It happened. You briefly got more DEC by burning SPS than by swapping.

Disclaimer - this was at 8:50am in Quito, Ecuador time - the sell for DEC has dropped since then, but for a little while, as the screenshots show, it actually happened.

DEC is meant to be at peg at 0.001$, meaning that 10 DEC should be 1cent of USD. That wasn't the case for a very long time. But today, it finally happened. The sell orders for DEC were above the 0.001, at 0.0012302$ (and a little higher just before, as you can see in the screenshot of the swap).

Even the bid price is already at 0.0009, so very close as well - since it has quite a bit of volume due to it's value in Splinterlands, bid and ask are usually quite close.

I've been a constant buyer of DEC for a month now, 1000 DEC each day, and recently started buying 100 SPS each day as well, after I understood the mechanism that might be triggered, soon.

To get DEC, you can either buy it on the Hive-Engine or other platforms and transfer it into your Ingame-Account, or you can burn SPS within the Splinterlands-Game to get it. Usually, you get the warning "It's cheaper to swap on the market!" when trying to burn - which was true, for a long time. Today, it was the first time that it wasn't. I checked my account in order to do my regular buys, and saw the price for DEC being at 0.0054 HIVE - I was paying 0.0032 just yesterday. So quickly checked the swap, and it was only 4,5 DEC per SPS - a while ago, it was at around 10 DEC per SPS, as you can see here:

This image is from a post I made only 2 months ago: Click here for the post.

The SPS-DEC ratio has halved (or doubled? from 1/10 to 1/4.5? I think it's doubled as it's more...) since then. And for the first time since I'm aware of these mechanisms, which admittedly is not that long, it's better to burn SPS ingame than to swap it on the Hive Engine. Wow.

Burning gives you 6,6 DEC per SPS, that's 50% more than swapping. Amazing. Now, what will happen?

a) the price on the Hive engine is already adjusting. While writing this post, and I really try to write quickly, the ask already went down to 0.0038 Hive per DEC, so 0.00095 $cents per DEC. That is below peg, and the swap is accordingly.

b) if it wouldn't - people would either use their current SPS to burn, or BUY new SPS in order to burn it for DEC instead of swapping. That would bring the price for SPS up, and hence lowering the amount you get through burning, as that is attached to the SPS market price as you can see in the picture above.

That is basically the flywheel, if I understood it right from all the YouTube videos from @aftersound that I listened to (highly recommended channel!). It's an upward spiral. As long as DEC stays above peg, it's cheaper to buy SPS and burn it to get DEC. That rises the price for SPS, making it cheaper to buy DEC on the market again, which rises the price for DEC which makes it cheaper to burn SPS and so on.

Please correct me if I'm wrong! But I do hope I'm right and finally understood how this stuff works... 😝