How the Splinterlands ECONOMY Works (Strength and Survival)

Best regards Splinterlovers 💚

Splinterlands, like all blockchain-based games—in what is currently known as “Web3”—has experienced an explosive boom driven by initial speculation and, of course, the “attention” a project generates at the outset; however, over time, everything eventually crashes, the token undergoes hyperinflation, and this is even more pronounced when a “bear market” hits, But what sets Splinterlands apart from other games is that, despite going through several bear market cycles, it’s still going strong. It’s been eight years since its launch, and they’re still building.

But for anyone who wants to explore the project—to understand how the game’s economic machinery works and all the details that have allowed it to continue developing and growing as a game, including the things that new players and future investors want to know—that’s why everyone should learn firsthand how this game’s economy works. It might seem a bit overwhelming at first, but once you grasp it, you’ll see its “strengths” and how it could continue to improve over time.

That’s the goal of this post, so if you want to learn how the game’s economy works, you’ll want to stick around until the end of this post:

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Architecture and Operation: The Splinterlands Multitoken System

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Unlike traditional games that try to force all their transactions through a single hyperinflationary token, the Splinterlands economy operates as a coordinated system of multiple assets—which some might think are too many— but in reality, they are all interconnected and support one another to a certain extent, so that each token and resource fulfills a specific role with the goal of preventing uncontrolled dilution that could trigger a death spiral.

With that in mind, the main tokens that make up the Splinterlands economy are as follows:

SPS: The Heart of Governance and Performance

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• Main Function: It is the native governance token of the game’s ecosystem and grants direct voting rights on decisions made by the DAO, which manages the community treasury and funds development proposals that enhance the game’s utility and enjoyment, while also focusing on economic decisions aimed at ensuring the game’s long-term survival.

• In-Combat Utility: Simply having cards isn’t enough to earn liquid rewards; players must stake a certain amount of SPS, which is locked and generates an annual yield that currently stands at around 8%, while also maximizing the reward multiplier that helps you earn more SPS per battle.

• Active Deflation: The protocol allows for the voluntary burning of SPS rewards in Silver leagues and above to double reward points in Glint, removing circulating tokens from the market in exchange for card progression—one of the most necessary and intelligent updates ever created.

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Dark Energy Crystals (DEC): The Transaction Fuel

• Main Function: It is the internal in-game token used to purchase packs and rent decks both on the main marketplace—which is within the game interface—and on secondary marketplaces created by third parties, such as “Peakmonsters,” among others. It is also used to pay for costs associated with “Land Plots,” among other minor uses, although I’ve already mentioned the main ones.

• Pegging Mechanism: The token protocol—or whatever it’s actually called—was designed so that the value of DEC is pegged at approximately 1,000 DEC = $1.00 USD. When demand for DEC increases and its price exceeds the aforementioned parity, the system triggers the burning of SPS to mint new DECs. This means that if the price of DEC stabilizes—which is what we all want—or even exceeds that level, more SPS will be burned to mint DECs.

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Vouchers: Access to Scarcity and Prestige

• SPS Distribution Through Staking: For keeping your SPS staked, 40,000 vouchers are distributed daily, allocated to users who keep their SPS locked—approximately 20,000 per day. In addition, those operating validator node licenses also receive the other half (20,000 per day). Therefore, SPS not only provides you with a native annual return but also grants you VOUCHERS that you can use or sell for DEC within the game itself.

• Utility and Burning: These provide priority access to presales of new editions, exclusive promotional cards, and discounts—or at least that’s what they were created for, and so far, they’ve worked well. To prevent hoarding and ensure users don’t constantly try to speculate, every transfer of Vouchers between players automatically burns 12.5% of the total sent, making it a deflationary asset. So, if we look at it closely, it’s tied to the entire ecosystem, especially SPS.

Why Does Splinterlands Survive Bear Markets?

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Generally, when we enter a bear market cycle and the price of Bitcoin drops by between 50% and 70%, many games built using blockchain technology have disappeared. This is because the rewards from these games have no backing whatsoever, so they end up vanishing along with all the users who sell their assets and flee the project—triggering what’s known as the “death spiral”—and ultimately, everything disappears.

But the question we all ask ourselves is: Why does Splinterlands manage to survive even during the market’s worst moments? Well, the answer lies in four fundamental pillars:

The 4 Pillars

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• BCX Fusion: In many similar games, the downfall of the game always begins with “card inflation”; in Splinterlands, this is controlled thanks to BCX and card fusion.

• The HIVE Technology Layer: HIVE is one of the best blockchains—even if it’s not widely known—with zero transaction fees and transactions that process in seconds.

• The “Lands” Meta-Game: Lands have a lot to offer the game; in fact, the collateral we must stake in DEC and the burning of cards via CINDER to craft Time Crystals make everything make economic sense.

• Governance and Validator Nodes: The best part of all this is that the game doesn’t depend solely on arbitrary decisions by its creators, but rather on the community, thanks to the SPS trend and the proposals that are being put forward.