"LindeX" - Linden Currency Exchange Begins Public Testing

Aren't the costs a bit steep? Doesn't this kill the day trader. $0.30 per transaction is cheap for the buyer if he sells a large quantity but the 3.5% per transaction for the sellers is equivalent to taking $0.12 - $0.14 off each 1k block of $L sold which is higher then the highest tier fee charged by gom. Am I reading that wrong? If that's true, gom can still easily compete with this exchange as it would be much cheaper to trade with.

My thoughts exactly. It'll be interesting to see what SL Exchange gets up and running as they plan to implement a GOM-esque style site. LindeX's high fees open the door for competition.

I have been saying the same thing.
GOM may have been a bit hasty in handing over the market.

I'm skeptical. The convenience factor is worth a lot. The fraud factor is a real problem. And the lack of 100% reliable communications between in and out of world adds risk and labor intensiveness.

I don't think competing with LindeX would be a joyful experience.

Buster

You guys missed the analysis.

30 cents fixed cost is WAY cheaper than GOM.

GOM was 30 cents plus 2.9% to transfer from paypal. Ad then on top of that, another 12 cents per 1000 L$ (over 3%) for the seller.

This is just 30 cents to the buyer, and 3.5% to the seller.

Waaaay cheaper.

GOM would have been dead.

GOM wasn't making a lot of money off of day traders.

It was money, but really not that much.

Besides, GOM would have to pay the spread here just like everyone else.

Why would anyone want to pay GOM *and* LL? Why not just pay LL?

No, there is no room for anyone else here.

Philip would have had to have set up a tier arrangement so GOM would have collated everyone's trades and made tier and got a lower fee and then arbitraged that, much like land barons do when they rent out land.

Well, the only thing I am looking for is the inworld integration?

I mean so far it ain't (which is obvious they had no time as yet) which is great cause I can do other things than sit idle in SL, BUT, is it going to be?


And if so, why? should I use this as opposed to all the out of game markets?

I agree the fees are better than GOM, but if I have to be in game to use it, I can't trade on FX as well, so I should choose SL over FX (YEAH RIGHT!)

I wanna seeeee!

Blaze I posted this on some other GOM topic in the plethora out there but


if given they avged 2000 in volume a day, for 30 days, even at the TOP tier of 0.02 cents, plus the fact they charged you the PP fee they should have been charged, they come out on top (after paying for hosting) only if they were not going with the most expensive host on the planet.

I can run their setup with a fully dedicated box (not co-located) for 900 a month (at 4-6 gigs of bandwidth).

Just never added up really.

You are thinking that GOM has to trade on another market to exist? That is only true for SLExchange and IGE. Those two had to go to GOM to make money. I'm sure they might get lucky every now again and get people buying on both sides of their huge spread, but lets face it. The only reason to mass millions of $L that are constantly going down in value is to buy the ability to push the market around.

GOM can exist without ever dealing with a second currency exchange. Why would their survival be dependant on linking with LL. There could very easily be people that bring US$ to GOM, that never ever cashed out on the Linden exchange. There could also be people that bring $L to GOM, that never bought on the Linden currency exchange. Why does the money need to go through both in your opinion? There could very easily be two co-existing exchange sites that never interact in any direct fashion. I mean in your thinking, you might as well say that people were paying both for the money exchanged on EBay as well as GOM.

GOM could of survived, ecspecially with this limited selling I'm hearing about. Now people are going to be stuck going through two competitors when their limit is hit, instead of going through several hundred or thousand competitors. The only place having true competition now will be Linden exchange, and we are forced to limit our use of it?

In theory they are out on top but you are probably forgetting the other bits and pieces as well as the chief cost of any company, namely wages. As a hobby it looks good, but I do recall them saying they wanted to make it full time and their shareholders would have like to see more returns on their investment. When that happens cost starts going up.

So presuming 2000x0.02 = US$40 a day. By 30 thats US$1200 a month. Presume US$900 for hosting. That leaves US$300 a month to split between 2 people, not exactly something to give up your day job over. It we do the same with 0.12cents a block we get US$7200 a bit more exciting

We need to take into account additional expenses like scams which have happened and having to buy from the market to ensure they maintain their gurantee that no one loses anything in case things glitch between SL and GOM, which is whats happening recently.

Add in business fees as well as they are a registered corporation. Not sure if its the same in Canada but in the UK you have to pay for a return form and getting an accountant to sign off your accounts. Dunno what corporation tax is like or whether there needs to be some kind of social security contribution from the company (My experience is UK based.)

They probably want to pay themselves a salary thats equivalent to what they get now. Presuming they like to earn say US$24,000 a year, that means having to to earn perhaps at least US$5000 - US$6000 a month from GOM to really make it worthwhile and become a full time thing which is what they wanted to do. So its potentially doable if everybody was paying 0.12cent tier but it would leave it fine for potential business emergencies.

Granted, I didn't say they would be getting rich over it.

The bottom number would be about 1200 a month, most likely close to the cutting edge of what is needed to run the business including external costs, without actual wage.

Yes, they had mentioned wanting it to be a day job replacement, but in the same breath say it is a hobby, so its a mixed bag of what they really intended to do over there.

If they had wanted to make it a day job, simply adding google ad sense and an advertisement program would have most likely netted the monthly costs, and the 1200 min would have been the pocket money. Not sure why they didn't do that cause its really not obtrusive nowadays and is half-expected on most sites trying to sustain themselves.

Trying to be a good guy (minus ads) has prolly put them in the tight position they were/are which quite frankly sucks, cause I am sure more than enough people wouldn't have cared if there were a few ads on the site so long as it kept going.

They never had the traffic to make anything on ads. They would have been more trouble than its worth anyway. Just how many click-throughs do you think they could possibly have generated?

Yeah, membership sites are terrible with adsense, because the CTR drops after the initial placement.

They should have kept it going as a showcase and tried selling it to other MMOs who wanted to follow SL's model.

I beg to differ.

I have a site that sells skin lotion (tend skin, skin cap etc...) we get about 200 orders a month. Given that we have a 5% conversion rate, that would put our monthly traffic at 4000 (minimum unique hits). Currently we net 200+ just from google ad sense.

Now, why would the same ppl I sell to, month after month, keep clicking on those google ads? Serious question. But they do.

I think GOM got more than 4000 hits a month, and with a google program, and an ad program that pays you per impression, they could have easily made 500+ a month just from the ad program.

I think my underlying thought is:

GOM could have gone into other avenues to generate money from their site besides just sitting back, hopeing beyond hope, that the monthly tier payments per block would make them rich.

That is a narrow and greedy/lazy business model.

Adapt or die.

They chose the latter.

Well, if you don't have churn in your customer base, you are more the exception than the norm.

And it really does stand to reason - if the same people are seeing the same ads, why would they click on something they've already clicked on ?

With a little help (APIs), I'm sure the community could of done it better. I don't know why they buy into this strategy for everything but the buying and selling of Linden dollars. Just because it relies on thier backend, doesn't mean we don't want to mash it up and do it our way.

How bout a list of services who agree.

I really like LL, but I like user created content better.

And man, I am telling ya, my partner and I have been scratching our heads over this one for a year now.

Still, I'm kinda surprised that you leave adsense on.

If you were all content, it would make sense, but when you sell something the last thing you want to do is distract your customers.

Your math is a wee bit off here. If you are buying, then the paypal fee is 2.9% +.30. If you were selling, it cost you tier. This is much cheaper to the buyer, but much more for the seller. There is also a fee for taking money out of the new system, too. 5-10USD I heard? I think all in all, it cost more to sell now then it did before.

PS, I haven't run all the numbers, but it seem like it cost more now then with GOM.

Hmm, the 3% the seller is paying is getting paid partially by the buyer as well. This is something most people miss.

The 3% the seller pays is really just the spread that GOM artifically creates in order to profit. When you trade with a higher tier seller the spread often tightens and both buyer and seller are paying less to the artificial spread.

Eg: when there is a 1 cent spread on GOM that is usually because the high tier players are involved in the market.

It's really the same like a broker does.

For example, some brokers claim very low commisions, but really they're screwing you on the spread. Most people don't know this because they're naive about how it works.

On GOM, a buyer ends up paying more for his L$ because the seller needs to sell at a higher price to recoup his 3%.

Similarly, that 2.9% that the buyer pays to PayPal could have been going to the L$. Instead of paying 0.029x to paypal and (x-0.029x) for 1000 L$, he could have paid x just as happily (because they are the same amounts to him). Well, actually, 0.029x+0.3 to paypal, but you get my drift.

Anyways, the fact is, the community is getting an awesome deal here. I hope they recognize this.

Where do you keep pulling the 3% for the seller from? I don't see this at all from GOM.

And welcome to the glorious use of a fixed spread like on forex. Makes a huge difference. Keeps the forecasting to only the actual price per cuirrency pair instead of adding in guessing whether or not some schlomo is going to dump a vast amount of cash on the bid/ask and stall the market moves.

And although the deal is slightly more in favor of both sides (or more equal to both sides I should say in terms of ROI) it is not a much larger gain really.

Funny how how on lindex ppl are already set at valuing the linden at $4 right off the bat.

well they said it was going to be 3% once, I think.

Buy, yeah, 12 cents, which btw on 3.50 per block is 3.4%

Pretty close to the 3.5% that SL is charging to seller.

Except that you have to pay another 2.9% on GOM but not on Lindex.

Oh, I see, but if you were anyone that did any type of volume, your tier would be much lower then that. The top people would pay only .02, so really the new exchange helps the small time sellers, but hurts the bigger sellers.