Will you buy Validator license?

In about 6 days' time, SPS validator licenses will kick off the first round of sales. In this presale, each validator will be sold for $1000 worth of SPS and 500 vouchers.

At the time of writing, each validator will cost roughly $1.750 and that is quite pricey. However, the question is, will it be worth the money in the long run?

Validators will ensure the running of the game while paying the holder SPS rewards for their input. As an investment, I have to admit, it is quite fair, especially at the current price in this round of sales.

I think around 375000 SPS tokens will be paid out to validators and nodes every day. Considering the price right now, I'd say getting validator nodes is a steal.

Assuming the price of vouchers remains the same, this round of sales will be about $1,250 cheaper than the next round of sales. I don't think there's a chance that vouchers will start trading for $4 at any point soon, so $3k per validator is not attainable in this round.

In the past couple of days, the price of vouchers pumped up to around $2 though, and at that price, you'd be spending around $2k per validator node.

For what it's worth, that's still a fair price, with all things considered. I mean, this is an asset that has the capacity to pay reward for at least another 5years at least.

SPS reaction

This first round of sales will offer 2000 licenses in total. Assuming it sells out in record time, that means about $2m worth of SPS would have been pumped into the game. At the current price, that's about 22.22 million SPS and remember that 80% of the SPS used to purchase licenses gets burnt, so that translates to about 17.8 million SPS tokens burnt.

The calculation in the previous paragraph was under the assumption that the price of SPS is stagnant. In reality, it will most likely change during the period.

Assuming the Splinterlands market/investors take the idea of validator NFTs in their stride, we could be either burning a decent chunk of the SPS supply or this even will lead to an unprecedented SPS pump.

If I was a gambling man, I'd put my money on the price of SPS experiencing a mild pump in the coming days. Then again, there's a bit over 378million SPS tokens held liquid right now, which is more than enough to buy out the first three round of sales, regardless of the price of validators.

Alternatively, it is also possible that the amount of SPS tokens staked will also reduce dramatically. This scenario is based on the chances that SPS pumps after a decent chunk has been burnt through the sale of validators. In this scenario, I don't think we'll see SPS making any dramatic positive move.

Generally speaking, I think burning SPS will contribute positively to the health of SPS tokens. I suspect that somewhere down the line, especially when SPS goes out of print, and these burn mechanisms still exist, we'll see some serious price movement.

For now, though, validator licenses will be the first of many attempts to reduce the amount of SPS in circulation and there will be a lot more to come. By the end of the sale of Validator licenses, there will be a considerable impact on the price of SPS tokens in particular.

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