A (not so) modest proposal.

You come to the end of the path. Here the path branches into many paths. A jester appears and whispers the following in your ear:

"Psst, Linden. Here's a way to fix that nagging problem you've been having. Get rid of premium accounts!"

> SAY "BUT WHAT ABOUT THE $180,000 USD I GET FROM THEM EVERY MONTH?"

The jester ponders a while. He then says:

"That's no problem in the long run. What you should do is automatically convert their account to have a repeating buy order on the Lindex for the amount of USD they pay each month. Since we know you've been eyeing selling Lindens on the Lindex anyway, you can simply inject lindens into the economy to keep the exchange rate from falling too low, that will surely make up some of that $180,000 loss every month. Also $180,000 is only a few hundred sims worth of tier. At the rate you are putting new sims out, it's a small fraction of your income, becoming smaller all the time!"

> SAY "BUT WHAT ABOUT LAND OWNERSHIP?"

The Jester replies:

"Well since being a premium account holder only means you have a repeating lindex buy order, it wouldn't be necessary for land ownership anymore. Everyone can tier up to whatever they want, without the added barrier to entry of that first 512 costing effectively a lot more than it should. More people will be likely to own a small plot of land, since it will only cost $5 a month, instead of $10... demand for land will actually increase!"

> SAY "SO NO MORE STIPENDS?"

The Jester does a backflip (boing!) and says:

"Yep! But look at it this way, the people that were paying $10 a month for 2165L, will at current exchange rates actually be getting 3300L a month, should they decide to continue paying $10/month. So they actually get more Lindens a week. If the exchange rate starts to fall below the point where they get less than 500L per week, you know what to do, just inject a little currency into the Lindex. But that won't happen until the exchange rate falls to 216L/1USD.. And you'll probably want to put some new Lindens on the Lindex sooner than that, to make up for some of your lost revenue."

> SAY "WHAT ABOUT EXISTING PREMIUM ACCOUNTS"

The Jester considers a while and replies:

"Well, You could give them the option of continuing their current deal until their contract runs out. That shouldn't be a problem. It also gives you a buffer to let the transition soak in to the userbase, so it isn't a sudden jolt to the economy!"

After the Jester finishes saying this, you notice a sign you didn't before. It points down one of the paths.

> READ SIGN

The sign says:
"This way to economic stability and a happy userbase!"

The path it points to is to the northeast.

> GO NE

I'll just buy teir, thank you. Ill spend only what I earn.

I have a lifetime account.

My contract ends when I die or LL folds.

That would be fine.

For the economy overall a tiny amount of lifetime premium accounts won't hurt anything.

Are you willing to sell your lifetime account? What would be the price if it was a yes (or a hypothetical price if it was a no)?

There's basically two problems with this.

a) The purpose of the premium membership is to make money for LL. Not to be a way of selling L$, but to make money for LL. Since LL's costs come from hosting servers and L$ cost them nothing, the premium membership gives LL a "good deal" on the first 512 of tier.

"But, if the economy is stable, more content creators will buy more land, so LL will make more money that way." They won't, actually. LL's interest lies far more in getting more people to buy land, than to getting people who already have land to buy more. Multiple land buyers don't get tier discount.

b) The system can be gamed. You'll quickly find all the sell orders on LindeX being quickly adjusted to L$1/US$1 - or, L$1 below the "minimum rate" at which LL would sell the L$ - just before midnight each Tuesday and then switched back again at midnight on the Wednesday.

c) There could be absurdities arising. A content creator on a Premium membership sells L$1,000,000 on LindeX. The next Tuesday, they buy their own L$.



And if it doubles, then LL will be making.. as much money as they are now.. when they're not profitable.



"Make up for some"? They don't need to "make up for some", they need to generate more!



And LL going bust.

Selling newly minted Lindens does make money for LL. By converting premium accounts into an optional repeating Lindex buy order, the exchange rate will fall. LL can then sell new lindens directly on Lindex, making them money, and giving them fine grained control over the exchange rate.



Since the first 512 will only cost $5 instead of $10, there will be more small land owners.





Linden Lab would enter the repeating orders as market orders (not all at once, spread out), and limit orders to sell. There's no reason they shouldn't act like any other trader with money to buy and sell. They can disperse their injected lindens across many price points if they want.




There's no such thing as a premium membership, remember? And that's not absurd, that's normal trading that would reduce volitility and increase liquidity, assuming such a trade would be profitable for them.

I don't think this will work, though.

LL can control the exchange rate by selling L$, since everyone will have to charge less than them. But - in order for any of those L$ to actually get sold, every L$ being sold by someone else on the market will have to be bought first!! Since everyone in the market will cut their price to below LL's price, people will only actually buy those L$ from LL if the market is completely empty apart from LL. That is possible but it seems very unlikely, giving the monthly rent/tier cycles.



But LL are making half as much from each one ($5 instead of $10), so there need to be twice as many land owners for LL to not lose money!



"Not all at once, spread out"? Then how do you decide which order people get their weekly money in?

What? Just inject the Lindens at market price... Problem solved.




No, they only must sell about $90,000 worth of Lindens on Lindex each month to break even. Without stipends, there will be plenty of pressure for the exchange rate to fall, so it will take most of that amount just to prevent deflation.



Just make it a staggered thing. Everone wouldn't get their standing order on the same day. Randomly distribute the buy times, in accordance with the historical volume of the market.


The best part of this is that LL will have much more control over the currency supply and monetary demand. Right now their hands are tied because they can't easily mess with stipends they promised to issue. Being able to choose when to inject lindens, and when to place the buy orders for the standing orders turns that around and gives them tools to control the exchange rate.

Love the Jonas reply.

I love how he never addresses any issue from a global perspective, he instantly jumps into how the proposal will directly affect him and what his response will be.

Premium Stipend for 5,000 members at L$2,000 a month: L$10,000,000/month.

US$90,000 worth of L$ at the classic "target" rate of L$250/US$1: L$22,500,000/month.

In other words, even if the market went right up to the old target rate, LL would have to create more currency than they would if they just kept premium stipends.

If they wind up with more than 11,250 premium members then it becomes worthwhile, of course. But we'll have to see the consequences of removing the basic stipends.

It's against the TOS to sell accounts - so it's not possible. Secondly sell *my* account - wouldn't happen at any price.

The idea of someone else simply logging on as me and other not knowing it wasn't me would be most unpalatable.

The only thing of any value you have in SL is yourself and your reptuation - and theres no pricetag you can put on such a thing - there simply isn't enough money. I'd delete my account without a second thought to selling at any price.

Good point. I'm just wondering what a contract such as yours would be worth today (problems you mentioned notwithstanding)

Totally Rejected


Lifetime Accounts do not run out.

Amen!!!!

*mine* is priceless - because you wouldn't be buying just my account, nor just my content - you'd be buying my name and reputation, which is too rich for even miss newsweek cover to afford.

Pretty presumptuous... what makes you think your reputation has positive valuation????

*sigh* I didn't mean you, and in buying your login and av specifically. I meant, if it were somehow possible, how much would you be willing to sell your contract for, where you give up the lifetime thing and switch to either basic or premium stype payments, and the contract gets transfered to another person.

Is this true?

Yes, they stated recently that they have changed the TOS to allow them to sell Lindens on the Lindex.

They also said they weren't currently doing it, and didn't plan to without disclosing it, and only when the market needed it (i.e. deflation).

To me this signals they are already moving toward doing what I suggested. They will eliminate premium accounts going forward. All sources will be direct sales on the lindex, and stipends will be replaced with recurring buy orders that people can set up.

Did you really need to quote my entire message to add 8 words?

Anyway, the tiny quantity of lifetime users should be able to keep their lifetime accounts. It's going to have a tiny effect on the economy if a few hundred people still get 500L a week.

I reject this proposal today and will reject it tommorow!

What will you do? Downgrade to basic if they say they are gonna eliminate premium accounts?

Well wait a sec....
They are already pumping more into the economy than they are taking out. For LL to sell L$ on the Lindex would not only add to the devaluation, wouldn't that be an egregious violation of ethical practice? I mean, it would amount to nothing less than LL having a printing press in their office that prints REAL$$.
How can that happen?

Because they will stop printing lindens in the form of stipends. The end of stipends, coupled with the conversion of what used to be premium accounts into basic accounts with a standing $5 or $10 order each month (depending on if you were using your 512 land or not), will cause deflation. To counter this deflation, Linden Lab can sell Lindens on the lindex, recouping most of the lost income they used to get from premium accounts.