SPS Governance Proposal - Amend SMC Contract and Define Strategy
Published on HivePostify by @sps.dao · Thu Jul 09 2026
Table of Contents - [Introduction](#introduction) - [Change Order](#change-order) - [Quarterly Payment Rules](#quarterly-payment-rules) - [Treasury Management](#treasury-management) - [Change SPS Conversions](#change-sps-conversions) - [Conclusion](#conclusion)
Introduction
The purpose of this proposal is to make adjustments to our ongoing contract with the Splinterlands team (Steem Monsters Inc) to ensure that the SPS DAO can continue its pursuit of ownership of the Splinterlands IP as well as realign incentives for both the SPS DAO and the Splinterlands team to promote a healthier game economy. There will be a major cut to the price that the DAO is paying and some necessary concessions that will need to be made to make this offer both realistic and functional. The validity of this proposal will ultimately be contingent on the Steem Monsters Inc Board of Directors accepting the proposed terms. My understanding is that is unlikely to be an issue, but if it becomes an issue we'll have to reconsider our approach.
While I prefer to not make multi-layered proposals like this, I do believe this is an instance where it's necessary. We're asking the team to take a major reduction in revenue to ensure the long-term stability of the project and our DAO, so we will have to make some compromises to ensure that our ask is viable from their standpoint as well.
This is going to be a very long one. I encourage you to use the Table of Contents above to help navigate to specific sections. Without further ado...
Change Order
CONTRACT AMENDMENT / CHANGE ORDER
Date: July 15, 2026 Client: SPS DAO (the 'Client') Company: Steemmonsters Corp (SMC) (the 'Company') Reference: Scope of Work (SOW) – Contract Administration and Operational Services
Pursuant to Section 'Client Change Request Procedure' of the Agreement, this document serves as a formal written Change Order to amend the active Scope of Work between the Client and the Company. Upon mutual authorization, the terms below will modify and supersede any conflicting terms in the original SOW.
1\. REVISED TERMS & COMPENSATION
The parties agree to modify the financial terms and performance thresholds as follows:
\ Daily Operational Payments: The daily operational funding rate is hereby reduced from $5,500 per day to $2,000 per day. \ Incentive Split Threshold: The 50/50 incentive split threshold is lowered from $4.8M over two (2) years to $1.65M over the total two-year contract term. These amounts shall be payable based on the Quarterly Payment Calculation (QPC). \ Future Pack Sales: 2% of the main core edition will be paid to SMC so they can incentivize employee/contractor retention.
2\. AMENDED DEVELOPMENT SCOPE
The broad development scope previously outlined in the original proposal is hereby replaced with a focused delivery model. The Company's deliverables under this amended SOW shall be strictly limited to:
\ Core-set delivery \ Reward-set delivery \ Day-to-day operations management
3\. EFFECTIVE DATE AND PERFORMANCE
Except as explicitly modified herein, all other terms, conditions, and provisions of the original Agreement and related Scopes of Work remain in full force and effect. Pursuant to subsection (e) of the Client Change Request Procedure, the Company will commence performance under these revised terms immediately upon receipt of the mutually executed Change Order.
Quarterly Payment Rules
1\. Overview & Total Contract Value
The total financial cap over the 2-year contract duration is set at $1,650,000, split 50/50 between the parties. To smooth out cash flow and reward outperformance during the contract term, payouts will be determined using the Quarterly Payment Calculation (QPC). Reconciliation.
Note: The QPC is an interim mechanism to manage quarterly distributions based on projected trends. A final reconciliation will be conducted at the end of the 2-year contract term against full, actual sales results to ensure total payments match the final agreed-upon contract obligations.
2\. Sales Categorization & Baselines
To account for massive spikes during major product launches, the contract breaks monthly sales data into two categories to establish a rolling baseline:
1. Core Set Sale Months: Defined as the first two (2) months that a new core set is on sale, including its presale period. These two months carry a combined cumulative baseline of $1,000,000. 2. All Other Months: Any month not defined as a Core Set Sale Month. These months carry a fixed baseline of $30,000 per month.
The total baseline target across the entire 24-month contract is $1,660,000 (consisting of one two-month $1.0M Core Set block and twenty-two $30K standard months).
3\. The Quarterly Payment Calculation (QPC) Rules
At the end of each quarter, a QPC review will be conducted to determine if actual cumulative sales have exceeded the calculated baseline for that period.
Distribution Trigger: If actual sales exceed the baseline for the quarter, and no prior payment arrears (ie. unmet baseline objectives) exist, the SPS DAO will distribute 50% of the sales volume that exceeds the baseline (the "Distributable Amount"). No Double-Counting: Once sales above the baseline are utilized to calculate and trigger a quarterly payment, those specific outperforming sales volumes are locked and cannot be counted toward meeting baselines or triggering distributions in future quarters. Mid-Quarter Core Set Crossings: If a Core Set Sale begins during a quarter but its initial 2-month window is not yet complete by the end of that quarter, the QPC for that period will include the full $1,000,000 Core Set baseline, plus the $30,000 baselines for any other individual months in that quarter. Consequently, the following quarter's baseline will only account for its standard "All Other Months" ($30,000/month) \- less one month, as the Core Set baseline was already absorbed.
4\. Baseline Distribution Schedules (Examples)
The following tables demonstrate how the quarterly baselines shift depending on when a Core Set Sale goes live.
Scenario 1: Core Set Sale Launches in December 2026 (Q4 2026\)
In this scenario, Q4 2026 absorbs the $1.0M Core Set baseline plus two standard months ($60K), creating a large baseline hurdle that must be cleared before distributions occur.
| Example 1 \- set sale goes live on Dec 2026 | | | | | :---- | :---- | :---- | :---- | | Quarter | Months | Q Baseline | Total Baseline | | Q2 2026 | May, June | $60k | $60k | | Q3 2026 | All | $90k | $150k | | Q4 2026 | All | $1.06m | $1.21m | | Q1 2027 | All | $60k | $1.27m | | Q2 2027 | All | $90k | $1.36m | | Q3 2027 | All | $90k | $1.45m | | Q4 2027 | All | $90k | $1.54m | | Q1 2028 | All | $90k | $1.63m | | Q2 2028 | April | $30k | $1.66m | | Total | | $1.66m | $1.66m |
Scenario 2: Core Set Sale Launches in January 2027 (Q1 2027\) In this scenario, the large $1.0M baseline hurdle shifts smoothly into Q1 2027 because the launch falls perfectly into the new quarter.
| Example 2 \- set sale goes live on Jan 2027 | | | | | :---- | :---- | :---- | :---- | | Quarter | Months | Q Baseline | Total Baseline | | Q2 2026 | May, June | $60k | $60k | | Q3 2026 | All | $90k | $150k | | Q4 2026 | All | $90k | $240k | | Q1 2027 | All | $1.03m | $1.27m | | Q2 2027 | All | $90k | $1.36m | | Q3 2027 | All | $90k | $1.45m | | Q4 2027 | All | $90k | $1.54m | | Q1 2028 | All | $90k | $1.63m | | Q2 2028 | April | $30k | $1.66m | | Total | | $1.66m | $1.66m |
Treasury Management
A vote FOR the proposal will authorize the DAO Manager to follow the stated objectives.
SPS DAO Treasury Management Objectives
1\. Impact of Funding Reductions to Steemmonsters Corp (SMC)
Following a reduction in daily funding from $5,500 to $2,000, the DAO anticipates a significant shift in its funding requirements. Currently, funding is distributed through two primary mechanisms:
DEC-to-CREDIT Matching: Distributing Dark Energy Crystals (DEC) to the team to match liquid CREDITs purchased in-game. Alternative Token Disbursements: Paying out external, non-Splinterlands tokens.
While the "DEC for CREDITs" conversion was initially projected to average roughly $2,000 per day, the actual daily rate consistently exceeded this estimate during the first two months.
Due to the reduced funding cap established by this SMC contract amendment, the DAO must adopt a more proactive approach to treasury management to ensure DEC distributions align efficiently with actual needs.
SMC will initially handle trade executions for the DAO Manager. However, the DAO may replace SMC with its own Designated Treasury Manager (DTM) at any time.
2\. Treasury Management Objectives
Primary Objective (Asset-Liability Matching): The fundamental goal of treasury management is to balance the DAO's liabilities with its available assets. When a mismatch is anticipated, the DAO Manager is responsible to notify the DTM to start actively swapping assets to mitigate the shortfall.
Secondary Objective (Fund Replenishment): The treasury aims to replenish depleted reserves and restore baseline asset levels for each token. For example, if stable coins or DEC are utilized for payments, the DAO Manager will instruct the DTM to prioritize restocking these specific assets when allocating excess funding.
Tertiary Objective (Excess Capital Allocation): If the DAO has fully secured its historical and projected funding requirements, any remaining excess funds will be allocated toward building future reserves and executing buybacks of stable coins, DEC, and/or SPS.
Authority & Execution
The DAO Manager holds full administrative authority to instruct the DTM with direction in order to fulfill the primary and secondary objectives (Asset-Liability Matching and Fund Replenishment).
Tags: #spsproposal#spsdao#splinterlands#sps#governance#dao#treasury