My smart friend @reeta0119 just wrote a nice analysis of Splinterland's SPS governance token. I think that for most people, the 2 things she talked about are the reason people like to buy and hold SPS - the higher rewards you get from playing the game, and the 13% interest rate. For people that are near the top of the SPS rich list, they probably also like the governance aspect. They have so much SPS that they can have a big say in whether a Proposal passes or fails. People with low to middle amounts of SPS can't really change the outcome of Proposal votes.
So on rewards and the interest rate, I'll give my opinion, and of course it is just an opinion. Other people will have their opinions and I always respect the opinions of other people.
Then I'll list some things I think might be worth thinking about if you are considering stacking SPS, and how that might compare with stacking HBD.
SPS Rewards
It seems to me that it takes a Lot of SPS to really change our game rewards much. I think if we're near a boundary where getting a little more SPS can move us from say Silver to Gold leagues, then it probably makes more sense to go ahead and get the SPS needed. But if you're just moving up a bit in a league, I don't think getting more SPS is going to matter much.
SPS vs HBD
If we Stake SPS or if we put HBD in Savings, then we will earn interest on the amount staked or in savings.
On the SPS 13% interest rate, we know that that rate was much much higher in the early days of SPS. Now we are down to this 13% rate and that is still a good rate of interest and it doesn't really seem to be changing much anymore. I think when people are interested in SPS mainly because of this rate of interest, they can decide between SPS and HBD. So we know that SPS pays 13% which can change based on how much SPS people have staked, but as I have said it seems pretty stable at 13% lately.
HBD pays 20% interest.
That could also change but it can change due to different reasons. HBD interest rate can change if the witnesses vote for a different rate. The only thing non-witnesses can do is to change their witness votes. They can vote for witnesses that are calling for the interest rate that they agree with, and un-vote other witnesses that want a rate they do not agree with. But a rate change is very rare and although there has been some discussion lately about the merits of changing the rate, it seems many of us think the rate should stay right where it is, for now.
Actual Interest Rates
We receive HBD interest once a month. If we do the math, we see that the compounded interest rate is
(1 + (0.20 / 12)) ^ 12 = 1.21939
or about 21.9% interest per year.
We can claim SPS rewards daily, and maybe some part of them even more often. But going with daily claims the compounded interest rate is
(1 + (0.13 / 365)) ^ 365 = 1.138802
or about 13.9% interest per year.
At these rates it would take about 42 months to double your HBD and 65 months to double your SPS.
Price Changes
We have seen that the price of HBD is very stable over the last about 2 years. It stays mostly within plus or minus 5% of $1. This is mainly due to the hbd stabilizer bot. Although requested funding for this bot has decreased recently, it is expected to still be able to keep the HBD price near $1. So if this stable trend continues, we can expect our future HBD to be worth the same as it is now, about $1.
However SPS changes in price due to market conditions and the amount people stake. We have seen it at $1 but we have recently seen it near a penny. Now it sits above 3 cents and the coming Bull market could drive it back near All Time Highs as Alt coins rally and players come to play #splinterlands. It seems likely that there sill be a time in the future where you could sell any SPS you bought today for more than double the price, which you would have to wait 65 months or over 5 years to achieve if you earned enough interest to double your SPS and the price remained unchanged. The risk is that SPS never does double in price from its current trading value. If it goes down in the future then the interest you could earn from it would hedge your losses in price per SPS.
Liquidity and Sellability
Both tokens are fairly liquid on hive-engine for the average investor. But trying to trade too many tokens at once will cause slippage in the price you will trade at.
Both tokens can be traded or swapped on both hive-engine and tribaldex. There have been sporadic issues with these frond ends lately but they are usually quickly corrected. I think it is likely that we will be able to trade either asset for SWAP.HIVE and then to SWAP.BTC or SWAP.LTC or SWAP.USDT with little problem in the future.
In addition, you can find other markets for SPS athttps://coinmarketcap.com/currencies/splintershards/
and other markets for HBD athttps://coinmarketcap.com/currencies/hive-dollar/
although currently the only HBD market available is the HBD/BTC pair at Upbit.
Borrowing against SPS or HBD collateral
Some say that it is better to #neversell your crypto but to take a loan out against it if you would like to make use of the value of your tokens. Advantages may include having capital to use now while still participating in future price pumps if they come, as well as possible tax savings as loans may not incur the same tax events as sales.
It is already possible to borrow against #ethereum assets on Liquity and against #pulsechain assets on Liquid Loans. Liquid Loans just launched but is a fork of Liquity which has been operational for years.
It is entirely possible that #hive will have #hivebonds someday soon in which we can obtain higher interest rates on staked HBD for longer time periods. It is possible that SPS or any hive-engine token could do something similar if hive-engine or some other project provides the mechanism to do this.
When you provide a quantity of tokens as collateral for a loan, you may find that there is a minimum ratio of value to loan which you must exceed or else your collateral will be liquidated. In Liquid Loans that ratio is 110% however many people prefer to keep the ratio at 150% or higher to avoid liquidation. One must also consider any fees or interest payments. Liquid Loans requires NO payments on their loans and will assess no interest. But there is a fee to originate or end a loan.
Utility as Currency
Right now, you can buy certain things in the Splinterlands game with SPS or use it for better rewards when playing the game. Since you can buy things with it, it can be considered a currency but in a very limited sense and scope.
Right now you can use HBD in dozens of stores in Sucre Venezuela to buy whatever the stores are selling. You can find many articles about this on https://peakd.com/@hivesucre so HBD is more like a common fiat currency in some parts of the world.
Conclusion
You might decide to hold SPS and/or HBD based on the above discussion as well as other things that you may like about either token. Feel free to comment your thoughts!
As to which might be "better" than the other, it depends on which has more utility for you now and possibly in the future, as well as whether you think the price of SPS will be higher or lower than it is now. The price of HBD could also go up or down but it is designed to stay near $1.
If you think SPS will do a 30X to get back near its All Time High, then that is the token for you to consider stacking! If you're not thinking that SPS will go up and you want stability at a good interest rate then maybe HBD is for you!
NOT INVESTMENT ADVICE, just opinions for entertainment only!
Posted Using InLeo Alpha
