Splinterlands Dark Energy Crystals analysis.

Splinterlands/Steem Monsters released their in-game currency, dark energy crystals, yesterday. When I first looked at DEC I was pretty convinced that it would run up quickly and then fall off. That seems to be what most others are expecting as well. We've all been taking advantage of the arbitrage opportunities offered - I've been a DEC millionaire several times, not even sure if I am right now or not - with the idea that it's a frenzy that will be over soon. But as I look at it, I'm not so sure.

I was surprised, playing today, that few of the usual suspects at the top of the ladder were using the new set of cards that was released in the update, which can only be acquired via DEC-priced packs called Orbs. So I took a little deeper look at it, and realized that even with all of the DEC that we put in play aver the last 40 hours or so, there just aren't very many of those cards out there yet - there are still less than ten of each maxed common, and 20 or so at max of the higher rarities. And that's in regulars - there are still golds that don't have enough bcx to make a single max yet.

I estimate that it's going to take at least 35 million more DEC spent on orbs for enough of the new cards to come out so that each of the 30 or so players at the top of the leaderboard who are obsessed with having max decks can each have one. On top of that, each 100 Orbs (or 250,000 DEC) requires 45,000 DEC in potions to maximize its output - and while that increases the value of each pack, globally it also exacerbates the not-enough commons problem.

So that's 40 million there, and that's if they end up distributed efficiently. Smaller players holding the cards, top players holding more than one, people unaccountably burning the new cards for DEC, those of them who want to have golds, and other uses of DEC will inflate that even more. And we're likely to get more potential uses of DEC well before we get additional supply, with the @steemmonsters account switching over to selling votes for DEC in the near future.

So as I look at DEC demand, I think a hundred million is a very reasonable number to shoot for in the first wave, and we're still a long way from that. Daily rewards are worth a little over a million, of which probably half will be spent or saved by lower-level players. So they're not going to make very much of an impact - that's only a thousand new cards in play per day, and players are bound to want a lot more than that.

So at this point I expect DEC to keep increasing in value for a while. I haven't yet looked at what card supply would look like if enough are burned to generate 100,000,000 DEC, but it's certain to be a dramatic effect. We burned through a lot of the market yesterday, and I only see more to come at this point.

This is also synergistically increasing the price of Steem as players seem to be coming in to buy DEC with all sorts of cryptos. That's mostly anecdotal from the Discord, but I think the bump we've seen in Steem:BTC is probably due to the DEC frenzy. It's been very profitable so far and I think that's going to continue.

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