L$ Dropping Precipitously Again

GOM is now down. Coincidence?

That *is* interesting. :/

I'm sitting at home in bed, and I can assure you we didn't turn it off. Just lost connectivity I guess. It doesn't happen a lot with our provider. Maybe once a month, but this certainly is terrific timing.

Jek

I'm going to throw my opinion in here. Keeping in mind I am *not* an economist... I just play one in Second Life...

The one thing that is for certain is that the more efficient the market (or any market for that matter) gets, the easier it is for the L$ to find the true value. The changes we made with partial fills were meant to make the market more efficient.

If we actually succeeded (and for evidence, you can consider the dramatic increase in volume in the weeks following the changes), and if the value is dropping, then perhaps the true value of the L$ isn't 250/$1 USD.

What if, and bear with me here, but what if the friction that we add inadvertantly through seller fees has actually been propping the value up? What if that combined with IGE buying reasonably high for quite some time has been artificially holding it up, and now we've all just run out of buyers?

When the site returns, look at this:

http://www.gamingopenmarket.com/priceChart.php?symbol=SLL&w=640&h=480&maxpts=600

(Fiddle with that last number to adjust the period.)

That should be the entire history of the L$ value. It started by dropping to around $0.50 per 250 or roughly $2.00 if I recall correctly (not being able to see my own damn web page I can't be certain). Maybe the rise was just excitement and now it's returning to it's original value...

Who can say? Economies are extremely complex beasts. Trying to lay blame on one particular aspect is like trying to blame one particular raindrop for the flood.

Jek

You seem to love this possibility...

(sigh)

No. It was merely an observation as to how easy it is to manipulate GOM and how people should pay the trade statistics no heed.

What puzzles me is this:

Not too long ago LL were openly operating a policy whereby they actively controlled the economy, roughly thus - adjust rate of release of new sims to auction so as to keep land prices stable, thus indirectly stabilising exchange rate.

This policy was abandoned in two steps
1. Allow freely available private islands to compete in the land price market via the mechanism of tradeable leases, thus bypassing the control.
2. Make mainland sims freely available too, at US$1000 fixed price (about L$4.1/m, which means about $5 after taking unusable land into account). The apparent auctioning is pretty irrelevant except for the occasional extra-desirable sim (telehub etc).

So my question is

By what mechanism are the Lindens now exercising stabilising action over the economy ?

Previously they made a weekly decision. Now I see no control mechanism whatever, even monthly.

Lets not argue whether they SHOULD interfere or not. The point is - they DID, but now they DONT.

I for one think the downward drift of the exchange rate is a result.
The whole system is now uncontrolled and running free IMHO.

And please note, despite my hotline request, and the positive reply, we still have absolutely no knowledge of how many private sims are sold by LL each week. Must have a profound effect on land prices now, and yet do we have transparency ? What hope do we have of understanding what is going on, without this crucial information ?

Didn't mainland sims used to change hands for an average of $1400-$1600 ? Why did LL wilfully cut the price ?

Ah yes - of course - it was the new competitiveness of the private ones - originally at $961. Now at - what? - $1250 is it ?

I do wish LL would actually TELL US what their thinking is on land prices and the exchange rate.

Maybe they will soon. Didn't they just recruit a new VP with the declared brief to sort this all out ?

*Shameless plug*

What about Ginko Financial?

P.S: Or Cyberland?

Some lessons learned:
Talk is cheap.
Actions speak louder than words.

Trying to maintain the value of land is just one part of the economy. There is also a problem with the money supply. The printing presses at the LL mint never stop. Plus, it doesn't appear that the populating in SL is growing. The Log-A-Thon goal of 5000 (or 4000) is probably a better figure for the active user base.

Eboni,

The vast majority of GOM users are people who want a quick way of exchanging US$ and L$ and don't care one bit about the underlying market details. The new system was designed to make the "instant buy/sell" process easier and more fair for everyone, and to make the market more efficient.

It is easier because a casual buyer/seller does not need to hunt down orders of the "right" size for their transaction. With "buy now", all they have to do is enter the amount they want to trade, and let the system do the rest.

It's more fair because now *everyone pays the same price* regardless of how many blocks you want to buy. Previously, you may have had to buy at something like $0.10 above the best price if you wanted to fill an odd sized order. Now, all orders are filled at the best price.

The market is still as open as it ever was. Any user can place an order for whatever price they like. If you *want* to pay $5 per block, our system will let you. Because the market is now so much more efficient, it probably won't take long for it to be filled, either. I can't stress this enough - the changes were meant to make things easier and more fair for casual buyers and sellers.

We hate to lose customers over what we feel is a huge improvement. We particularly hate to see them paying 15%-25% more than they should be.

IGE pays more when you sell. I am only selling, not buying.

They're paying $3.70 right now. The best buying price in the market is now at $3.74. Depending on the person's commission tier, they could easily "sell now" and still end up ahead of what the competition is paying. Anyone willing to wait a few hours could probably place a sell order at $3.78 or $3.79 and still have it sold by the end of the day.

Ricky, you're going to lose some of your charm if you continue to lie like that.

And yes, this has been brought up by your customers many many times and you obviously know better, so don't say you're *not* lying. I feel very confident in making that accusation.

IGE has to pay risk / merchant account fees just like you do. Just because they don't break them out, doesn't mean they're not paying them.


here are the real prices (without the deception)

IGE - Sell 5K and you get 18.5 USD
GOM - Sell 5K and you get 17.24 USD

That being said, I'd probably pay the premium because I trust Ricky more. Though, this kind of mathematical deception weakens that trust.

Blaze, my statement was neither deceptive not false. I unequivocally state that I am *not* lying.

I clearly stated in my original post that the amount a seller receives depends on the user's commission tier. Someone in tier 5 pays only $0.02 per block in fees. With a listed "sell now" price of $3.73, you're still making $3.71 (or $0.01 per block more than selling to the competition). Of course, someone in a lower tier will pay higher fees and, absolutely, it may be more economically advantageous to sell to IGE.

How predictable, I assumed you'd pull the tier obfuscation trick, but you're just digging deeper.

Assuming you had sold 1000 blocks (4000$ USD) the *month before*, then at the lowest tier, you're only paying a 2.9% + 2/3.73 penalty (plus 30 cents) instead of a 2.9% + 12/ 3.73 penalty.

5K (at the best possible tier for you) on GOM would fetch you 17.71$

Whereas IGE would still fetch you $18.50

My suggestion is that you have a great business. You are a great guy and you have a great history. This is why people use (and why I continue to use) your service. Not because you look like you have the best price when you don't.

I have the smartest brother ever

Wait, where is the 2.9% coming from for selling? And this 30c you are talking about? I have never seen either of these fees for SELLING on GOM. Buying is a little different. There is a 2.9%+.30 fee on deposits. But even with that price, it is cheaper then buying them from IGE.

If I were to sell 10k to IGE, I would see $37.00 in my paypal, where if I sell 10K on GOM, I see $37.40 in my paypal account. How is IGE better again?

I'm sure Blaze is referring to the fee Paypal charge on Premium and Business accounts for receiving money from GOM.

Oh, if that is the case, then soon there will be nothing to worry about.


This is from post /130/7e/53057/2.html#post560043

*fingers crossed* hopefully

Oh, come on.. you people can't be serious:

http://www.gamingopenmarket.com/fees.php


The extra fee for transfering to a merchant paypal account is yet another hit and is not included in the analysis above.

I didn't realise that GOM still hadn't gotten away from that.

Awwwwww <3

It's going again... it's at 3.68.

WEEEEEEE.... yet another freefall, yet another good time to buy and make some money.

3.59 (for selling Lindens)