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Hexxx
Sebiestor Tribe Minmatar Republic
47
|
Posted - 2014.05.08 16:41:00 -
[1] - Quote
Yeah...the title is long. Sorry.
So here's what I'm giving you; a proposal for a debt focused exchange with an automated credit rating mechanic.
Here's what I'm asking for; feedback on what it should include or control for in order to be adopted and/or "work". If there's low participation this just won't work. I'm more then half way through creating my use cases for the software and figured now would be a good time to get commentary from potential stakeholders to ensure my requirements design has all the use cases it needs before I decide to keep going and produce a technical design. I'll publish use cases later if I decide to keep pursuing this.
The Exchange GÇô Design Document
Disclaimers: GÇóIGÇÖm not committing to building this GÇô IGÇÖm simply considering it GÇóThe purpose of this is to gather feedback on the design GÇóThis document can and will change, nothing here represents the final design nor serves as a commitment to future financial policies.
Objectives GÇóTo create a better capital market for large Corporation/Alliance debt financing. GÇóTo create a market that self-regulates the GÇ£creditGÇ¥ of debt sellers. GÇóTo create an active speculative market based on debt derivatives that provides visibility into market sentiment on the GÇ£creditGÇ¥ of debtors.
Self-Regulations of the Exchange GÇóThe Exchange will not use any amount of moneys in escrow accounts for any purpose. Period. Full stop. GÇóThree Auditors will be selected and given the full API Key Character of the Exchange. Total funds held by the Exchange should be equal to the amount in the in-game wallet of the Exchange. Auditors are chosen based on the judgment of the Exchange but public opinion and comment is desired in order to provide a reasonable assurance to the public on the ExchangeGÇÖs compliance with its own Financial Policies.
Things Worth Pointing Out GÇóDefinition of CDS: Credit Default Swap - A derivatives contract, the spread of price and recovery is a reliable measure of market perception of risk, hence the "automated credit rating mechanic". Since people can make money off of these, it encourages their use and ultimately determines their utility to Bond investors. GÇóCustomers are not permitted to make use of GÇ£marginGÇ¥ trades. All trades must be GÇ£coveredGÇ¥ through existing funds placed in escrow. This applies to Bond shares and CDS contracts. GÇóThe holder of a CDS does not need to be an owner of the underlying debt security from which it is derived. In real world markets there are critics that assert that "naked" or synthetic CDSs should be banned, comparing them to buying fire insurance on your neighborGÇÖs house, which they claim creates an incentive for arson. GÇóEach GÇ£DayGÇ¥ is defined by its beginning and end GÇô Midnight GMT, aligned with 00:00 EVE Time. GÇóHopefully obvious but this will be a web application with links to EVE via the standard methods used by my previous work, EBANK and EVE Insurance. I also made an EVE Audit application but killed it before I launched it - flat out too complicated to be usable. GÇóIt is neither my plan nor my intention to make in-game money off of this. This is just how I play EVE - 100% meta.
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Magnu Stormhawk
Stormhawk Enterprises
45
|
Posted - 2014.05.08 16:55:00 -
[2] - Quote
Welcome back. Nice entrance too :) |
Bad Bobby
Bring Me Sunshine In Tea We Trust
439
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Posted - 2014.05.08 16:57:00 -
[3] - Quote
Just dropping in to say "Hi!" as it's nice to see you're still around.
I can't really offer you much in the way of feedback on your scheme, since I don't really understand any of it. Maybe that indicates that you need a more idiot friendly description of what you are doing?
I wish you the best of luck! |
MailDeadDrop
Rage and Terror Against ALL Authorities
312
|
Posted - 2014.05.08 17:13:00 -
[4] - Quote
Great to see you again Hexxx. Are you making a fundamental error of "previous trustworthiness is no guarantee of future trustworthiness"? I guess I'm not seeing how the "credit" of debtors is set.
MDD |
Hexxx
Sebiestor Tribe Minmatar Republic
50
|
Posted - 2014.05.08 18:08:00 -
[5] - Quote
MailDeadDrop wrote:Great to see you again Hexxx. Are you making a fundamental error of "previous trustworthiness is no guarantee of future trustworthiness"? I guess I'm not seeing how the "credit" of debtors is set.
MDD
A good point - while credit in real world scenarios often deals with inferring credit worthiness based on historic events this model does not. The way that "credit" is determined is by real-time trading of CDS contracts and their respective spreads. If the "cost" of the contract is relatively far away from the "payout" then the credit risk of the underlying debt instrument is low per market sentiment. Likewise, a "cost" that is close to the "payout" can be interpreted as a high credit risk. A simple ratio between these two can provide a simplistic, automated, real time credit rating mechanism.
I'm actually working on a few different models of CDS contract and may throw it all out in favor of a simpler contract mechanism - that said, the idea of the cost of contract and the payout in the event of a default will remain. Think of it as a miniature, trade-able, insurance contract (somewhat of an over simplification, but there it is). |
Hexxx
Sebiestor Tribe Minmatar Republic
50
|
Posted - 2014.05.08 18:11:00 -
[6] - Quote
Bad Bobby wrote:Just dropping in to say "Hi!" as it's nice to see you're still around.
I can't really offer you much in the way of feedback on your scheme, since I don't really understand any of it. Maybe that indicates that you need a more idiot friendly description of what you are doing?
I wish you the best of luck!
Fair point - I'm working on some example scenarios but since I haven't totally decided on the exact CDS contract mechanics yet I'm hesitant to post them but I think examples would help and I'll work to get them up in the next day or so. |
Xinryu
DH Industries
0
|
Posted - 2014.05.08 18:36:00 -
[7] - Quote
An interesting proposal. I've got a couple of questions:
1) Regarding the use of a single character as the executor of the exchange: I'd imagine there would be advantages and disadvantages of using a corporation instead, allowing multiple individuals to execute orders on the market. Can you see any definitive reason(s) to use one over the other?
2) Risk assessment: you mentioned that your current idea of a credit score is rather fluid and based on the CDS contracts themselves. Would it be beneficial to include a score based on the individual(s) requesting said CDS contracts?
All-in-all, an interesting idea. |
Hexxx
Sebiestor Tribe Minmatar Republic
50
|
Posted - 2014.05.08 18:45:00 -
[8] - Quote
Xinryu wrote:An interesting proposal. I've got a couple of questions: 1) Regarding the use of a single character as the executor of the exchange: I'd imagine there would be advantages and disadvantages of using a corporation instead, allowing multiple individuals to execute orders on the market. Can you see any definitive reason(s) to use one over the other? 2) Risk assessment: you mentioned that your current idea of a credit score is rather fluid and based on the CDS contracts themselves. Would it be beneficial to include a score based on the individual(s) requesting said CDS contracts? All-in-all, an interesting idea.
1) A single character would receive deposits - and yes, simplicity is the idea. There are no orders to execute because ISK would be recognized in the web application which would handle all orders, transactions, and so forth. Literally no activity would happen in game except for the receipt and distribution of ISK with players. As in the past - the manual effort is the withdraw of moneys. I'm hesitant to outline SLAs for withdraws but in the past I've used 48 hour windows.
2) Hmmm...I'll have to think about that. Perhaps providing information on Bonds in the past relative to the credit spread trend over the life of the bonds? Maybe min/max credit spreads they've experienced on their debt in the recent past? Honestly not sure and it's not something I had planed on. |
MailDeadDrop
Rage and Terror Against ALL Authorities
313
|
Posted - 2014.05.08 21:52:00 -
[9] - Quote
Hexxx wrote:Xinryu wrote:2) Risk assessment: you mentioned that your current idea of a credit score is rather fluid and based on the CDS contracts themselves. Would it be beneficial to include a score based on the individual(s) requesting said CDS contracts? 2) Hmmm...I'll have to think about that. Perhaps providing information on Bonds in the past relative to the credit spread trend over the life of the bonds? Maybe min/max credit spreads they've experienced on their debt in the recent past? Honestly not sure and it's not something I had planed on. I think that puts you back into the "past performance is no guarantee of future performance" trap. I understand the attractiveness of some "safety" indication. But Eve being Eve, we've got to be very careful with any such rating.
A perhaps better metric would be a measure of how "at risk" the debtor's assets are (e.g. held by known independents for other purposes). For example (this is an off-the-cuff example): If a debtor has BPOs locked down by Chribba/flakeys/RAW32 (I'm not meaning to slight anyone by omission) then they might be more inclined to keep their trustworthy reputation.
MDD |
Hexxx
Sebiestor Tribe Minmatar Republic
51
|
Posted - 2014.05.08 22:43:00 -
[10] - Quote
MailDeadDrop wrote:Hexxx wrote:Xinryu wrote:2) Risk assessment: you mentioned that your current idea of a credit score is rather fluid and based on the CDS contracts themselves. Would it be beneficial to include a score based on the individual(s) requesting said CDS contracts? 2) Hmmm...I'll have to think about that. Perhaps providing information on Bonds in the past relative to the credit spread trend over the life of the bonds? Maybe min/max credit spreads they've experienced on their debt in the recent past? Honestly not sure and it's not something I had planed on. I think that puts you back into the "past performance is no guarantee of future performance" trap. I understand the attractiveness of some "safety" indication. But Eve being Eve, we've got to be very careful with any such rating. A perhaps better metric would be a measure of how "at risk" the debtor's assets are (e.g. held by known independents for other purposes). For example (this is an off-the-cuff example): If a debtor has BPOs locked down by Chribba/flakeys/RAW32 (I'm not meaning to slight anyone by omission) then they might be more inclined to keep their trustworthy reputation. MDD
I would assert that the mechanism I'm describing essential "crowd sources" an ever changing view of risk with regards to the debt instrument. Those doing so may consider historical events, but they'd also be incentivized to stay educated on the risk of the corp or alliance. This is demonstrated by the credit spread. |
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MailDeadDrop
Rage and Terror Against ALL Authorities
313
|
Posted - 2014.05.08 23:16:00 -
[11] - Quote
Hexxx wrote:I would assert that the mechanism I'm describing essential "crowd sources" an ever changing view of risk with regards to the debt instrument. Those doing so may consider historical events, but they'd also be incentivized to stay educated on the risk of the corp or alliance. This is demonstrated by the credit spread. Yes, I see that. What Xinryu seemed to be asking for was some indication of the creditworthiness of the issuer other than past and current "CDS rating" (as represented by the spread). Such a metric would be useful to seed the crowd sourced CDS rating for those common situations where the issuer has no prior CDS rating.
Are you contemplating providing any assistance for the crowd to evaluate the issuer prior to the crowd pricing the issue?
MDD |
RAW23
777
|
Posted - 2014.05.08 23:25:00 -
[12] - Quote
Hexxx wrote:
Objectives GÇóTo create a better capital market for large Corporation/Alliance debt financing. GÇóTo create a market that self-regulates the GÇ£creditGÇ¥ of debt sellers. GÇóTo create an active speculative market based on debt derivatives that provides visibility into market sentiment on the GÇ£creditGÇ¥ of debtors.
Interesting idea but do you really think there is a market for debt derivatives considering how small the market for actual debt is? Public raising of debt by large alliances and corporations is pretty much non-existent in any case and the individual public debt market is pretty small these days as well (especially now that Grendell is shutting up shop and thus removing something in the region of 90% of the uncollateralised public debt currently in play). Numbers of investors are pretty small as well, so wouldn't this undermine a 'wisdom of crowds' approach if you have not so much a crowd but a handful of individuals providing the market sentiment? There are two types of EVE player:
those who believe there are two types of EVE player and those who do not. |
Xinryu
DH Industries
0
|
Posted - 2014.05.09 02:04:00 -
[13] - Quote
MailDeadDrop wrote:Hexxx wrote:I would assert that the mechanism I'm describing essential "crowd sources" an ever changing view of risk with regards to the debt instrument. Those doing so may consider historical events, but they'd also be incentivized to stay educated on the risk of the corp or alliance. This is demonstrated by the credit spread. Yes, I see that. What Xinryu seemed to be asking for was some indication of the creditworthiness of the issuer other than past and current "CDS rating" (as represented by the spread). Such a metric would be useful to seed the crowd sourced CDS rating for those common situations where the issuer has no prior CDS rating. Are you contemplating providing any assistance for the crowd to evaluate the issuer prior to the crowd pricing the issue? MDD
Yeah, this is what I was referring to. While the securities themselves would do well with a risk profile of some kind, it would also be rather beneficial to have a risk profile of the individual who is issuing the CDS contracts. It could be based off of a variety of metrics, including, but not limited to, character age, and the risk profiles of past CDS contracts.
On the note of the automation via a web application (and as someone who's building one), WTB a CREST endpoint for transferring ISK. |
Hexxx
Sebiestor Tribe Minmatar Republic
54
|
Posted - 2014.05.09 03:36:00 -
[14] - Quote
RAW23 wrote:Hexxx wrote:
Objectives GÇóTo create a better capital market for large Corporation/Alliance debt financing. GÇóTo create a market that self-regulates the GÇ£creditGÇ¥ of debt sellers. GÇóTo create an active speculative market based on debt derivatives that provides visibility into market sentiment on the GÇ£creditGÇ¥ of debtors.
Interesting idea but do you really think there is a market for debt derivatives considering how small the market for actual debt is? Public raising of debt by large alliances and corporations is pretty much non-existent in any case and the individual public debt market is pretty small these days as well (especially now that Grendell is shutting up shop and thus removing something in the region of 90% of the uncollateralised public debt currently in play). Numbers of investors are pretty small as well, so wouldn't this undermine a 'wisdom of crowds' approach if you have not so much a crowd but a handful of individuals providing the market sentiment?
I'm proposing synthetic CDS contracts, also called "naked" contracts that are not tied or restricted by the underlying instrument. In other words - people could create CDS contracts that far outstrip the principal of the bond. =) This leads to some rather "fun" financial PVP potentially the potential for an active trading on speculation.
My hope is that this kind of thing brings attention to and possibly creates interest in bonds which, let's be honest, have been the dominant form of investment for a few years.
All that said - you've got a perfectly valid point. One of the biggest risks is that adoption remains persistently low.
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Hexxx
Sebiestor Tribe Minmatar Republic
54
|
Posted - 2014.05.09 03:40:00 -
[15] - Quote
Xinryu wrote:MailDeadDrop wrote:Hexxx wrote:I would assert that the mechanism I'm describing essential "crowd sources" an ever changing view of risk with regards to the debt instrument. Those doing so may consider historical events, but they'd also be incentivized to stay educated on the risk of the corp or alliance. This is demonstrated by the credit spread. Yes, I see that. What Xinryu seemed to be asking for was some indication of the creditworthiness of the issuer other than past and current "CDS rating" (as represented by the spread). Such a metric would be useful to seed the crowd sourced CDS rating for those common situations where the issuer has no prior CDS rating. Are you contemplating providing any assistance for the crowd to evaluate the issuer prior to the crowd pricing the issue? MDD Yeah, this is what I was referring to. While the securities themselves would do well with a risk profile of some kind, it would also be rather beneficial to have a risk profile of the individual who is issuing the CDS contracts. It could be based off of a variety of metrics, including, but not limited to, character age, and the risk profiles of past CDS contracts. On the note of the automation via a web application (and as someone who's building one), WTB a CREST endpoint for transferring ISK.
Honestly I'm not planning to do anything in addition to what I've laid out for identifying risk - I'd rather leave speculation to investors and traders and not the Exchange itself.
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Magnu Stormhawk
Stormhawk Enterprises
46
|
Posted - 2014.05.09 14:05:00 -
[16] - Quote
RAW23 wrote: the individual public debt market is pretty small these days as well (especially now that Grendell is shutting up shop and thus removing something in the region of 90% of the uncollateralised public debt currently in play).
On the flipside, could we see in an increase in activity due to (a) those borrowers who would have gone through Grendell having to come directly to the marketplace, and (b) investors needing to look at what else is available other than Grendell? The same supply and demand in theory, but spread out and more diverse. |
Hexxx
Sebiestor Tribe Minmatar Republic
57
|
Posted - 2014.05.09 14:43:00 -
[17] - Quote
Magnu Stormhawk wrote:RAW23 wrote: the individual public debt market is pretty small these days as well (especially now that Grendell is shutting up shop and thus removing something in the region of 90% of the uncollateralised public debt currently in play). On the flipside, could we see in an increase in activity due to (a) those borrowers who would have gone through Grendell having to come directly to the marketplace, and (b) investors needing to look at what else is available other than Grendell? The same supply and demand in theory, but spread out and more diverse.
I didn't mention it before, but even if I do this it will take months before the software is even ready for testing. The minimal use cases I've identified already are fairly complex to code for. Not terribly concerned about usability for the customer however.
Historically there has always been a large market for investment with a relatively low supply of actual investments. I'm estimating about 20 to 30 borrowing organizations and bond buyers and CDS speculators numbering between 500 and 1,000. I don't think I'll hit those numbers until after a few months of operation however. |
Grendell
Technologies Unlimited Superior Eve Engineering
870
|
Posted - 2014.05.09 16:08:00 -
[18] - Quote
Just dropping in to say welcome back Hexxx.
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Mme Pinkerton
102
|
Posted - 2014.05.09 18:35:00 -
[19] - Quote
To my knowledge the only one who has ever run an insurance business on MD was cosmoray, and he insured the offerings made by his own scam alts. Insurance of offerings is one of the holy grails of MD (to borrow some of Hexxx's terminology) and yet it has never been attempted. Why? because the brightest minds of MD have concluded it to be unfeasible.
Enter the *cough* wisdom *cough* of crowds!
The MD elite deems bond insurance to be unfeasible? John Doe doesn't care. The MD elite thinks that past performance is no indicator of future profits? John Doe doesn't know. The MD elite talks about 'adverse selection' and 'moral hazard'? John Doe is an hasardeur extraordinaire and proud of it! In fact John Doe has no idea he is selling insurance. He is trading in 'CDS' which are just like stocks.
And thanks to all the John Does in EVE, the MD elite is now able to purchase affordable insurance for their investment vehicles. What the brightest minds could not have accomplished the wisdom of crowds has achieved! An IPO guide (David H'Levi) | Towards a Positive Argument For Investing (RAW23) | Freighter Operations 101 (Kazuo Ishiguro) | Dominion market analysis (Akita T)
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Proton Power
Evolution Northern Coalition.
17
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Posted - 2014.05.09 18:40:00 -
[20] - Quote
Don't understnad any of it so can't really respond, but like a few others wanted to Welcome you back, been a very long time. |
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SencneS
Incertae Sedis Trapped.
34
|
Posted - 2014.05.15 19:41:00 -
[21] - Quote
A real working exchange that does what you describe would need significant amount of time and effort to create, are you sure you want to saddle up to that time commitment again?
Occam's razor needs to play a major part in anything like this, the average user doesn't know or care what they are doing, only that there "maybe" an investment and there "maybe" a profit in it. The main problem I see here is, the most simple solution is already in place and in game.
The biggest issue with creating something that already exists in your wallet is you have to make people want to be able to start using your insecure, risk based alternative. The only way I can see this happening is if you already have established a commitment from entities to use your Exchange prior to release. Entities that want it in the first place, and entities that customers want to interact with.
It's a worthy cause, but to make it easy, simple to understand both front in and mechanically back end for the MD Elites is a tall order.
But welcome back anyway :)
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Vaerah Vahrokha
Vahrokh Consulting
5415
|
Posted - 2014.05.15 20:42:00 -
[22] - Quote
Hello, Hexxx and all those long time no see guys!
I have some questions:
1) What's the ROI on this? Given it's a super-niche thing you are going to spend tons of time for ... what returns?
2) Do people even understand any of this? Maybe write a plan that's understandable by simple human beings who know nothing about CDS?
3) What happens in case of an insured event? What's the pricing scheme? What about the supposed back up loss reserve? Auditing | Collateral holding and insurance | Consulting | PLEX for Good Charity
Twitter channel |
Hexxx
Sebiestor Tribe Minmatar Republic
67
|
Posted - 2014.05.16 13:01:00 -
[23] - Quote
SencneS wrote:A real working exchange that does what you describe would need significant amount of time and effort to create, are you sure you want to saddle up to that time commitment again?
Occam's razor needs to play a major part in anything like this, the average user doesn't know or care what they are doing, only that there "maybe" an investment and there "maybe" a profit in it. The main problem I see here is, the most simple solution is already in place and in game.
The biggest issue with creating something that already exists in your wallet is you have to make people want to be able to start using your insecure, risk based alternative. The only way I can see this happening is if you already have established a commitment from entities to use your Exchange prior to release. Entities that want it in the first place, and entities that customers want to interact with.
It's a worthy cause, but to make it easy, simple to understand both front in and mechanically back end for the MD Elites is a tall order.
But welcome back anyway :)
Good to see you again old friend.
I agree with your assessment; stakeholder buy-in is critical. If people aren't interested in this it will fail just as hard as the insurance project. This is a significant risk - and the largest one that this project faces. To mitigate the risk I'll be working to communicate and find ways to champion the value of the project. I've considered making it truly open to anyone at all but I'm worried that the flood of debt offerings will be difficult for speculators and investors to properly assess. It's a possible option though if the initial target users don't generate sufficient debt offerings for investors and speculators.
Also, your first point - yes it's a potentially big time commitment. I'm looking for ways to reduce that, manage it, or justify it. I'll speak on this at another time if and when it gets closer to a reality. |
Hexxx
Sebiestor Tribe Minmatar Republic
67
|
Posted - 2014.05.16 15:18:00 -
[24] - Quote
Vaerah Vahrokha wrote:Hello, Hexxx and all those long time no see guys!
I have some questions:
1) What's the ROI on this? Given it's a super-niche thing you are going to spend tons of time for ... what returns?
2) Do people even understand any of this? Maybe write a plan that's understandable by simple human beings who know nothing about CDS?
3) What happens in case of an insured event? What's the pricing scheme? What about the supposed back up loss reserve?
Good to hear from you VV
1) What's the ROI? For me personally it's the satisfaction of designing, building, and operating functional financial systems. For users, that depends on how they invest/speculate.
2) Do people understand any of this? Probably not - but the fault lies largely with me. I'm working on producing a series of examples that illustrate how this could be used. I'm also opting for a simple contract comprised of price and payout, throwing premiums out the window in favor of simplicity.
3) A credit event (default) is defined by the system and when it does, contract payouts are triggered automatically in mass - allocating all those payouts via the moneys in escrow. The pricing scheme will be contracts with payouts of 1 million ISK - the price per contract is determined by the contract buyer/seller. Moneys for buy orders and contract payouts will be placed in escrow at the time of the order and/or contract creation.
Good questions! |
Lianara Dayton
Society for Peace and Unity
5
|
Posted - 2014.05.16 15:38:00 -
[25] - Quote
I really like your ideas and really hope you can set something like this up!
This kind of bond/derivate market would give the game a totally new layer to play with! Can't wait! Lianara Dayton, Society for Peace and Unity |
Vaerah Vahrokha
Vahrokh Consulting
5416
|
Posted - 2014.05.17 11:38:00 -
[26] - Quote
Lianara Dayton wrote:I really like your ideas and really hope you can set something like this up!
This kind of bond/derivate market would give the game a totally new layer to play with! Can't wait!
There's one issue, that for people like me is really "game breaking".
EvE markets, even Trit and isotopes, are just barely liquid enough to effectively implement true investment and / or hedging strategies.
A niche market does not allow price to express itself well enough, it's more of a coin toss than an investment.
Illiquid EvE markets at least have a year+ history (some times much more) so price may still be read through its reaction to supply and demand levels. This new market would lack even that.
Imo the only way to ever have a similar initiative take off has two elements:
1) Is presented in a very, VERY simple way so it may be embraced by a lot of market participants.
2) It's pegged to other EvE markets, so an investor may study those to infer which strategies to apply on the new specific market.
When I have applied those principles (my big 100B funds), I have created the only marketplace that had both factors. It was easy to understand (many know what mutual funds are) and pegged to EvE markets (so everyone could study isotopes, minerals etc. to "get tips" about what to do and place market orders on my exchange).
Hexxx has "just" to do something similar. Auditing | Collateral holding and insurance | Consulting | PLEX for Good Charity
Twitter channel |
Hexxx
Sebiestor Tribe Minmatar Republic
68
|
Posted - 2014.05.18 16:49:00 -
[27] - Quote
Vaerah Vahrokha wrote:Lianara Dayton wrote:I really like your ideas and really hope you can set something like this up!
This kind of bond/derivate market would give the game a totally new layer to play with! Can't wait! There's one issue, that for people like me is really "game breaking". EvE markets, even Trit and isotopes, are just barely liquid enough to effectively implement true investment and / or hedging strategies. A niche market does not allow price to express itself well enough, it's more of a coin toss than an investment. Illiquid EvE markets at least have a year+ history (some times much more) so price may still be read through its reaction to supply and demand levels. This new market would lack even that. Imo the only way to ever have a similar initiative take off has two elements: 1) Is presented in a very, VERY simple way so it may be embraced by a lot of market participants. 2) It's pegged to other EvE markets, so an investor may study those to infer which strategies to apply on the new specific market. When I have applied those principles (my big 100B funds), I have created the only marketplace that had both factors. It was easy to understand (many know what mutual funds are) and pegged to EvE markets (so everyone could study isotopes, minerals etc. to "get tips" about what to do and place market orders on my exchange). Hexxx has "just" to do something similar.
Two main points:
1) Agreed. Simplicity is necessary for participation. Lots of participation means a liquid market. Liquid markets are functional markets.
2) I disagree - but only because the nature of what I'm doing doesn't have an facility for long views on historic performance. I understand what you mean and I do agree with you in general - it's a great advantage to the in game markets on commodities - but for this application there is no method by which I can provide the same kind of historical view.
Also, overall commentary on hedging strategies for in-game commodity markets - the best hedging strategy (my theory) is to diversify by hold a "basket" of commodities proportional to historical price volatility and weighted appropriate to the risk appetite of the investors. This is a technique however, and not a hedging instrument which is a complicated thing and doesn't exist in-game. |
flakeys
The Mjolnir Bloc The Bloc
2160
|
Posted - 2014.05.18 17:33:00 -
[28] - Quote
Bad Bobby wrote:Just dropping in to say "Hi!" as it's nice to see you're still around.
I can't really offer you much in the way of feedback on your scheme, since I don't really understand any of it. Maybe that indicates that you need a more idiot friendly description of what you are doing?
I wish you the best of luck!
One of the reasons i got used to ignoring a lot of hexxx posts because most of the times i'm just too moronic to understand it anyway
Welcome back hexxx .
We are all born ignorant, but one must work hard to remain stupid.
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Vaerah Vahrokha
Vahrokh Consulting
5418
|
Posted - 2014.05.19 15:55:00 -
[29] - Quote
flakeys wrote:Bad Bobby wrote:Just dropping in to say "Hi!" as it's nice to see you're still around.
I can't really offer you much in the way of feedback on your scheme, since I don't really understand any of it. Maybe that indicates that you need a more idiot friendly description of what you are doing?
I wish you the best of luck! One of the reasons i got used to ignoring a lot of hexxx posts because most of the times i'm just too moronic to understand it anyway Welcome back hexxx .
Bankers use intricate terms with one hand to hide their other hand digging in your pockets.
Hexxx has always been a good banker... Auditing | Collateral holding and insurance | Consulting | PLEX for Good Charity
Twitter channel |
Koniforous
Tauren Transit
127
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Posted - 2014.07.03 17:04:00 -
[30] - Quote
I imagine with the new SSO system this can be more easily accomplished now? TAUTX Bank: 12.5% of profits paid to investors monthly. More info: https://forums.eveonline.com/default.aspx?g=posts&t=322582&find=unread |
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