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Brock Nelson
712
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Posted - 2014.08.04 01:18:00 -
[1] - Quote
Hey folks,
Was having a discussion in the good lounge and the use of BPOs as collaterals in loans was brought up.
Pre-Crius The standard approach to BPO valuation was to use 90% of NPC price. This approach would allow loanee to get liquid isk but hang onto their blueprint through third party or the loaner. Should the loanee default or run away, the loaner can turn around and sell the blueprint. However, the time it takes to sell the blueprint varies widely depending on what it is and how much research it has, thus the extra 10% is used to compensate the loanee for the loss of his time.
Post-Crius The game's changed. ME level now plays a big part in the valuation of blueprints. Let's take Rorqual BPO for instance, taking 0 to 10 ME would cost more than what the NPC price of the blueprint is. Essentially, a perfect Rorqual blueprint is worth 6 billion in both NPC price and research cost.
How does this change the loan game?
No loanee is going to accept 90% of blueprint NPC price in isk. 2.7b for a blueprint that's worth 6b No loaner is going to offer 200% of blueprint NPC price in isk.
Thoughts? Signature removed, CCP Phantom |
Rain6637
Team Evil
15555
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Posted - 2014.08.04 01:20:00 -
[2] - Quote
sounds to me like a person is more likely to get a loan with a BPO if they really want a loan.
President of the Commissar Kate Fanclub | Rainfleet on Twitch | Twitter | Rainfleet mk.III | Imgur |
X ATM092
Clan Shadow Wolf Fatal Ascension
340
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Posted - 2014.08.04 01:25:00 -
[3] - Quote
Some bpos are still oversaturated in the game such that the potential supply if all bpos were in use would far exceed the demand for the product. This used to be somewhat offset by the use of bpcs which, due to copy time being far longer than build time, would artificially lower the supply and increase the scarcity and therefore value of the bpo. Now copy time has been hugely reduced the real terms output of the bpos is higher than ever and if that exceeds the supply then the value of the copy, and therefore of the bpo, will drop.
What all this means is that in oversaturated bpo scenarios, of which a great many exist, bpos are going to be more worthless than ever post crius. The issue of buying and researching a new bpo from scratch is irrelevant in those scenarios because the market will be flooded with perfect bpcs until demand finally catches up with supply or until the bpcs get so worthless people stop even copying their bpos. |
Rain6637
Team Evil
15555
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Posted - 2014.08.04 01:26:00 -
[4] - Quote
wait, what X ATM said. I mean that. President of the Commissar Kate Fanclub | Rainfleet on Twitch | Twitter | Rainfleet mk.III | Imgur |
Kendra Coldera
Ripoff Industries
18
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Posted - 2014.08.04 09:14:00 -
[5] - Quote
Brock Nelson wrote:Essentially, a perfect Rorqual blueprint is worth 6 billion in both NPC price and research cost.
You are wrong where you think a ME 10 is really worth it. Why? If you buy such a BPO now you WILL NOT research it to ME10.
ME 6: Job Material Cost 2,205,156,946.11
ME 7: Job Material Cost 2,168,027,709.10
ME 8: still the same
ME 9: still the same
ME 10: Job Material Cost 2,095,629,500.58
So you save 73m for what? A year or so of research and ~3b? So you will have to build 41 Rorquals to regain the ISK but that does not factor that you could have been building 1 year earlier for a lot of profit already.
Basically there is no use to research BPOs to such a level unless you plan to go on a long absence from this game.
Tbh CCP screwed this part of industry up because everybody that has a pre crius bpo now has an advantage over starting industrialists. I really hope they change this at some point. I mean all those Capital Part BPOs with 10/20... |
Ria Nieyli
15865
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Posted - 2014.08.04 10:00:00 -
[6] - Quote
Kendra Coldera wrote:Brock Nelson wrote:Essentially, a perfect Rorqual blueprint is worth 6 billion in both NPC price and research cost. You are wrong where you think a ME 10 is really worth it. Why? If you buy such a BPO now you WILL NOT research it to ME10. ME 6: Job Material Cost 2,205,156,946.11 ME 7: Job Material Cost 2,168,027,709.10 ME 8: still the same ME 9: still the same ME 10: Job Material Cost 2,095,629,500.58 So you save 73m for what? A year or so of research and ~3b? So you will have to build 41 Rorquals to regain the ISK but that does not factor that you could have been building 1 year earlier for a lot of profit already. Basically there is no use to research BPOs to such a level unless you plan to go on a long absence from this game. Tbh CCP screwed this part of industry up because everybody that has a pre crius bpo now has an advantage over starting industrialists. I really hope they change this at some point. I mean all those Capital Part BPOs with 10/20...
You can always try to find somebody to sell you a 10/20 BPO, but ehh... Do not remove a fly from your friend's forehead with a hatchet.
- Ancient Chinese Proverb |
Brock Nelson
713
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Posted - 2014.08.04 15:04:00 -
[7] - Quote
Kendra Coldera wrote:Basically there is no use to research BPOs to such a level unless you plan to go on a long absence from this game.
If you want to talk about whether or not taking a BPO to 10 ME is worth it or not, take it to another thread. This discussion is about how researched blueprints should be valued as collaterals in loans. Signature removed, CCP Phantom |
Rain6637
Team Evil
15565
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Posted - 2014.08.04 15:13:00 -
[8] - Quote
sorry for playing around, Brock President of the Commissar Kate Fanclub | Rainfleet on Twitch | Twitter | Rainfleet mk.III | Imgur |
Kendra Coldera
Ripoff Industries
19
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Posted - 2014.08.04 16:13:00 -
[9] - Quote
Brock Nelson wrote:Kendra Coldera wrote:Basically there is no use to research BPOs to such a level unless you plan to go on a long absence from this game. If you want to talk about whether or not taking a BPO to 10 ME is worth it or not, take it to another thread. This discussion is about how researched blueprints should be valued as collaterals in loans.
Which is what I responded to.
Value will still be NPC because the required amount of research can be achieved with minimal effort and ISK (something like 7/12 is achieved insanely fast).
The collateral value will always be market value minus some safety percent. And with these changes it is immensely quick to get a BPO to a level where it is usable. I just did the math to show that only few people would be likely to pay such a premium for a 10/20 BPO (not saying there are none).
But overall value will be closer to NPC than pre-Crius. |
Sabriz Adoudel
Mission BLITZ
3335
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Posted - 2014.08.04 23:35:00 -
[10] - Quote
Market value for well researched BPOs that take an eternity to research is definitely less than NPC value plus research costs. Remember, (IIRC) a 6/12 BPO costs a lot less than a quarter as much to research as a 10/20.
I personally would value a 10/20 BPO as the cost to produce a 6/12 in collateral situations. This will make BPOs less appealing to use as collateral, and will no doubt result in lenders scamming borrowers as a way to 'purchase' BPOs. https://forums.eveonline.com/default.aspx?g=posts&t=346564 - a proposal to overhaul the Logistics skill https://forums.eveonline.com/default.aspx?g=posts&t=238931 - an idea for a new form of hybrid PVE/PVP content. www.minerbumping.com - ganking miners and causing chaos |
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Angelica Everstar
33
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Posted - 2014.08.05 18:03:00 -
[11] - Quote
Collateral's value is not based on what it would cost you to make or get it. It's based on what you could sell it for easily/fast. So NPC price - 5% should be good for most cases. Value is always going to be in 3rd party's favor, and needs to be. Any typos, spelling errors and bad grammer found, are free and yours to keep Current bond : PFA05 500b / Total 825b |
Sabriz Adoudel
Mission BLITZ
3341
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Posted - 2014.08.05 23:48:00 -
[12] - Quote
Angelica Everstar wrote:Collateral's value is not based on what it would cost you to make or get it. It's based on what you could sell it for easily/fast. So NPC price - 5% should be good for most cases. Value is always going to be in 3rd party's favor, and needs to be.
The issue here is that the more collateral falls under market value, the more incentive there is to offer 'loans' where you lend 1.7 billion against a BPO with market value of 2.2 billion, claiming you'll accept 1.751b (103% of principal) at a later date, then never accept repayment and just keep the BPO.
90% of fair market value is OK as there's not much risk for the borrower. 70% is basically the borrower lending a sizable asset unsecured to the lender. https://forums.eveonline.com/default.aspx?g=posts&t=346564 - a proposal to overhaul the Logistics skill https://forums.eveonline.com/default.aspx?g=posts&t=238931 - an idea for a new form of hybrid PVE/PVP content. www.minerbumping.com - ganking miners and causing chaos |
Vaerah Vahrokha
Vahrokh Consulting
5500
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Posted - 2014.08.06 06:56:00 -
[13] - Quote
Sabriz Adoudel wrote:Angelica Everstar wrote:Collateral's value is not based on what it would cost you to make or get it. It's based on what you could sell it for easily/fast. So NPC price - 5% should be good for most cases. Value is always going to be in 3rd party's favor, and needs to be. The issue here is that the more collateral falls under market value, the more incentive there is to offer 'loans' where you lend 1.7 billion against a BPO with market value of 2.2 billion, claiming you'll accept 1.751b (103% of principal) at a later date, then never accept repayment and just keep the BPO. 90% of fair market value is OK as there's not much risk for the borrower. 70% is basically the borrower lending a sizable asset unsecured to the lender.
This means that trusted third parties are going to play a role, as the involved people are known for not exploiting those opportunities to screw up one of the sides.
Auditing | Collateral holding and insurance | Consulting | PLEX for Good Charity
Twitter channel |
Angelica Everstar
34
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Posted - 2014.08.06 08:09:00 -
[14] - Quote
A trust in the holder of collateral was/is always needed (usually why 3rd parties are used), regardless of the changes to BPOs' value.
That level of trust will likely need to be bigger now, as the difference between possible sell value, and quick sell gets larger for BPOs. Other types of collateral where/are also like this, in that there is a large difference.
Just try using officer items / AT ships / collectables / T2 BPOs as collateral vs Trit or other core mins / T1 BS ships / and what looks like, in the past - BPOs Any typos, spelling errors and bad grammer found, are free and yours to keep Current bond : PFA05 500b / Total 825b |
Vaerah Vahrokha
Vahrokh Consulting
5500
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Posted - 2014.08.06 14:58:00 -
[15] - Quote
Angelica Everstar wrote:A trust in the holder of collateral was/is always needed (usually why 3rd parties are used), regardless of the changes to BPOs' value.
That level of trust will likely need to be bigger now, as the difference between possible sell value, and quick sell gets larger for BPOs. Other types of collateral where/are also like this, in that there is a large difference.
I have held 100B for myself and probably more for third parties, Grendell / Chribba even more than that. Do you think anyone are going to give a stink about handing us their 2B BPO or even 10B worth of BPOs?
Auditing | Collateral holding and insurance | Consulting | PLEX for Good Charity
Twitter channel |
Angelica Everstar
34
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Posted - 2014.08.06 16:00:00 -
[16] - Quote
Well I have trusted Chribba with 500b, and would do it again. Will actually likely do it again :-D
3rd parties holding collateral will likely not feel any real change due to Crius (my guess). Bonds without a 3rd party will need a higher level of trust due to Crius (IMHO). But likely not course large changes. I believe that my upcoming pawn shop, will surely be using BPOs and dont except any issues over this change. Any typos, spelling errors and bad grammer found, are free and yours to keep Current bond : PFA05 500b / Total 825b |
Tau Cabalander
Retirement Retreat Working Stiffs
4010
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Posted - 2014.08.06 17:26:00 -
[17] - Quote
I personally wouldn't want to handover my BPO for less than the replacement cost, but I don't know if the resale market is willing to accept those prices, yet.
All my battleship, carrier, and dreadnought BPO are ME 10%. My Rorqual is 9%, and I will spend the billions to get it to 10%, simply because I am a collector. I don't expect the Rorqual to valued as much as the Archon or Moros though.
I've not seen any 10% capitals on contract yet, but that may mean they just get purchased quickly. |
Rain6637
Team Evil
15576
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Posted - 2014.08.07 11:34:00 -
[18] - Quote
Angelica Everstar wrote:Well I have trusted Chribba with 500b, and would do it again. Will actually likely do it again :-D
3rd parties holding collateral will likely not feel any real change due to Crius (my guess). Bonds without a 3rd party will need a higher level of trust due to Crius (IMHO). But likely not course large changes. I believe that my upcoming pawn shop, will surely be using BPOs and dont except any issues over this change. chribba is awesome, for a reputation that is more valuable than ISK. his contact info should be included in rookie tutorials. joking kinda
what's funny is his fees are lower than the time it takes for him to write an EVEmail.
great guy. President of the Commissar Kate Fanclub | Rainfleet on Twitch | Twitter | Rainfleet mk.III | Imgur |
Patty Loveless
Minute to Midnight
2
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Posted - 2014.09.09 21:00:00 -
[19] - Quote
Highly depends on the BPO. As stated above, some BPOs are over saturated, some are valuable, and some are rare very much worth it.
And this isn't just purely 'Expensive BPOS are always worth more'. Look at super cap bpos and the tragic fall they crumbled to. I bet a lot of people would be content getting out of them at npc + 5-10% |
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