A (not so) modest proposal.

You've claimed several times that LL will be able to reclaim the money they get from premium accounts this way, but do you actually know that this will be the case?

Even in the event that the Linden supply becomes static and devaluation starts to result, there will still always be pressure for people to undercut each other, because sellers have a deadline (their tier due date) while buyers do not.

Assuming that there are 10,000 premium members now, which is probably a low estimate (only 5% of the population), and that they are all using the maximum discount option of $72 a year, which they probably aren't, that's US$720000 a year, or US$60000 a month, or around US$15000 a week. If the Linden fell to the classic "target" rate of L$250/US$1 that would mean LL would need to sell L$3750000 each week, or half a million L$ every day! And remember - that doesn't just mean it needs to put them on the exchange, it needs to have them bought, which limits their choice of exchange rate..

Right now 1 million L$ at any given exchange rate is considered a "roadblock" which everyone must undercut and bypass - is there any reason why the same wouldn't happen again? If LL dropped half a million L$ on the exchange at the "market rate" on any given day, it would immediately encourage the next seller to undercut by 1 point.

Moreover, if the exchange rate went up, LL would have to carry on selling L$ just in order to make back their money - they couldn't necessarily afford to act "in the interests of the economy". And because the amount of US$ they need is the same, they'd have to sell more L$ to get it at the higher rate, creating even more roadblocks.

*sigh* the contract comes with an AV called 'siggy romulus' so I think my reply is very much in line with the question... there is no seperation of the two.

If you were to say 'how much is a lifetime account worth' - that is a totally different question - your asking how much MY account is worth.

The answer is pretty much relative to who you ask it... thats my answer.

Actually 10k is probably well above the true number since only 65kL was given out in stipends last month. Also LL wouldn't have to make the entire premium fee back in $L sales they could also make it in tier payments on 512m that is no longer free. And 512m that accts that couldn't own land decide to own.

L$65000!?

So there are only 32 Premium members!?!

Right now there is little reason for LL to care about the value of the Linden, other than general stability to keep the content creators happy. They print them and sell them for a fixed rate, no matter what the market rate is.

If linden lab relied on selling lindens on lindex for their income too, I don't see how that could possibly be putting there interests any more in line with "the interests of the economy". A stable linden would be vital for a good chunk of LL income.

i still say we eat babies

Yes, but, think about it. It's time for LL to pay their US$ bills for the month and they need to raise some income by selling L$. They look on LindeX and see that the market is such that selling any more L$ would probably destabilise the currency. What do they do? They can't make the US$ from nowhere and they can't make the bills disappear. They do have an interest in a stable L$, but only insofar as it allows them to sell their L$ at a good rate - if that interest winds up telling them that they can't sell their L$ at all, it's going to be ignored in favour of the reality of that US$ bill waiting in the in-tray.

It's exactly the same situation that most content creators are in, which causes the undercutting that speeds up devaluation - the classic Tragedy Of The Commons. Bringing LL into that equation wouldn't help matters at all. If LL sell L$ it will have to be only as a "bonus" income for them in situations where the market needs a L$ injection and those have yet to arise.

If Linden Lab is in enough trouble to face a choice between destabilizing the currency or paying this month's bills, then I think the market should reflect that.

If Linden Lab goes belly up, the Linden is worthless anyway. If they are selling out the linden in a major way we'd all have a strong signal to focus our efforts elsewhere.

You are right, relying on selling masses of new lindens that the market can't absorb is a path to disaster. That's the path they are on right now, LL is selling $160,000 USD worth of new Lindens a month in the form of stipends.

Smart people collect their fees in dollars. Of course your product needs to be worth it! *giggle* *laugh*

They are not in danger of going belly up at the moment but your proposal, that they should drop Premium and sell L$ instead, would require them to make sure their L$ sold or risk "going belly up".



No, that's not true! They don't sell "US$160,000 worth of Lindens each month" - to do that, they'd have to make the stipend vary each month to reflect their differing value against the US$. And if they did do that, it would be far worse for the economy than the stipend because LL would have to generate as many L$ as necessary to reach the US$160,000 value - and as the L$ fell, that would require more and more L$ to be generated, thus making it fall faster, and so on. That's exactly the reason why LL will never be able to rely on L$ sales as a primary income stream - at least, not without seriously damaging the economy.

But that's not what LL do with Premium. They sell L$2000 per Premium member per month for a fixed price of between US$10 and US$6 per Premium member per month. That way, they get a fixed US$ income without destabilising the L$ economy so much, because if the L$ falls, the number of L$ generated stays the same, and thus the value of L$ generated falls too, reducing the effect on the economy. To be honest, possibly a better option at this point would be for content creators to offer similar "subscriptions" too.

Smart people ask questions, do a lot of research, and choose the option that they believe (based on research and facts) will make them the largest profit, whether that means they take payments in $US, $L, stocks, bonds, or whatever. Not-so-smart people stick with whatever they believe is safest (USD, bank savings accounts, etc), and stay at the same level, i.e. poor, their entire lives.

Bet I have more money than you do gaijin!

Money in itself is not everthing but only a tool

You are correct. However, last month they sold $160,000 worth. I understand that more inflation will make that potentially less next month, in USD.

If they did target a fixed USD each month, regardless of the current exchange rate, you are right, that can lead to a downward spiral.

Under the current system, the Linden will devalue and stabilize. The downward pressure ends when the cost of buying lindens in the form of a premium account is roughly equal to the cost of buying lindens on Lindex.

The current system is the same as if they were to put up large sell orders (that bypass the queue) at a certain price, somewhere between 277 and the mythical 361 I'd say.

But here's the kicker and the risk of the current system. If the linden strays around 400 or so then the stipend is no longer a good reason to go to a premium account.

Basically Linden lab has a choice. Premium accounts are going to become less and less worth getting as the linden devalues. The stipend and land will not be a good reason since you could pay $10 on Lindex and get plenty for rent and more than the stipend.

So basically they can watch premium accounts wither and die, or they can take a proactive step and stop the devaluation of the Linden in the next 3 months, and start carefully metering lindens into the exchange.

I think you made a good point, but I think at this point it's a rock and a hard place. Watch premium die or give premium an honorable death and replace it with something that can be metered and controlled.

Of course you do. I only have a bit over $230,000L in SL, and just a big college load debt in RL. I'm still in college, remember? Baka