With the recent development and expansions of EVE I believe its time to take the step to create a better capital market.


Creation of a "risk free" rate.

In order to value all other financial products in Eve, a risk free rate is essential.

The major and minor factions all pay ISK to players via missions & bounty prizes and they receive ISK via transaction taxes, skill books etc. However they are running a deficit which is covered by "printing" ISK and hence increasing the money supply.

Instead of printing ISK, CCP can create a risk free rate by selling bonds through EVE market (at NPC bank stations) to cover the defecit.

I suggest 3 types of bonds: 1 week, 1mth and 3mth bonds, which are sold every Sunday.

All bonds will have a notional of 10mio ISK and the rate determined by selling price. Players can enter market orders at fx 99.00 which means that the player pay 9.9mio for the bond and receive 10mio at maturity. CCP start filling highest bids first and fill them until the deficit have been covered. If rates get to high or market orders cannot cover the deficit , CCP central bank will buy the outstanding bonds by printing.


To make the system more realistic and incorporated with EVE universe the current currency ISK which is completely unrealistic need to be replaced. ( https://forums.eveonline.com/default.aspx?g=posts&m=2974285#post2974285 )


Instead of 1 currency (ISK) , 4 new currencies wud need to be created , each printed and regulated by the major factions: Caldari yen -Ñ , Gallente Mark , Minmatar pund -ú and Amarr franc Géú.


We need these changes to create a free banking system and later a efficient stock & bond market. I will create another thread on these topics later.

RAW23 you have no substance behind what you are saying.
The only thing you can say, is that its a bad idea. If you have no arguements please remove your post and refrain from participate in the future.

One topic you raise (without any substance) is that you are affraid that players receive a return on an investment.
I dont see your point in that, its a principle derrived from RL economics and a compensation for not having access to your money in a period of time.
Yes people get a return but as the money is not availeble for them inflation will go lower. Also people generally invest their money into ships and equipment which might give them a return. This will just be an alternative.

Finally, It will put pressure on the State (CCP) to get a balanced fiscal policy in EVE and not running large defecits forever.

If you have no arguements please remove your post and refrain from participate in the future.

One topic you raise (without any substance) is that you are affraid that players receive a return on an investment.
I dont see your point in that, its a principle derrived from RL economics and a compensation for not having access to your money in a period of time.

Yes people get a return but as the money is not availeble for them inflation will go lower.

Also people generally invest their money into ships and equipment which might give them a return. This will just be an alternative.

Finally, It will put pressure on the State (CCP) to get a balanced fiscal policy in EVE and not running large defecits forever.

Let me outline the end goal first:
In the future I would like to see player owned factories, banks, research facilities, universities etc. all build on RL principles.

These instituions will give players in EVE more choices and be the foundations for PVE wars over real assets not just ganking and griefing.
These institutions would have to be so expensive to build and maintain that you would have to go to the capital markets in order to secure the funds needed.

The foundation for capital markets go back to the most basics cost of capital and hence the need for a "risk free " benchmark.

Its true that Investors in state backed assets will receive a return and it will be a cash flow stream into the EVE economy. However as CCP now will have to balance the books it would properly have to create other income streams elsewhere to offset this.

Finally a risk free assets proberly will not yield that much that you will see a spike in inflation based on this. The liquidity they drain from the system will properly be more inflation dampening if anything.

The objection is that they get a risk-free return, not just some return.

This shows that you have little idea about the quantity of idle isk in eve. Providing new investment opportunities for isk that would, in most cases, be sitting idle anyway, will not decrease inflation.

Investing in ships and equipment has risks. The value of your investment may go up or down and it takes skill to gauge the likely trajectories of the market. What you are suggesting is not comparable at all, since there will be no risk of loss and no skill involved. In addition, profits will not be earned through interaction within the player driven economy (i.e. transferred from one player to another) but will be created out of thin air.

No. What you are suggesting is based on a baffling conflation of CCP with the fictional states in eve. The only thing your suggestion will do is introduce another way for players to receive isk from CCP. It will not, in any way shape or form balance anyone's budget because ... and this is amazing stuff ... the NPCs will not be making money from any invested isk. It will simply sit idle outside the game economy for a while and then be returned with interest. What you are suggesting will actually exacerbate the problem you want to solve.

Have you played eve? We have all those things.

Why? We have capital markets already in eve and just as in the real world they don't depend on a risk free benchmark that is secured by god.

No no no ... You are confusing ingame stories with game mechanics. CCP doesn't have to 'balance the books' of ingame entities.

What are your grounds for this claim? From my experience of the eve capital markets there are vast quantities of excess isk in the game doing nothing and earning nothing. Providing a venue for this isk to earn money will not take any money out of the active economy. It will just sit idle in a different location while at the same time also creating new streams of isk into the economy.

posting in a uniquely garbled MD troll thread. I can't believe you got taken in, Raw.

risk free

When we have created a good sound foundation for currency and government issued assets we can move on to create a banking system which means that players will could get access to money in more ways: cash, credit cards, debit cards.

Let's discuss.

OP must be a troll.

Solving an increase in money supply by selling bonds (creating an increase in the money supply)? And buying back high-interest bonds? Dude, do you work for the Federal Reserve?

... and Minmatar Drachmas (duct tape held together republic).

OP must be a troll.

Solving an increase in money supply by selling bonds (creating an increase in the money supply)? And buying back high-interest bonds? Dude, do you work for the Federal Reserve?

Stocks and bonds, sure it would be nice, but this idea? No thanks.

ISK must maintain its, for the most part (nerf insurance), time/effort cost to produce. NPCs just magic printing it for no other reason than a player purchased a ticket for more free ISK is a bad idea.

ISK must be produced by player effort, end of story.

I am not going to comment on some peoples hash statements

Let's try and get back on topic guys. The OP seems to have a good heart. But I suggest something little different.

CCP will never do this, so we must take it upon ourselves to create a trusted banking organization that can float the bonds. Not just anyone can do this though, so I immediately think of myself.

I propose creating a central bank. This bank will have regional banks reporting to it. Instead of doing everything from scratch, we'll utilize the major nullsec powers. Each will be responsible for their own areas, but final authority will rest with the central bank. To promote new ideas, voting powers will alternate between the various regional banks.

Let's discuss.

Yes perhaps CCP will never adopt this approach and there could be many reasons for this. Maybe programming costs will be to high, maybe other projects seems more imminent and many many more.
I still believe its important to have the discussion about this topic though as Eve is one of the few games which actually do try to incorporate lots of real world standards and practises.

Obviously CCP have made its own thoughts about the economic climate, they use to publish the Quarterly Economic Newsletter and still have Dr. Eyjolfur Gudmundsson on their payroll.

I like the idea of the creation of active central bank which is consistent what I was proposing as well. It would be the natural first step before creating 4. With the 1 central bank created it will lay the foundation of player operated banks in the future.

WE DONT WANT PLAYER OPERATED BANKS!!!
It didn't go so well last time, and its probably a scam...

I do not believe you speak for all players in EVE.
So the best you can say is that YOU dont want player opereated banks.

Your argument seem to rest on past experiences, where the bank was in fact not a bank, but a scam.
And I agree, under the current rules, regulations and optionality of the game it is very hard to operate a real bank. This however do not need to be the rule of the future.

I am not going to comment on some peoples hash statements like: "get out" or "this is a weird thing". If they do not have any real arguments I will only hope they will stay away from this thread in the future.

And now we see the TIN FOIL HAT: OP just wants to open a new bank.... (cough *scam*)

So you offer us a system where we will have not scam banks, but normal ones, same as we have in RL, the ones we all hate..great..

BTW, They called from the RL bank, they want their floor cleaner back..you run boy gogo...

RAW23 your posts show that you as a person have very limited personal qualities and no qualifications.

Are you part of the weirdos in the occupy wall street movement??
I suggest you go back to your park with all the other criminals who just want free stuff and live off the government tit.


I offer a free system which gives opportunities to everyone who wants to put ideas into action and create a brigther future for themselves.

RAW23 your posts show that you as a person have very limited personal qualities and no qualifications.
This is properly due to your young age. I suggest that we speak again once you at least have a high school diploma - So contact me again in 6 years time.

Now this thread is going places.

If you want a free capital market this is the first baby step in this direction.

ISK cannot be produced by player efforts in any way. Only its value are derrived from player operations like mining, R&D and manufacturing.

I offer a free system which gives opportunities to everyone who wants to put ideas into action and create a brigther future for themselves.

Are you part of the weirdos in the occupy wall street movement??

If you want a free capital market this is the first baby step in this direction.

NPCs are already "magically printing" all ISK at the moment!
And as long as no free banking system exist all ISK will continue to be printed by NPCs.

ISK cannot be produced by player efforts in any way. Only its value are derrived from player operations like mining, R&D and manufacturing.

GET OUT

The capital market in Eve suffers due to trust and lack of proper means of retribution. Focus there.

Central bank is not a prereq for a free market. At all.

"ISK can't be produced by players, except for all of those player industries that create value and therefore ISK"

Care to try and prove that? Good luck. Also stop tossing around phrases like "free capital market", sounds like a politician proposing 5,000 pages of government regulations and calling it "free trade" when real free trade is the absence of government meddling.

The capital market in Eve suffers due to trust and lack of proper means of retribution. Focus there.

You are confusing philosophies.

ISK is produced by players when players go out and shoot rats, transport NPCs goods and a few other activities. Stop thinking of ISK in its RP/Lore terms and consider what it is from a functional perspective.

Now if you want to stop rat bounties and other faucets, and replace all faucets with something else, that would be a different discussion and that may lead to some interesting conclusions. However, what you propose, with out also proposing the removal of the other faucets will not work.

It will indeed be a difficult task to prove this academical. I would have to spent 100s of hours writing a working paper like that.
All I can refer to now, is my last post where I outline some of the most obvious benefits.
If you believe there will be a better approach please post.

Care to explain?

I disagree that ISK are produced by players - They are produced by NPC corps and given to players for payment of services.

My proposal of having a central bank issuing bonds to cover the deficit (faucets - sinks) should not be impossible at all.
I have following numbers from the last pieces of the quarterly economic newsletter 2010.

Money supply grew approx 30% (or 0.5% in average per week) in 2010 to 445 trln where 258 trln was held on active accounts.
This is the best proxy we have to calculate today's deficit. So today the weekly requirements would be approx 4.3 trln isk which needed to be raised from a market holding 490 trln on active accounts. As I pointed out in my original post, I still believe the central bank should have the option to print in order to buy the securities in order to keep the interest rate within the desired range.
With these numbers i do not believe we shud fear that the interest rate will be very high on the central bank securities.

Should current faucets be replaced? Yes in the future I believe better mechanics could be adopted, but it will depend on which road CCP will take. Again I think we should discuss these things in greater detail in a different forum.

Clearly we here are all raging collectivists, as evidenced by our opposition to quasi-Keynesian fappery . . . wait never mind.

Pretty much this, and its amusing that he talks about the capital market in EvE, has Bad Bobby post on his thread and he doesnt know who Bad Bobby *is*, or why he is important for any discussion of bonds in EvE.

Compared to that, him not knowing EvE already has a risk free rate of return (its zero) is pretty minor.

Go to eve-search.com, go to the MD forum, search on the words stocks and the word bonds. You will find a number of proposed ideas.

And I don't care if you've spent 100s of hours doing a paper. If you can't sum up your thesis in one nice little paragraph, then I suggest make an examination of the concept known as opportunity cost and reexamine that 100s of hours. Sorry if it makes me sound like an ass, but I am not going to give any weight to vapor.

Never again make the suggestion or entertain the idea that NPCs pay interest on some risk free instrument and you'll be off to a better start. That is the main issue with your idea.

We have lore, and we have reality. in lore, rats (NPCs) are evil pirates floating around doing nasty things. In reality they are sheep waiting to be fleeced by players.

Do not confuse the lore of Eve with the reality of Eve.

Players are paid for their services, as you say. But why? Because a player spent time and effort to go do something. It may be true from a "lore perspective" that some NPC central bank some where printed up a bunch of ISK. But the reality of the situation is, the only way for that ISK to enter into the Eve economy is by some player expending time and effort.

Time is the only real commodity in Eve.

Here's an example, do asteroids pay players in veldspar? No, do asteroid belts print veldspar? No. It is simply there. The only way for players to obtain veldspar is to go spend time and effort to collect it. ISK is no different in this regard.

No one cares about NPC deficits. NPC do not pay subscriptions, they are immune to politics, they are immune to sleep. They do not matter in the grand scheme of things. NPCs do not need to feed their children. You can blow up 50,000 faction police and they won't even consider thinking about breaking a sweat.

Again, NPC do not need money, they are not thinking entities. They can make no value judgements.

When you clearly demonstrate you understand what ISK is, from a functional perspective, and I see a glimmer that you understand that money is simply the most sellable abstraction of labor in a market, then we can have further discussions.

Let's fix the misconceptions first. :)

Although I like it when the eve economy emulates the real world economy, I don't like it when it is taken out of the players hands and is controlled by CCP. I find that the stepping stone argument, till we have player controlled banks doesn't hold any credence. EVE can never have player controlled banks for the the public as a whole. No repercussions, no control and the utility of stealing the assets is always higher than keeping the bank active. The whole banking system is based on trust (heard of "bank runs"), and sadly in EVE if you trust someone you don't know, then you are playing the game wrong.

The problem of inflation is already solved by the systems of isk sinks and faucets in EVE. RIghly the npc pays them out, but you are wrong in that the npc controls them, it is actually the players that do. Because through supply and demand the players can decide what activities they want to do, and hence decide (as a collective) what the money supply rate is going to be.

Let me give you an example. Say many people are ratting (isk faucet) increasing the money supply. Now according to the rules of supply and demand isk should become "cheaper" relative to other commodities (inflation) such as moon goo, minerals etc. and by that relationship those things will become more "expensive" relative to isk. Their prices will increase, till the point that the isk/(hour/effort/risk/fun) becomes more than ratting, making more people actually mine instead of rat, reversing the previous effect, reaching an equilibrium state again. Obviously things are not perfect, because people are not perfectly rational and will still do missions instead of incursions, but the system is sufficient to keep things in a balance "range" and theoretically should deliver the intended results of keeping the money supply in balance with the various commodities in the game.

As you can see from the above example the players are the ones controlling the supply of isk relative to the commodities through the ever famous "invisible hand". This emulates the real world not by method, but by result (which is great) and leaves the supply in player hands. (the real world statement here assumes "no government' and "no central bank")

Just an addition since we are on the topic, as some insightful people have said before, EVE can never fully emulate a real world independent economy, simply because there are no means of innovation, and all forms of it are controlled and introduced by CCP, seemigly close to live overlord aliens if you like. Without innovation we will always be constrained to the range of prices CCP deems "appropriate" for the items in the game. Innovation in the real world is the main driver of the overall economy industrial revolution, the internet etc...). If CCP can introduce innovation into the game (truly an almost impossible tank, if not impossible) then they will have achieved a feat no one can equate to in the gaming industry.

And yea if you still are adamant about player controlled banks, please send me all your iskies and with the capital i'll start one asap, with 200% yearly interest rates.

And yes i did use the word "emulate" quite extensively in the post, but it just sounds nice and makes me sophisticated, so bugger off.

Their prices will increase, till the point that the isk/(hour/effort/risk/fun) becomes more than ratting, making more people actually mine instead of rat, reversing the previous effect, reaching an equilibrium state again.

Just an addition since we are on the topic, as some insightful people have said before, EVE can never fully emulate a real world independent economy, simply because there are no means of innovation, and all forms of it are controlled and introduced by CCP ...

People do care about NPC deficits as this is one of the most important factors behind inflation which players discuss all the time.

What you are suggesting will inflate the money supply even more.

Now, let's suppose that interest rates were 50,000%. It still would not stop NPCs from spending because they are NPCs, they do not think, they can make no value judgements. In the real world, governments are spending money like crazy and central banks are finding every excuse and method to expand credit and they are supposedly rational human beings. NPCs are not people, they care about stupidity even less.

If you really want to fight monetary inflation in Eve, then pay careful attention to the points made by Joan Greywind, in this thread and listen to RAW when he says you are wrong.

Please stop taking debate lessons from Harry Forever.

I am not convinced that inflation happens in eve to an extent that is of concern.

Inflation would imply that disposable income decreased, and that prices rapidly increased across the board.

We do not see that.

We see that prices of items move with mineral prices, and at the same time, a large chunk of stuff has changed little in price over time.

Most price changes are due to tweaks to the game, or mineral changes (and other raw material costs). Inflation implies there is an affordability issue. This is definitely not the case.

I suggest that we draw up an outline of how a player-run project like this could work. We can then present it to the Mittani for consideration.

Your bonds will do nothing to reduce the money supply since they are a risk free return of ISK upon maturity. All you are going to accomplish is trade one form of credit for another.

I can see that you do not understand money and credit. I will take RAW's advice and instead eat pop corn

In the CCP quarterly economic newletter inflation concers have been raised in the past, but I do agree with you in most of your observations. However my suggestion of creating government securities was never meant to control inflation as primary function but merely as the step stone towards liberal capital markets. The inflation controlling element in my suggestion is however just a positive effect which CCP can use actively to manage the money supply better.

No need to get grumpy just because you are wrong.

The capital market in Eve currently has zero rules from CCP regulating it. How does creating a new game mechanic which issues NPC bonds make the capital market more free? It does the exact opposite as it would create a floor in which interest rates could not fall below.

Hypocrite much, Harry?

P.S. You have been wrong ever since your first thread "https://forums.eveonline.com/default.aspx?g=posts&m=2978985#post2978985"

You've not learned anything yet, still running around with your sophmoric understanding of what ISK is.

buddy just let it go , you lost the argument about money supply and now you are just getting desperate. Better if you just go back to your popcorn as you said you would do.
I am not sure you have any real interst in this field anyway as you do not make any real comments on the substance behind the suggestion.

I can't decide if OP speaks English as a second language. His sentences rarely make it from start to finish without weird leaps of logic and odd phrasal constructions. I guess it doesn't matter, because none of this is ever going to happen and if OP wanted it considered as an actual game mechanic, he should be posting in Features and Ideas.

Now, let's argue about something more constructive, like how many angels can dance on the head of a pin.

I do not want this thread to be about my English. However if you need me to clarify any past sentences which I may have constructed wrong or where I did not explain myself good enough I will be happy to do so now.

You may have been right that the features and idea forum would have been a better choice for this thread. I chose this forum because it is market oriented and its not uncommon that players post ideas and suggestions here as well.

Creation of a "risk free" rate.

The risk free rate in EVE is the inflation rate, we already have one.

Best statement in the whole thread.

Also for those interpreting "risk free" as literally risk free... it's a financial term for a theoretical rate. Even IRL the risk free rate is not risk free.

With the recent development and expansions of EVE I believe its time to take the step to create a better capital market.


Creation of a "risk free" rate.

In order to value all other financial products in Eve, a risk free rate is essential.

The major and minor factions all pay ISK to players via missions & bounty prizes and they receive ISK via transaction taxes, skill books etc. However they are running a deficit which is covered by "printing" ISK and hence increasing the money supply.

Instead of printing ISK, CCP can create a risk free rate by selling bonds through EVE market (at NPC bank stations) to cover the defecit.

I suggest 3 types of bonds: 1 week, 1mth and 3mth bonds, which are sold every Sunday.

All bonds will have a notional of 10mio ISK and the rate determined by selling price. Players can enter market orders at fx 99.00 which means that the player pay 9.9mio for the bond and receive 10mio at maturity. CCP start filling highest bids first and fill them until the deficit have been covered. If rates get to high or market orders cannot cover the deficit , CCP central bank will buy the outstanding bonds by printing.


To make the system more realistic and incorporated with EVE universe the current currency ISK which is completely unrealistic need to be replaced. ( https://forums.eveonline.com/default.aspx?g=posts&m=2974285#post2974285 )


Instead of 1 currency (ISK) , 4 new currencies wud need to be created , each printed and regulated by the major factions: Caldari yen -Ñ , Gallente Mark , Minmatar pund -ú and Amarr franc Géú.


We need these changes to create a free banking system and later a efficient stock & bond market. I will create another thread on these topics later.

this is perfect, i already mentioned the next expansion should be an economy expansion where trading, market data and reporting gets improved, adding a real banking system with currencies, stocks and bonds would be highly recommended!

however all the kids will freak out and start shooting statues again, because they would not have a clue what it is about :D fantastic!

OK thread was locked for cleaning, and I want to make a couple of points clear:

1. The whole thread was read by me.
2. I deleted a couple of posts that were beyond a reasonable discourse.
3. Please do not use the moderation system as a way to squash arguments.


That being said, be civil and this thread will stay unlocked.

This thread is nine months old

This thread is nine months old

As an economy nerd you just gave me an orgasm.
Realistically speaking tho, the system would not work well with the current eve framework. If you introduced some risks on those bonds however, interesting things could come out. Risk free bonds would be a disaster, but what if there was a risk ? It's politics, after all.

...and it's still being linked to, which means new readers had to slog through post after post of major jerk factor in order to read anything useful.

Who on earth is still linking to this thread?

Who cares?

HTFU and GTFO.

Ah - I see you are a veritable fountain of terrible ideas that demand unnecessary CCP interference in the game. I fully understand your attraction to this thread now.

As an economy nerd you just gave me an orgasm.
Realistically speaking tho, the system would not work well with the current eve framework. If you introduced some risks on those bonds however, interesting things could come out. Risk free bonds would be a disaster, but what if there was a risk ? It's politics, after all.

...

The major and minor factions all pay ISK to players via missions & bounty prizes and they receive ISK via transaction taxes, skill books etc. However they are running a deficit which is covered by "printing" ISK and hence increasing the money supply.

Instead of printing ISK...

With the recent development and expansions of EVE I believe its time to take the step to create a better capital market.


Creation of a "risk free" rate.

In order to value all other financial products in Eve, a risk free rate is essential.

The major and minor factions all pay ISK to players via missions & bounty prizes and they receive ISK via transaction taxes, skill books etc. However they are running a deficit which is covered by "printing" ISK and hence increasing the money supply.

Instead of printing ISK, CCP can create a risk free rate by selling bonds through EVE market (at NPC bank stations) to cover the defecit.

I suggest 3 types of bonds: 1 week, 1mth and 3mth bonds, which are sold every Sunday.

All bonds will have a notional of 10mio ISK and the rate determined by selling price. Players can enter market orders at fx 99.00 which means that the player pay 9.9mio for the bond and receive 10mio at maturity. CCP start filling highest bids first and fill them until the deficit have been covered. If rates get to high or market orders cannot cover the deficit , CCP central bank will buy the outstanding bonds by printing.


To make the system more realistic and incorporated with EVE universe the current currency ISK which is completely unrealistic need to be replaced. ( https://forums.eveonline.com/default.aspx?g=posts&m=2974285#post2974285 )


Instead of 1 currency (ISK) , 4 new currencies wud need to be created , each printed and regulated by the major factions: Caldari yen -Ñ , Gallente Mark , Minmatar pund -ú and Amarr franc Géú.


We need these changes to create a free banking system and later a efficient stock & bond market. I will create another thread on these topics later.


EDIT:
I have been criticised by some players not to outline the bigger picture, so I will try to outline it here:
(This thread is only based on step 1-5, but i hope we can discuss some of the next steps in other threads)

Step 1. Creation of 1 active central bank which issue fixed income securities based on the deficit.

2. Creation of a secondary market for state securities.

3. The One central bank is divided into 4 banks, each issuing securities within their respective area but in the same currency (ISK).

4. FX Market: 4 new currencies are introduced. To avoid distorting the market, NPC banks will act as FX Brokers and FX exchange rates are pegged to each and Plex. Bid-ask spread will be set at <0.5% keeping transaction costs very low in the beginning.

5. When players have gotten more use to the new concepts FX rates can be widen to a band of maybe 5-10% (later maybe even more). Players can then start acting as FX dealers and brokers.

6. When the first 5 steps have been implemented, the state securities will now hold both FX risk and Inflation Risk.

7. Creation of active NPC banks reporting to their respective central bank. NPC banks already exist in EVE, but they do not play any role.

Players would have to actively choose a banking relationship - as all the banks are NPCs no difference will exist and interest will not have to be paid on accounts.

8. Player Corporation debt issues. The framework for private debt issues have been created, however private issues are much more complex than the ones of the state and it raises following concerns which need to be dealt with:

A genuine need for public money are needed. Almost anything in EVE are not more expensive than a dedicated player can earn the money fairly easy.

In RL public money are needed because no single individual (excluding maybe the richest families on the planet) will be able to fund and operate their own car factory or large ship yard.

Covenants GÇô as it has been raised early in the thread, No investor protection exist in EVE. This will have to change.

9. Player corporation equity issues (IPOs).

10. Most of my ideas here are based on the foundation that Eve players (corps) should have the freedom to pursue the career they want.

Hence Player customers should always have a choice between expensive NPC goods and services or Player operated industries which can offer better and cheaper products if they are well managed.

Final remark will be that if a FX system gets to complicated to implement due to CCP programming costs or lack of liquidity the rest of the steps would be achievable anyhow.

Bonds become available by EVE bank, secured by CCP. There is no risk. The bond is for 1m each, with a payout of 1%.

I invest 100b into bonds immediately. This provides me with 100,000 bonds. Each one pays me 10,000 isk upon maturity. Each maturity date I earn 1% compounding, or 1b after the first one. Let's be generous using the OP's original numbers and say the maturity is for one month (a ridiculous ~12.5% per annum, risk-free). It is now possible for me to quit eve, sans logging in once a month, and continue to train my character and stay subscribed - indefinitely.

That is, of course, assuming PLEX prices stay the same. But why would they? There are EVE trillionaires. They're earning 10b/month. Do they plex 1 account? Do they plex 10 or less?

Let's say this EVE trillionaire, named Chribbbbbba, who does not own several titans, decides to invest half of his wealth to forever play this game. He no longer has to do any work to stay in the game, nor pay money from his bank account. Every month he pulls a magical 5b out of his ass. Within two years he can afford an extra titan at pre-bond prices. He's earning a spank ~7% per annum for doing nothing. Oh and did we mention this scales infinitely?

But wait! OP says! We'll just double isk bounties, PVE will be revived!

Laying out bait to get the thread closed, eh?

Bye bye now.

ISK seems to be balanced, thus your rational for change doesn't seem to exist.

---

CSM8 - August 2013 Summit Minutes


Dr. EyjoG said...


The next graph showed the money supply. Overall, the money supply is evening out--changes to systems have reduced the ISK supply, so average ISK in active wallets is stable as of November 2012 and the maximum amount may even be peaking. While Mike points out that the leveling-out at the top of the graph is very short, Dr. EyjoG responded that it was the first plateau visible at all. Sinks and faucets are fairly balanced right now, with a bit more faucet than sink to allow for economic growth.

------

Creation of a "risk free" rate.

In order to value all other financial products in Eve, a risk free rate is essential.

Sorry, after the first paragraph or two, I didn't see any mention of what purpose they serve. Who is the large organization seeking to take on debt in order to finance short term? who has the ability to control money supply to pay back the bonds?

This looks like a solution without a problem. If you really wanted to try it, having the NPC corps offer you the chance to buy bonds, pay dividends based on taxes, and have it take from the same pool bounties do (which there isnt one ATM) etc. and recirculate the money woul work, but you'd have to have a group basically act like a central bank, setting the payout.

And the best part? None of this encourages gameplay on any level at all.

So let me ask those people, do you find it fair, not to get compensated for not having access to your money for a period of time? and do you not believe in Cost of Capital?


The real world works this way and I believe it would be beneficial to Eve if they adopted similar standards. Communism is gone so lets adopt the economic principles from the free world.


If we in the future would like to see a liberalised EVE banking sector, maybe even private player operated banks and free economy standards this suggestion is one small step in the right direction.

It will set standards for cost of capital and bring awareness to players of financial issues into the game.

I want to create the foundation for a functioning private debt market.
And since one of the best ways to value debt is: "Risk-free" index + Risks (credit risk, liquidity risk, covenants, market risk etc)
It would be natural to create the risk-free index first.

This is literally nonsense.

I like the idea of adding a bond market to the game.

I don't like the concept of "risk free."

You can't have EVE without risk. Substantial risk. Sometimes even losing all your ISK risk.

What are the ways you can think of that players can influence--even temporarily halt--the bond market you're proposing?

Should the value of bonds instead be tied to stations? Such that the value of a bond is linked to the "value" of a station in terms of market activity in and out, ore reprocessing and all other activities where players pay a fee to the station and otherwise conduct their business there?

If players don't invest in bonds in an NPC station, could a station degrade over time (i.e. start to lose or close services like Medical Facilities)? Likewise if player activity is halted, for however long, could this have an effect on the station and its bonds?

Can there be bond rates based on other factors? The value of a solar system, constellation, region?

It seems to me that the wider the area the more reliable a bond should be, whereas the smaller an area the less reliable.

Likewise, the rate of return should be smaller for a larger area, but bigger (and more volatile) for a smaller area.

Right before bonds are due, could there be mission arcs or faction warfare scenarios where players can try to sink the value of bonds "for the other side"?

Sort of a way for one large group to mess with the wallets (or rather, the bond returns) for other player's wallets?

Furthermore, why would i ever invest isk in a real person ie on this forum if I can get a risk free return somewhere else?

This is literally nonsense.

Claims to want to promote a private market for debt.

Proposes a system that would squeeze or obsolete player-offered bond offerings by having NPCs offer a zero-risk version of the same.

...The main retaional was to expand the sandbox and eventually allow a player operated debt market to function...

Isn't the biggest issue with player operated debt now accountability?

For example, if I started a 'bank' today; and had thousands of people invest trillions of ISK... tomorrow I could just steal it all. I could sell or recycle this character and disappear... or just keep this character and there wouldn't be any recourse for those cheated to recover their money.

In a game, like EvE, in which deceit and deception are such an integral parts... how do you overcome this issue?

A system like that can still be gamed, use a worthless figurehead CEO character, take down anything in space, etc. just before you default.

Let me first say that I admire you for your alternative career path in Eve. You create content and fun beyond the normal boundaries of the game.

But as stated earlier the GÇ£risk free index/rateGÇ¥ do not mean you avoid all risks. It simply refers to the fact that the security does not hold default Risk.

A form of asset backed municipal bond linked to faction ware fare is an interesting suggestion.

There is no such thing as bullet proof.
CCP will never behave as the SEC of EVE
No player organization will ever have the leverage to be the SEC either

All of this is a moot point IF we had a functional shares system