RentMoneys Thoughts On The Purchasable SPS Validator Licenses

in LeoFinance7 months ago (edited)

Disclaimer:

I routinely make bad financial decisions. This post does not contain any financial advice. Always do your own research before investing any of your hard earned currencies and always remember the golden rule of investing, Never invest what you can't afford to lose.

SPS Validator Node Overview & License Presale

  • Planned to launch Q4 2022
  • Validator Nodes will run on a Delegated Proof of Stake (DPoS)
  • 3.75M SPS tokens allocated per month to the SPS Validator operators pool

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The above screenshot shows the tiered price of the upcoming SPS Node Validator Operators Licenses. As you can see there will be a presale of 2,000 Node Operator Licenses with a price of $1,000 USD worth of SPS and 500 Vouchers per license. From there the Validator Licenses prices will increase after a predetermined amount of Licenses have sold. Vouchers are only required for the presale. After the presale ends Vouchers can be used to help give discounts for purchase. For example in Tranche 1 the price of a Validator Node License will be $3,000 worth of SPS. Those who decide to can use Vouchers to help bring down the overall SPS/USD cost in a ratio that is displayed under the Voucher Discount Rate section. Example, in Tranche 1 the voucher discount rate is $3.00, which means that each voucher token spent will reduce the price by $3.00. Since the maximum discount is 50%, that means that you can spend up to 500 vouchers to reduce the price from $3,000 to $1,500. Purchasing SPS license nodes is just one way to run the SPS node. One can run one pro bono (for free). One could also get voted in as a top Validator from those who engage in the Splinterlands universe. For this post I will be focusing on the paid validator licenses.

RentMoney's Thoughts

I can't help but look at this and wonder if they overpriced the licenses. Not in USD worth but in SPS worth. Currently SPS is just north of $0.12 USD which means it will cost just under 9,000 SPS to cover the $1,000 USD cost. The current USD value of Vouchers is 1.82 (last sold) which means the current cost of 500 Vouchers is $910 USD. Then there is the fee of running the node itself from whatever application you decide to apply to run it. Splinterlands will release details on how to run a SPS Node at a later date. Going back to the SPS price of *9,000 SPS, I look at this as today's price vs. future value I see SPS at. Sure SPS is currently trading at $0.12 USD but that is with no usecases implemented. To me the Future VALUE of SPS is much more than its current $0.12 USD trade worth.

Which brings me to my next thought of it might cost less to purchase a SPS Validator Node License in a later Tranche. Since I believe the SPS price will drastically increase over the next XX amount of months I believe the amount of total SPS needed to purchase an SPS Node could be lower in certain Tranche levels than the SPS needed for purchase in the presale regardless of the USD increase applied after each Tranche sells out. My thought process is based on the cost of assets in cryptocurrency terms and not Fiat. The overall Fiat value will increase as we progress through the multiple Tranche levels but when in cryptocurrency-world I make my decisions on how much cryptocurrency something cost/earns not how much Fiat worth of cryptocurrency something cost or earns. Of course this thought process is mute if SPS shoots up in USD value before SPS Validator Licenses sale date launches. Don't get me wrong, I don't think the presale price is unreasonable but I do think its slightly over priced in SPS terms. All that aside, if I learned anything from my Splinterland venture its this, Its better to have than have not in the Splinterlands universe. So its very likely I'll try and get my hands on at least one license during presale.

SPS Airdrop

The above is just a taste of the usecases planned for SPS. The main governance usecase hasn't been implemented yet and neither has its secondary usecase of purchasing the mini NFT set of playable cards that will be coming in the form of Booster Packs. The SPS airdrop has a total run time of 365 days. Currently we are on day 275/365. That means there is still 90 days of airdrops to he had. If you are hesitant to join I'm here to tell you that you are not late, you are just in time. 90 Days of airdrops is allot more days of airdrops than any other project will give you. Each day you hesitate is a day you miss out on FREE SPS. To be included in the airdrop all one needs to do is hold Splinterland assets. Each asset held will award you airdrop points. The more airdrop points you have the larger the amount of SPS you get dropped each day until the airdrop ends. To learn more about the SPS airdrop Click Here. A screenshot of what assets count towards airdrop points and how much airdrop points each asset is worth can be seen below. Not all Splinterland assets require purchase. My personal favorite way to earn airdrop points is to earn SPT tokens by blogging on the Splintertalk frontend. Each SPT earned and held will award you with 0.25 airdrop points.

What Is Splinterlands?

Splinterlands is a blockchain game built on the Hive Network. The game itself utilizes NFT's for game play. These NFT's can be won in battle and/or purchased from the official Splinterlands marketplace or many other secondary markets. Game play rewards players with cryptocurrency and in game assets. Click here to get started with Splinterlands.

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Recent Voucher Trade History

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Recent SPS Trade History

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Posted Using LeoFinance Beta

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That future value of SPS is a quandary. But disregarding SPS for a moment, if we even reach Tranche 3, it will peg the price of vouchers to $7.50 each. What will this do to booster pack sales? No one would use a $7.50 voucher to get a free $4 booster pack. So, bonus booster packs for quantity purchases would effectively be eliminated. Unless the price of booster packs goes up also...?

Its interesting to think about, once we progress to Tranche 3 we will then have the $4.00 USD bonus boosters pulling down the price of Vouchers while the Validator discount bonus pulls the USD value of Vouchers towards $7.50 USD. I think what happens here is very unpredictable as there is too much to consider. For example, how successful will the sale of Validator Licenses be. If its just the core base purchasing than the $7.50 discount for Vouchers might not have a lasting impact on Voucher prices as most core players will likely have their licenses by Tranche 3/4. On the other hand if we get an influx of new players and they want Validator licenses we would likely see a boom in Voucher Prices and by extension SPS price should also benefit.

Posted Using LeoFinance Beta

Sooner or later, when we see the next Bull market, we will see SPS and validator licenses go through the roof. It will be like Land circa Fall 2021 all over again. High SPS price drives validator sales and validator sales drives up SPS price.

I agree but I base my thoughts on the SPS cost of the license vs the SPS return. If we look at total cost of presale licenses using the numbers in the OP it will total $1910 USD. That same USD amount at $0.12 (current value of SPS) each equals just shy of 16,000 SPS. If the presale + Tranche one and two sell out before rewards start being given for license holders that would leave license holders being dropped 375 SPS per month. That would mean it would take 43 months before we see a profit. That is leaving out the cost of running the node itself. If SPS Price rises before license sales, purchasing them could end up being a great deal but as is I'm not so sure.

Posted Using LeoFinance Beta

I thought about this too and I'm not sure what its going to mean yet for the game but you can't say no one will do it. We just saw people spending $20 on vouchers to buy $4 CL packs in the presale to have a shot at Dr. Blight.

Yep, we're a crazy bunch all right.

This is going to make me wonder whether or not I should save my VOUCHERS to sell later or not. As it is right now, I stake my SPS and I sell my VOUCHERS. I don't think booster packs will go up unless they sell out.

Posted Using LeoFinance Beta

Vouchers will likely see an uptick just before presale launch. Boosters taking any type of meaningful jump upwards in price is unlikely. As you said they would need to sell out on the official Splinterlands market before the secondary market gets hot.

Posted Using LeoFinance Beta

Great post!

If you think SPS will increase in value, this is reason to buy the node since it will reward you with more SPS that you put in, in the long run. And its never a loss.

Depending on how many people will purchase a node, but roughly you will get the amound SPS back within months independent of the SPS price, right?

Months ROI (1k sps) = Amound of nodes / (3700 * 0.9)

Posted using Splintertalk

If 10,000 nodes sell that's 375 SPS a month per license.

10,000 X 375 = 3,750,000

That's presale, Tranche 1 and Tranche 2.

That's two years to break even with the SPS sale portion. Almost four years if we consider 500 Vouchers is currently worth almost as much as $1000 worth of SPS is. 2-4 years is allot of cryptocurrency years (I hope my math is wrong but I don't think it is).

Posted Using LeoFinance Beta

Excellent analysis of SPS Validators License. If have funds the Presale is a good option !

It will be interesting to see how the sales go.

Posted Using LeoFinance Beta

Good analysis. Thanks for thinking out loud for our benefit 🙂

Thanks,

I wonder how long presale last. With just 2000 licenses I can't see it lasting very long. I suspect the bigger whales of Splinterlands will buy multiple for resale during later Tranches.

Posted Using LeoFinance Beta

Waka sold out in 30 seconds. If whales get in feeding frenzy, they could go really fast

!gif yup

Posted Using LeoFinance Beta

We will see if this gives a boost to SPS price, good analysis.

If I was a betting man I would bet we will see a short term uptick in SPS price just before presale launches.

Posted Using LeoFinance Beta

I'm waiting until tranche 1 but only because I have the SPS and vouchers I need already. If someone wanted to get in but didn't, I'd say buy enough SPS and vouchers now and then wait. I might even buy with all SPS and then wait for Tranche 2 and sell my vouchers for $5 each to lower my overall cost. Don't know. Have to see how it goes I guess.

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Interesting strategy, its likely you won't be able to sell vouchers for a straight $5USD. There would be no point in anyone purchasing Vouchers at $5 USD to use them to get $5 discounts as that would leave them getting $0 in discounts.

Posted Using LeoFinance Beta

Good point. I'm writing up a post on the math of buying validators and trying to figure out the possible implications of the vouchers now.

If these are at all popular there's going to be a severe voucher shortage. Either that or people will just not use them.

I look forward to reading that post.

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Posted Using LeoFinance Beta

I saw the pre-sale prices and I completely gave up any thought about getting a validator node. Like you, I also think that SPS has a bright future due to its development but I honestly am still confused about what the validators will actually do.

Posted Using LeoFinance Beta

SPS Validators are people who run nodes/servers for the Splinterlands game. It helps make the game more decentralized as no one person can pull the plug on the server that runs the game. Just like HIVE Witness get paid to run servers/nodes for HIVE, Validators will get paid in SPS for doing the same for the Splinterlands game. The key difference is there is no buy in option for becoming a HIVE Witness (They are voted in). With SPS Validators one can buy a license and earn SPS or/and get voted as a top Validator and earn SPS that way.

Posted Using LeoFinance Beta

Yes, but are they validating for the Hive network, or are they validating the internal Splinterlands system? There are just so many things about the validation that I don't really know about.

Posted Using LeoFinance Beta

Validating for Splinterlands.

Similar to how Hive-Engine has their Witnesses.

Posted Using LeoFinance Beta

Great write-up as usual! I haven't played SPL(no time anymore) in a while but I still stake up my SPS while I rent out my deck.
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