The past several months have seen a gradual decline in the value of the Linden dollar on the LindeX currency exchange. Most recently, the Linden Dollar has dropped in value by approximately 11% since mid-February. In response to this decline, and in keeping with our desire to maintain a stable currency exchange rate, Linden Lab has decided to discontinue the payment of traffic incentives to parcel owners. For the most recent month of March 2006, these traffic incentives totalled 4.7M Linden Dollars. Removing these incentives will reduce the amount of new money being created and should be expected to have a stabilizing effect on the value of the Linden Dollar. Following this change, we will continue to watch the economy and make further changes as needed.
We will also be posting a number of different economic statistics in the forums, for those who wish to follow the Second Life economy in more detail. Additionally, Robin Linden will be following up with detailed information and schedule about the traffic incentives.
The overall growth of the Second Life economy continues to be very strong: For the first quarter of 2006, user-to-user transactions in Second Life totalled 4.17B Linden Dollars, an increase of 68% over Q4 2005. Currency purchases on the Lindex for Q1 2006 totalled 743M Linden Dollars, meaning approximately US $2.6 million dollars traded at average exchange rates.