Good morning Splinterfriends,
I want to elaborate on something and I cannot stress enough why we do NOT change anything else in the rental market for at least a few months.
I urge each and every one of you to read this in its entirety, consider what has happened over the previous 3.5 years and then recognize the implications and effects changing multiple variables in such a short time will have.
I will use dividers to separate each point, as they are all important individually but vital to understand how they work as a whole.
No memes. No GIFs. No Laughs. Straight up and to the point. Evidence Based Reasoning. Lets go... and oh yeah 100% of Rewards are going STRAIGHT TO @SPS.DAO
I started playing this game in October of 2021 and like most of Chaos Legion (I'm beginning to think of the players who joined at that time to be the Chaos Legion)... I aped in because I saw some amazing potential with this game!
Own the Cards - awesome!!
Diminishing Supply because Leveling Up - amazing!
RENT THEM OUT?!? - Holy Cow!!!
Play 2 Earn - incredible!
Everything looked great... but... things went wrong, bear markets happened, overprinting, etc, etc, etc...
If you're still here, like me, you either REALLY BELIEVE in this game... or you're a glutton for punishment.
One of the things that I noticed was day after day... my Rental Income was dropping... even though I would add more cards to Rent... Diminishing Returns :(
So I did some thinking and some experimenting. We had this Bot issue... where they would rent out 1 BCX Cards for .1 DEC, the arbitrary floor of Rental Prices.
I made an account @pointonedec and loaded it with 1 BCX "Playables" for cheap... lo and behold, it had great ROI! 60-70% at times!! YEE HAW!!
But we still had a bot issue... so I wrote and paid for the "1 DEC Rental Floor" proposal. There were several reasons I concluded that this would have a POSITIVE effect on the ENTIRE ECOSYSTEM.
If we have a bot problem and they are "extracting value" but are renting 100% of their cards... all we need to do is up the cost of renting and then the value extraction is ELIMINATED.
If bots continue to rent at the new floor of 1 DEC, then all RENTERS will be happy because they are now making 10X Returns from the Bots, extracting value FROM the bots... not the bots extracting value from the system.
Additionally, if it costs 1 DEC to LIST a card... why should I need to rent out my card for TEN DAYS before I see profit? Many cards listed at .1 DEC failed to rent at 60 Days and would be pulled from the Market... at 1 DEC List and 1 DEC Floor... with 2 Days Minimum Rental... we, the Renters aka Card Owners... would see profit after 1 Rental!
Perhaps one of the most important reasons I wrote the proposal was the STRONG CORRELATION between Rental Floor and Card Price. This is ABSOLUTELY VITAL TO UNDERSTAND and I don't think ANYONE has made this connection yet.
If a player has a choice Buy vs Rent... at first, they'll probably take the cheapest option as it is the less risky option. Examine this scenario with me:
So let's say, as a new player, we see a 1 BCX Djinn Biljka for Rent and it is listed at .1 DEC... and there are LOTS of them out there to rent...
Then we go look to buy one... But they are $.30 to $.40 or so... per bcx... Why on earth would be BUY ONE???
1,000 DEC = $.70 USD... 100 DEC = $.07 USD... 1 DEC = $.0007 USD and .1 DEC = .00007 USD...
Even if we rented out a 1 BCX Biljka for 365 days straight, at .1 DEC that's 36.5 DEC or $.0255 USD per YEAR in Rental Income... $.40 BCX Purchase... or Rent one for a YEAR for $.0255.
The choice is CLEAR... Rent the Biljka. FOREVER.
Worse, the benefit to level up the cards isn't there because it is ALWAYS... ALWAYS a "Race to the bottom"... So if I can rent a L1 for .1 DEC/day... but the L2 doesn't give me much benefit over the L1... Guess what the price to rent the L2 will be???
.1 DEC... maybe .110... but again - race to the bottom...
L3... a little higher... maybe?
L4... Hopefully higher, right? Well yeah... but here's the thing... With 11 BCX invested in a Max Level Biljka... that's $.40 * 11 = $4.40... so let's say it gets rented out at 11 * the 1 BCX... 1.1 DEC/day... That's still pathetic. Not profitable and definitely NOT WORTH INVESTING IN.
Speaking of "investing"... lets look at it in reverse, from the investor standpoint... why would I ever, EVER want to invest in something with a 5-6% ROI... when there are much better options out there???
However... what do you think happens to card prices when investors realize... "Oh wait, with a 10X increase in Rental PRICES my ROI just jumped 10X... 🤔😯😱
Before the 1 DEC Floor was implemented, you could rent L4 Djinn Biljkas ALL DAY at 1-2 DEC per day (or less)... which given the 100% rental rate (not happening btw)... would earn 2 * 365 = 730 DEC/year or $.511 USD per year... so maaaaaybe 11% ROI at 100% rental at 2 DEC... but more likely it was 1 DEC and you were lucky to have a 50% fill... (ask me how I know).
Again - why on Earth would an investor look to purchase something with a 5-6% ROI or less? Again.... They wouldn't.
With no demand for a card... there is no driving force on the price... but look across the board... look at ALL RENTALS... the LOWEST APR is about 5% ROI on average. There are obvious outliers due to super valuable cards etc...
But... on average, you see a 5% ROI for most of the barely playable cards... so... let's move on to the next phase here...
Ok... pre proposal rent prices and thus, card values were a race to the bottom... the bottom was the arbitrary floor of .1 DEC, which meant you needed 10 Days of Rental to break even... this is asinine. In addition, players - especially new ones will Rent vs Buy when the price is super cheap...
This resulted in declining card values and little profit from owning the cards... which does not entice investors AT ALL.
So... we shall continue to use the Djinn Biljka example...
Previously you could rent them out for prices like:
L1 - .1 DEC/day
L2 - .2 DEC/day
L3 - .35 DEC/day
L4 - .875 DEC/day - I often saw max level Biljkas under 1 DEC/day but usually they were around 1-2 DEC.
Not long ago, we implemented the 1 DEC Rental Floor Proposal... and naturally I ran a test using my Land Alt @brodo-swaggins - I had acquired some cheap Biljkas awhile ago but DIDN'T EVEN BOTHER RENTING THEM BECAUSE IT WASN'T WORTH IT.
However... yesterday I wanted to check and see if my hypothesis was correct:
"I believe by raising the floor it will have several effects... including increasing the prices to rent a Max Level Card proportionally...
The thinking was simple... if a L1 rents for .1 and a L4 rents for 1... well... shouldn't that same multiplier apply at 1 DEC?
1 DEC for L1... 10 Dec for L4... it is 11BCX and more useful... RIGHT???? Weren't we sold on the idea that our cards SHOULD be leveled up and stuff... "Race to the TOP" and all that... yeah... well @pointonedec proved it was far more profitable to "Race to the bottom"... and our card prices followed.
Well guess what...
I don't just "assume" things... My degree is in Cellular Biology - which means I apply the Scientific Method to most things like this. Furthermore I use critical thinking skills, logic and DATA to assess whether or not something is or is not working.
Guess what - the .1 DEC/day Rental floor was working... if the goal was TO DRIVE CARD VALUES TO NOTHING.
We recently implemented 1 DEC/day minimum and you can't rent out these cards for Land (Daily)... and Survival Mode hasn't even hit yet!!
Now... as an investor... imagine you saw FIFTY PERCENT ROI... WHAT WOULD YOU DO???
Now... I am not an economics major... but if demand for something DRASTICALLY INCREASES AND SUPPLY IS FIXED... PRICE DOES WHAT?!?
What happens next, assuming the proposal Season Rentals Only doesn't pass... is someone realizes that the floor value of these cards is going to SKYROCKET.
Why... Here's WHY:
- Survival Mode - sure, maybe?
- Land - these are not the first choice for workers, because of how Land PP works
- A FIFTY PERCENT ROI FOR FIRST MOVERS...
I know, I know... I said no GIFs... but I felt that one was warranted.
Apparently... no one has realized the effect that .1 -> 1 DEC Rental Floor has had on Rental Prices yet...
The moment someone DOES... goodbye Cheap BCX...
UNLESS OF COURSE WE DO SOMETHING INSANE LIKE CHANGE THE ENTIRE STRUCTURE OF THE RENTAL MARKET
We finally and I mean finally... after THREE AND A HALF BRUTAL YEARS OF GETTING BEAT DOWN... saw a positive uptick in the Rental Market and will probably see a corresponding uptick in Card Prices due to the newly available ROI opportunity...
Ok... so after like 8 months, the proposal I submitted AND WAS PASSED... was finally implemented... three days later... without actually looking to see that almost every single one of my thoughts and reasons for implementing the proposal were happening...
There is ANOTHER proposal to change the Rental Market... AGAIN.
Are you serious? Like are you ACTUALLY SERIOUS? Here are my MAJOR concerns with this:
- NEVER. EVER change multiple variables in a multi-variable equation. That is super basic "F#$%#$ duh" level reasoning when systematically trying to improve something.
We finally changed a Variable - the Rental Floor. Guess what... look back at what I said was going to happen: My Proposal
Don't feel like looking? Want to keep your head in the sand - too bad, here:
Ok... well so far... I was RIGHT... My Biljka is renting at 10 DEC/day or FIFTY% ROI!!! That's the first time IN YEARS... YEARS that I've seen an ROI like that FROM A CHAOS LEGION REWARD CARD!!!
HELLO - ALARMS SHOULD BE RINGING... IN A GOOD WAY... NO WAIT... THOSE ARE CHRISTMAS BELLS!!!! HALLELUJAH I F$%^$% FIXED THE CL ROI DEBACLE!!!!
With 50% ROI on the table... Investors should jump on that and price will level out... and I bet the ROI drops to around 20%... which would mean the price of a Max Djinn Biljka would be... 10 DEC/day * 365 = 3650 * 5 = 18,250 DEC or so... which is THREE HUNDRED PERCENT more than current prices!!!!
But let's look further!!! Maybe I was wrong about the Heatsmiths and Gargoya Lions and all that... What has the Rental Price done for them??? Are they renting at 1 DEC? Or are they renting for more - tbh, I hadn't even looked at that yet, I was so pumped about Biljka and SO PISSED about another possible change not even a week later!!
Oh... look at that... L10 = 2 @ 1 DEC... then 1.83 DEC/day!! Everything else is 1 DEC... Guess you should level those cards up!! At current prices, 1.83 DEC/Day is TWENTY FIVE PERCENT ROI!!!
A couple left at 1 DEC for the Max Level and this is arguably the most played CL Reward Common... but then look... 1.921 dec or 22% ROI... even the L9's are seeing > 1 DEC/day!
I'll spare you the rest but let's look at the TRASH... Heatsmith... Gargoya Lion... straight up Bantha DOODOO and failed to rent multiple times when Max Level RF were listed for .1 DEC... Are we seeing ANY of them > 1 DEC??? Or did they just MINIMALLY increase 10X ROI by jumping to 1 DEC/day??? Let's look!!
Nope - straight up garbage but yet... 1 DEC for the Max Level means if they do rent ONE TIME in the 60 Day Window... The Renter Made Profit... But guess what... ALL other Gargoyas UNDER Max Level... Now have ZERO incentive to stay there... BETTER LEVEL THEM UP!!!
Just like we thought... 1 DEC for a Max Level... all others should level up or will probably never be rented... better level them up!
But wait... what happens if a Level 1 IS rented ONCE for just two days... 2 DEC - 1 DEC Listing fee = 1 DEC Profit... Ok... and?????
Hold up... you're telling me... if a 1 BCX Shitsmith somehow rents out for 15 Days... I can buy another one...
That means not only is the "Yearly ROI %" on that absolutely ABSURD... 2,620%?!?
But that also means one single Rental (2 Days - 1 DEC Fee) = 1 DEC Profit or 1/14 Cost of 1 BCX Venari... or that is a 7% ROI for A SINGLE RENTAL... 2 Rentals in that period = 21% ROI... HOLY CRAP!!!
Do you understand the implications of this??!?!? Rentals can FINALLY be Profitable and worth investing in!!! Naturally, the early movers would throw money at this... the price rises and Rental Profits Balance...
Did you catch that... THE PRICE OF THE ASSET WILL RISE IN ACCORDANCE.
It's not the other way around... whatever the cheapest route to access a card is... that will be the path of least resistance! So if it's possible to Rent a card at .1 DEC... expect to see the turds renting for 5% APR!
It was brought up by Bulldog and others that 1 DEC Rental Prices are "too much for players who want to try the game, even at Bronze"...
Ok... well I just went and put every single Chaos Legion, Promo, Riftwatcher and Non-Soulbound Reward Card in (I did add Marksrat and Fungus Flinger)...
My total for EVERY SINGLE CARD in Bronze League was 240 DEC/Day... That included 40 DEC for a Lux Vega...
But lets say for the "sake of the new player"... we pare it down... CL and Reward Only, Bronze Level... just to try it out... What does that look like?
Well... it looks like 136 DEC/Day... or 136 * .0007... which is $.095 per day...
I hate to say it but... if $.10/day is "too expensive" to try out every single card in the Chaos Legion + Reward Set @ Bronze Level... there's a couple things to note...
First - if they can't swing $.10/day... Splinterlands is not the right game. Splinterlands is expensive to play at any level, especially at higher level and to make any profit from at all, requires a significant investment... and $.10/day ain't it.
There are plenty of Free to Play games that will give them much greater dopamine rewards...
Second - "Increasing these costs 10x means they won't make any profit in Bronze..."
"Profit" would require Staked SPS and be .1 SPS per Win anyway... people are here to "Test out" SPS and they won't be worried about "Profit" on the pennies per day scale...
Again - the belief that "new players can't swing $.10/day to try out the game" is BONKERS...
On top of that nightshade.gg, developed by @doloknight has an amazing guide for new players on how to advance from Wood -> Bronze and not use ANY RENTALS!! Plus with Glint they can earn Soulbound Cards to enhance their collection...
Should they choose to rent... and hear me out on this... They can rent 50 of the top Chaos Legion Cards for 1 DEC each... and that's only $.035/day or yes... Three and a half pennies...
Furthermore... based on the evidence I provided... they won't be renting Bronze cards... They could Rent Level 3 Legendaries... Level 4-5 Epics... L7 Rares... L9-10 Commons...
Which means... they'll have a good shot at winning some games vs those L3 "Bronze" Cards...
For three and a half CENTS per day... That is NOT too expensive... But the CARD OWNERS... the INVESTORS... the people who chose to put their money where their heart was and BUY THESE CARDS... and RENT THEM OUT because they saw an opportunity...
FOR ONCE IN THREE AND A HALF YEARS... WE SEE A GLIMMER OF HOPE AND DARE I SAY DECENT RETURNS...
AND WITHIN A WEEK... A PROPOSAL AIMS TO SHOOT AN ARROW RIGHT INTO THE HEART OF THE RESULTS.
The proposal I suggested... is working... give it time before doing anything else or we won't have the ability to collect the proper data on the results from the first change.
Hell, the new proposal even existing AT ALL is going to cause an effect on the Market Data... The only effect the .1 DEC Floor had on card prices... was to lower them.
Old: 1 DEC List Fee, .l DEC/Day Rental Minimum = 10 Day Rental needed for Breakeven... this has no effect other than to lower card values. #Boo
New: 1 DEC List, l DEC/Day Rental Minimum = Fair and profitable results... Profit after 1 Rental!! This will INCREASE prices due to renewed demand via profitable Rental Opportunity (50%+ ROI). #Yay
1 DEC List Fee, Season Only Rentals @ .1 DEC/Day = 1.5 DEC/Season Rental = POINT FIVE DEC PROFIT PER SEASON... WHICH MEANS GOODBYE ROI AND ANY HOPE OF CARD VALUE INCREASE.
This literally reverts us back to the old system and will serve no purpose except to hurt card value. Why OWN when you can rent for 1.5 DEC/Season... THERE'S NO INCENTIVE TO BUY/OWN!
1 DEC List Fee, Season Only Rentals @ 1 DEC/Day = 15 DEC/Season which would follow my proposal in spirit and allow for profitable rentals thus increasing Rewards for CARD OWNERSHIP...
Here are my final thoughts on "Season Rentals" as the only Rental Method... and you may have noticed, as someone who's put THOUSANDS, TENS OF THOUSANDS of Dollars into this game because I BELIEVE in it... and despite Loss after Loss after Loss... has not only hung around...
BUT HAS PROVEN... WITH EVIDENCE... THERE IS A SOLUTION... and this solution gave me HOPE for a brighter future... a GREENER FUTURE... only to have another proposal heaped on THREE DAYS later...
I am angry. I am frustrated. I am sick of seeing decisions made that LOWER MY INVESTMENT... and then when I provide a solution... and it's working... seeing this new proposal is like a kick in the nuts.
It's like you guys are saying "Hey Dingus, thanks for providing a working solution... but even with these preliminary positive results proving you were right and being green across the board... we've decided to go back to doing things the other way... so... go f#$% yourself buddy WE LIKE LOSING MONEY!"
The short answer is passion... passion and frustration... but here's the Tl;Dr for you:
Old Rental System of 1 DEC List Fee & .1 DEC Rental Minimum = Bad for ROI, Bad for Card Owners, Deterred Investors and SUPPRESSED CARD PRICES... #Bad
New Rental System of 1 DEC List Fee & 1 DEC Rental Minimum = Good for ROI, Good for Card Owners, should inspire Investors to leap on ROI potential, BOOST CARD PRICES... #Good
1 DEC Card Rental Minimum is too expensive for new players!!!! Oh yeah?? 50 Cards at 1 DEC/Day = 3.5 PENNIES per day... Too expensive... #Wrong
NEWEST Draft Proposal = Season Only Rentals... if Rental Minimum = 1 DEC... then 1 DEC Season Rentals will NEVER hope for any meaningful return and it will NUKE any hope of Rental ROI or Card Value... #Stupid
4a. IF... and I mean IF the Season Only Rental Proposal will use the updated Rental Floor of 1 DEC PER DAY... meaning 15 DEC Minimum PER SEASON... Then there is hope. Hope for ROI... for Card Value... for "Rewarding Ownership"... because the old way... the old way should read "Rewarding RENTERSHIP".
With 1 DEC/Day Minimum OR in this case... 15 DEC/Season... There is hope for an increase in both Rental ROI and Card Value... #Hope...
Otherwise... should we revery to the old ways... they will continue to perform TERRIBLY... as they have been doing over the previous 3.5 YEARS.
Finally... FOR THE LOVE OF GOD... NEVER CHANGE MORE THAN ONE VARIABLE AT A TIME!!!
A + B + C = 100... If you change A... you can see the result on the answer and there are only THREE possibilities:
We IMPROVE towards our goal
We DECLINE away from our goal
We remain STEADY with no measurable difference or impact from the change.
After enough time passes... observe the results and then tweak B... then C... ONE AT A TIME until you achieve your desired results. THIS IS HOW IT SHOULD BE DONE!!
Anyways - I doubt this will have any effect at all and I probably just wasted half a day typing this out... but... what I suggested back in June... what was FINALLY IMPLEMENTED... and IT. IS. WORKING...
To change it now... would serve no purpose other than to shoot ourselves in the foot... no... we've already done that... several times... this would be akin to shooting ourselves in the knees... both of them.
For the love of God, either vote NO on Season Only Rentals... OR... Make Season Rentals 1 DEC/DAY Minimum (15 DEC/Season).
Cheers 🍻,
- CaptainDingus
PS - the solution to Rental Cancellation frustrations is simply to make it so the Rental is canceled... but the time remaining stays the same. Never understood why that was a thing...
Player: Rent for 10 Days... 10 Days Remaining...
Card Owner: Cancel Rental!
Player: Rental Canceled by Card Owner!... Time Remaining = 10 Days...
This literally solves that whole issue... and it's super simple.
Player keeps card for length of time (maybe we have a max Rental time of 30D?)
Renter can cancel and ensure they get their card back + remove it from market/renewals... but can't cancel, screw the Player over and relist just to make a few extra DEC...
I am definitely voting NO on that proposal.
I've discussed it with the team and my understanding is they'll be implementing season rentals at 1 dec per card per day. If the DAO wants to do something different, that's up to the DAO. I've shared my thoughts with you on this topic already.
This was good ranting! Upvoted
I think you are lucky because I have played the game and the truth is that I think I am very unlucky.
You think I am lucky
No one has ever called me lucky in Splinterlands before... 😇
There is a lot going on here. One thing I agree with you: we just changed one thing, we shouldn't be changing something else right away.
However, my agreement with you stops here. You're looking at very skewed data to come to your conclusion that a higher rental floor creates higher profits and higher card prices. If that was the case, we should increase the floor to 10, 100, or even 1000.
That doesn't work. Maybe if Splinterlands cards were as necessary for living as a house, but that's not the case. Fact: even max level CL (reward and even some core set) commons and rares were left in the rental market at 0.1 for a long time. Of course some were getting rented because no matter how overprinted they are, there were always some players wanting to rent them. The problem is that there were many more cards in the market than players interested in renting them. Even many max epics and legendaries rented for around 1 DEC.
So, on the first few days of the change being implemented you are seeing an increase in rental profits. But that's because the majority of the cards were kicked out of the rental market because they were below the new floor. Once people set back their cards, at the new floor, all those cards will be at the floor. Those Djinn Biljkas at 10 DEC won't last. In fact, there will be even less people interested in renting the cards at the increased prices. Sure, the ones that are lucky enough to get their card rented in the middle of 100s, will be in profit right away, but that's like gambling on the lottery but the prize is a few cents.
There's only an issue in making back the listing fee because the listing fee was implemented, something that should have never happened. I understand it was to prevent the relisting bots but why not pay the fee only when you're relisting the card? We could easily have the first listing of each individual card for the season be free and it would still stop relisting bots.
Anyway, the floor only matters for the overprinted cards, which will leave Modern in about 3 months. It's still a terrible decision but I'm used to those and at least they delayed it for several months.
We are mostly in agreement but here's the thing - I set them at various levels... and they were ALL rented...
Once people realize L1-L3 are renting at 1 DEC... 1.1 DEC etc... They'll change their listings and the ROI will stabilize... but across the board L4 Legendary Rental Prices are going up for CL Rentals... It is working and no amount of opinion can refute evidence.
Normally, I would be on your side - Free Markets are key...
But when you throw in Listing Fees and Bots... You no longer have a FREE MARKET and even though I am very Libertarian... Once you add in Fees/Bots - the "Free Market" argument goes right out the window.
But it's not a matter of opinion. It's a matter of giving it time. I appreciate you trying to look at the data and drawing conclusions from them. What I'm telling you is that it is too early to do anything like that and I have no doubt that the cards there were getting listed for 1 or less, will be listed for 1 DEC and it will be even harder to rent them out. In fact, if more people decide to combine to rent at max level, because it became even more difficult to rent out those lower levels, it might even pull down max levels that were renting slightly above 1.
I mean I don't want listing fees or bots so just take those away. Anyway, regarding bots, I believe you did this proposal before the Wild pass. With that, the 1 bcx bots don't exist anymore (or if they do they are not profitable).
Thanks for sharing! - @azircon
This was good ranting! Upvoted