Thanks, Jauani. Excellent analysis, by the way.
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Any thoughts on the Slexchange Currency Exchange? |
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Ricky Zamboni
Private citizen
Join date: 4 Jun 2004
Posts: 1,080
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11-10-2005 10:18
Thanks, Jauani. Excellent analysis, by the way. |
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Exchange Street
Registered User
Join date: 6 Sep 2004
Posts: 69
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11-10-2005 10:30
If you want to arbitrage between the two it's 3.5% (lindex) + 4% (paypal charge!?) + 2% slexchange spread. That's 9.5% you have to add before breaking even on an arbitrage trade. Just giving you a heads-up -- the standard PayPal deposit fee structure has been changed from a flat 4% to 2.5% with a minimum of $0.75. Also the minimum deposit amount has been lowered to $5.00. _____________________
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Val Fardel
Registered User
Join date: 11 Oct 2005
Posts: 90
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11-10-2005 10:35
This has been discussed extensively in other threads, but I'll repeat the summary here for completeness... 5 premium account @ $72/year = $360 Stipend received by those accounts = L$130,000 Naively calculated breakeven point = L$130,000/$360 = L$361/US$ ($3.05/L$1,000) If the exchange rate is kept close to $4/L$1,000 then you're making over $130 in profit over the course of a year. That's a ROI of over 40% per year, just by registering the accounts and selling the stipend. $130 may not be a lot a lot in absolute terms, but it's a very good relative return. I suppose...but it isn't good relative to the cost of ANYTHING else related to maintaning a highspeed on-line connection to service those accounts. And, I might add, that a relative return even THAT good is fairly useless if you can't multiply the return by investing more. Now if you were talking US$13,000/year I'd be paying attention...but then, even if you COULD have 500 premium accounts, I don't think you'd find it all that much worth your time to service them every freaking week to transfer the funds to the one acct you were cashing in on. Does ANYONE really think that 'farming' US$130 over a freaking year is going to have ANY effect on the SL economy or exchange rate? |
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Margaret Mfume
I.C.
Join date: 30 Dec 2004
Posts: 2,492
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11-10-2005 10:49
I suppose...but it isn't good relative to the cost of ANYTHING else related to maintaning a highspeed on-line connection to service those accounts. And, I might add, that a relative return even THAT good is fairly useless if you can't multiply the return by investing more. Now if you were talking US$13,000/year I'd be paying attention...but then, even if you COULD have 500 premium accounts, I don't think you'd find it all that much worth your time to service them every freaking week to transfer the funds to the one acct you were cashing in on. Does ANYONE really think that 'farming' US$130 over a freaking year is going to have ANY effect on the SL economy or exchange rate? Look, if your playing anyway, your paying for the broadband service. If your playing anyway, is all I'm saying, then $130 and 40%, what the heck. Maybe it beats a poke in the eye to some even though it seems like a lot of work to you. _____________________
hush
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Ricky Zamboni
Private citizen
Join date: 4 Jun 2004
Posts: 1,080
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11-10-2005 15:15
Does ANYONE really think that 'farming' US$130 over a freaking year is going to have ANY effect on the SL economy or exchange rate? Yes. And I demonstrated as much in a thread last month. Basically, I was able to fit a year's worth of quality GOM exchange rate data to an adapted model from mathematical finance (the field in which I am gainfully employed). The trend in the exchange rate seen over time is consistent with a long-term trend toward the minimum rate required to make a profit from stipend farming. It's not necessarily just one or two people consciously registering dummy accounts just to sell off their stipends, but in a liquid market (which SLExchange's version may bring us back to), enough small sellers should have the same overall effect. The thread in question is here. The post specifically outlining the effects of stipend farming on the model is here. |
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blaze Spinnaker
1/2 Serious
Join date: 12 Aug 2004
Posts: 5,898
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11-10-2005 15:49
No one is going to farm, well not enough to make a dent, but enough people are going to casually sell their left over lindens to revert to the model that Ricky describes.
I agreee with that, in theory, however you also have to account for a) friction b) growth in demand at the margins c) L$ hoarding d) sinks |
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Ellie Edo
Registered User
Join date: 13 Mar 2005
Posts: 1,425
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Are SLExchange confused by their own system ?
11-12-2005 01:55
See:
/108/f8/71274/1.html#post741120 I put this in General (perhaps wrongly) because I thought everyone who might use SLExchange needed to see it. Unless my brain has exploded, their own explanation of how their spread works is totally wrong, and actually upsidedown. Doesn't bode well for the ordinary person trying to use it. Please look at the link. Have I lost the plot ? |