SPS - to stake or not to stake...?

You know me, I do like to stake a token, so I just bought back all the SPS I've been selling over the last few days (for a nice little profit, cheers!) and staked 3000:

I wanted an early in to kickstart my 'stake for Chaos Legion campaign' - I don't want to miss out on that so I wanted to lock some tokens up straight away...

HOWEVER, I don't think going in hard to staking now is necessarily the best option for accumulating SPS, this is really just a gesture-nod to the Splinterlands system on my part.....

What will staking rewards look like?

According to today's announcement post there will be 7 500 000 SPS tokens dropped every month on those staking SPS in-game.

So if you can control 1% of the pool, you're sitting pretty....

The example given in the SPS staking announcement post makes this look like a tempting offer...

As a quick example, if there are a total of 10M SPS tokens staked, and you have personally staked 100k SPS tokens in your account, then you will receive 1% (100k / 10M) of the SPS staking rewards pool, which comes to about 0.856 SPS per Hive block (every 3 seconds roughly), or 75k SPS for the first month.

Irrespective of how much ends up getting staked, IF you can control 1% of the pool you will receive 75 000 tokens every month, or around 2500 a day.

The problem with the above example is that for regular users who don't already command $100K in Splinterlands assets and don't have another $50K to spend on SPS, short of someone accidentally sending you that 100K SPS, your chances of controlling anywhere near 1% of the pool are zero.

There are a few people that can command that sort of return ATM such as @nealmcspadden, AND if they choose to stake the reality is that within a couple of months they'll be staking nearer 1 million out of 100 million - staking will probably end up being out of hundreds of millions in the near term as there are a billion tokens set for release in the first year, so I imagine overall staking will be in the 100s of millions rather than 10s of millions.

My realistic best-estimate at REAL staking returns once things have settled down....

I'm getting 550 SPS a day on Splinterlands assets worth around $80-$100K all-in at current market prices, and there are about another 100-200 users at my level and then a couple of dozen MASSIVE accounts way above me, and then a bunch of smaller accounts with insufficient assets to significantly influence distribution (not saying I'm not insignificant with a measly $100K in, I am.)

These figures give me a chance of commanding 0.1% of the SPS pool, probably no more than that, unless I want to spend literally $10s of thousands of dollars on Splinterlands assets.

Anyway, my target after 6 months is to have 100K SPS staked to the pool, which is realistic, and I think this is how things are going to look after a few months of staking to the SPS pool.

• My Personal stake (my target) will = 100K
• Out of a total of at least 100 Million staked
• That's 0.1% the pool (which sounds about right for a player of my level, I know my place).
• This will command me 200 SPS a day.
• = 75 000 a year or a 75% return on a 100K Stake **.

Of course things might look worse than this for me. I could have less than 0.1%, quite easily nearer 0.05%. However, the fact that the SPS returns on DEC are better than this should put people off staking to an extent.

NB that 75% figure is similar to the current Pancake pool.

NB Selling SPS for DEC (and pooling) may yield me more SPS

• I've got 3.1 Million SPS airdrop points, and get a drop of 550 SPS a day, so every point gives me 0.00017 DEC.
• 1000 DEC - gives me 0.17 SPS a day
• That = around 60 SPS a year
• So for a $5, 1000 DEC VEST I get $20 of SPS
• That's a 400% return compared to a guestimated 75% settled return on SPS.

HOWEVER, this option wouldn't give me playing bonuses, and then there's the fact that IF these returns remained the case, the relative prices of DEC and SPS would level out the returns, the market would just naturally sort it.

The SPS-DEC pool may be an even better option...

I'm considering pooling SPS with DEC on TribalDex given that I've no idea what's going to happen to the price of either - but doubling up on SPS returns strikes me as a decent option.

I'm uncertain about how the relative prices of in-game assets are going to change and the idea of hedging one against another, that's appealing.

Final thoughts...

There are further advantages to staking SPS : for voting rights, and as I understand it the return on staking SPS will increase once player SPS rewards start AND there's the added bonus of being able to got in HARD early on, the returns will probably be great for the first few days.

And I imagine there's all sorts of nefarious stake-benefits planned to keep the price of SPS up - I think its a reasonable assumption that the team will take steps to ensure value flows TOWARDS SPS rather than away from it.

So while I think the best route to MOAR SPS FOR NOW may be to NOT stake too much of it, I think the days of this strategy are numbered.... I think in the not too distant future the price of SPS will start trending upwards, $0.30 sounds low to me, and so selling on the way up may not be the most lucrative option.

At the end of the day, whether one makes $10K or $30K out of SPS this year, it's all free money, and it gives me something to write about!

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