Phillip - will it be a true "exchange"?

Phillip - I've seen your recent statement that people will be able to get account credits or payment from your replacement for the GOM.

However, what is not clear to me is your definition of "exhange" when you and Robin have used the word recently in your various posts about the GOM closure.

Will your replacement system be a true free-market exchange with a buy-order/sell-order mechanism similar to what GOM had, so that the market can set its own price via supply/demand?

I ask because in your earlier statements about the form that your LL service would take, you specifically said that it would only be a broker service that bought from one of the current resellers/exchanges at the lowest price (or something like that). A brokering service for players who want to buy linden$ (a one-way transaction) is quite different from a true exchange that supports both buyers and sellers to derive a market price for any one transaction.

Can you please give us clarification on this matter? What are the basic components of this "exchange" that you plan to put in place "soon"?

What we are building will be a market: sellers will set desired sale price by creating a series of sell orders. Buyers will receive the best price based on those orders. L$ will move between buyer and seller at the moment of purchase.

Linden Lab will not be partipating in this market as buyer or seller, and Linden Lab will not be creating currency to support this market.

So you are saying that there will be no way for buyers to list an asking price? Is this the way it will go from here on forward, or is this just the way it will start? Could we also have more details about how this will work, like how to sign up to be a seller? What restrictions will there be on both selling and buying? Maybe a better time line then just soon? Are we talking days, weeks, or months? I just want more details please.

Great, thank you for the clarification. This brings up two other questions, though. LOL

1. Will the listed sell orders all be visible as they were on GOM, or will they be hidden as they are on IGE?

2. Will partial fills be allowed? In other words, if the lowest-priced seller has a block of 100 units for price X, will a buyer who comes along be allowed to buy only 10 units from that block, or will they be required to buy the entire block of 100 to get that price?

It looks like buyers wont be able to place buy orders?

hehe Dnate is sad his exchange is getting taken away =P He needs to sell people Linden currency IMMIDIATELY. How saaaadd.

I can only hope they will improve on GOMs flawed design. Exploiting the system and trying to squeeze every cent out of the non-traders drives up the price for the bottom rung consumer so a few people can make a few bucks. If they were to add limit orders, drop the lame block concept & add partial sales I have no doubt SL would be a much safer, more enjoyable place to do business in without a pair of leeches skimming off the top.

Maybe you should read what I have posted before, and not just assume you know it all.

Maybe you should do a little research before you go and pretend to know it all. This is what I fear, not my ablity to sell quickly, but a market that allow a give and take.

Impossible! =P

But thank you for the copy and paste

(emphasis mine)

Best news on this topic I've heard all day. Now if you said partial fills down to $L 10 were going to happen, it would be even better.

Now, that would be fabulous.

That's some good insight on what people expect from a currency exchanges

This would be a great feature. Especially if there was no spread involved.
Even if there was, it would be better than using GOM. The process of using GOM involving registering, and making your character correspond may be only a little tedious. But the platform within SL would make things far smoother and more convenient.

I am still concerned that there will also be a spread such as that of GOM.

How can you have a spread with only a forsale list and no wanted list?

As far as I know, it would be the same way GOM does it. Unless GOM uses a different method. The normal method for the middleman is to tack on a spread.
Or a fee.

My big question is will it support PayPal? I hope it does!

GOM charges 12 cents per L$1000 (decreasing with volume) to the seller in the form of commission. The spread could be determined as the difference between the best wanted price and the best for sale price minus the commission.

ex. for a day trader on 2cent commission
best buy $3.52
best sell $3.62
----------------
difference .10
- commission .02
----------------
.08 spread (profit / block)


LL are only having a for sale list. Philip said there will be commission charges but they haven't decided yet what they will be.
So we're left with just commission. No spread.

OK I stand corrected.

Yes GOM has their commission rates on their board.
Any commision rates in the new interface would not be fair to the players, but profitable to Linden Labs.
It is hard to say how there could be a fair solution that may not be profitable, but ultimately worthwhile to LL.

The word "commission" implies "compensation". Phillip said there would be a "fee" that would cover costs, not any kind of compensation or profit. So I would rather we use the term "transaction fee" rather than "commission" . Mechanically the effect is exactly the same, but to avoid confusion and to cut down on the ninnies railing against LL "making a profit on the backs of the common man". (What's in a word, anyway, other than meaning.)

I would suggest, however, that LL could introduce an unconventional fee structure that would include a $L sink. In addition to the US$ fee that covers LL costs (such as credit card merchant fees), they could introduce a $L fee. The $L fee could be periodically adjusted in order to moderate the sink. In times of high $L values, reduce the fee to zero. In times of low $L values (like now), increase the fee.

It would be best if the $L sink fee were graduated and automatic. for example:

$L sink fee = 10% * max(0, 4 - rate).

Low $L value, high sink. High $L value, low sink. Over $4, no sink at all.

While this would not simulate any RL exchange, which may be a little distasteful, it would help moderate the money supply, at least to some extent,.

Buster

Interesting idea, but I can imagine the outcry and emails to [email]support@lindenlab.com[/email] when Joe Noobie hands over his $10 (including transaction fee) expecting to recieve L$2800 and only gets L$2750 in his account... After all, he paid (including transaction fee) for L$2800

It does not matter which term you use to mask the situation.

Most people do not know what revenue is. Revenue is any income to a company wherever it comes from.
Nobody has any qualms about transaction fees according to paypal rates or standard rates a bank or third party may charge as long as they can show what these third parties are charging. For example GOM charges a $2.00 fee to send people a check in the mail. We do not know how they came up with this fee. A a check, envelope, and postage should cost less than a dollar.
It is not reasonable to tack on processing fees or any others. This interface/features should be included in the platform that we pay $9.95 for without any addition. It is only fair.

I suggest that they unmask the situation by using terminology that doesn't imply that they are making a profit, in order to cut down on the noise level from those who don't know the difference between "revenue" and "profit".

Stick it to the sellers, not the buyers. Joe Newbie pays what he expects and gets what he expects.

You forget paying for the labor of mailing the check. If they believe that extra work is worth that extra dollar....

Or one could just have a flat weekly/monthly fee for buying and selling.