are now going to reassess our planned release of Rift Watchers and explore better ways to release cards packs into the market in the future. We are also looking into ways to soak up some of the inventory that's already out there of both cards and DEC."
That's it. If the team came out and said some approximation of those words, the game would start to rally again and the rally would bring attention and new players and investors which equals new demand which would push the rewards up naturally and the rally would gain steam.
All the innovation is incredible and it makes this game fun and valuable but for right now we don't need all this other stuff just to get a rally started. The game freaking wants to rally. People want to believe in it. They just need to know they aren't going to get their holdings diluted to nothing if they buy something. They need to know their cards will remain a scarce asset. They need to know there's a liquid market for their cards which comes when assets are not scary to buy.
This is why I keep coming out here and talking about Splinterlands and it drives me crazy when the downfall in prices is defended by a drop in crypto or because it rallied too much too quickly.
Prices can take a breather after a huge rally. When prices 10x they will regularly retrace 50% of that gain but they don't usually give it all back unless something fundamentally changes.
In this case the only things that changed were controlled by the devs. First they cut rewards to new players and pissed everyone off and then they oversupplied the market with new inventory. These aren't iPhones where it's best to go meet demand to maximize sales. If a market is based on scarcity of assets, you can expand supply when it gets tight but you should never try to meet demand fully and you especially don't go oversupply it. That's death to all value just like we've seen.
Also, player growth isn't price which can get overheated through speculation and may need to correct. Network effects should have player growth speeding up until it hits 50% of its max market where it keeps going up but at a slower pace. But it didn't speed up or even slow down. It stopped dead and reversed lower for months.
Again, we don't need big blocks to start the rally in prices and player growth. We don't need commercials at concerts. We just need a shift in sentiment which comes when the devs decide that MOAR supply doesn't equal more value for players.
This is getting too long but I want to say one more thing.
I think I understand why the devs believe more supply equals more demand.
Because sometimes it's works.
For instance, before Splinterlands existed there was no demand for Splinterlands assets. But they created it and a bunch of assets and suddenly there's demand.
Sometimes when you create a new thing it can create new demand like a new card or land or validators. Sometimes the creation or reworking of one asset can lead to the demand for other existing assets. For example the creation and structure of SPS got people excited and that created a new demand for dec which already existed. Then that demand for dec created demand for cards that helped you win more dec. Validators might do that for SPS.
But that doesn't mean you can just infinitely keep putting out supply and suddenly demand comes running in to soak it up. That seems to be the trap the devs are in. New supply has worked in the past so its now the hammer to the "everything's a nail" demand problem and its making things worse.
They kill rewards for bronze and that caused momentum to stop but that doesn't mean you can just add them back and demand comes back when you've already lowered the value of those rewards and killed the demand for them.
While they should absolutely reinstate bronze rewards and I do appreciate the reworking of the rewards system, the problem now won't solve itself without actually giving those rewards value again. And you do that by creating some scarcity, allowing the demand that's left to grow based on that scarcity, and proving to people that their impulse to buy the dip won't be met with more dip.
People keep saying that when CL runs out that prices will go up again but why would that happen when we already know the devs M.O. is to just do it again. Fool me once, right?
OK, too long. I'm done.
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