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Gaius Cotta
Center for Advanced Studies
Gallente Federation
0
   |
Posted - 2014.07.04 13:21:00 -
[31] - Quote
You actually only need to implement the same system as seen by LendingClub. It's a P2P lender, where anyone can sign up to receive credit, or invest in other people who have signed up and get regular monthly payments (as long as they don't default). The way they work it is to separate the load among thousands of investors so that not one person takes the entire hit of a non-payment.
So....
How I see it (as it pertains to Eve), you already have a contract system. A person can create a 'debt contract' where they state "I need to borrow X money for Y months for Z.' They then click a "Get Quote" button where the game detects how much debt you already have, as well as any nonpayment history and gives you a score. In order to keep people from spamming it, it can cost ISK to actually get a quote. You can then activate the contract to list it on the debt contract market.
Anyone willing to risk a little ISK can view the list of debt contracts and decide to invest in anyone they want for as much as they want at whatever % they want. When you've chosen to invest, your money is immediately taken away and assigned to that contract, no canceling. The % that investors choose for a contract are sorted from lowest to highest, and any amount that goes over the requested will be returned to the owner. Contracts expire automatically after 1 month if it never gets filled, and it expires 1 week after it gets filled (all money is returned to their owners). The writer of the contract can choose at any point to "excise" the contract and agree to the current % rate (which is an average among all chosen % across the entire profile) up until expiration (even unfilled contracts).
Agreed on % rates are linked to contract scores to give an averaging chart for everyone, so that we can all see what acceptable amounts would be. All debts can be listed in a tab in the wallet menu, where you can see how much you owe, what your % rate is, and a button to 'Pay'. When a payment is made, all those linked to the contract get a piece based on the amount they invested. |
Lan Wang
Coreli Corporation
Ineluctable.
26
|
Posted - 2014.07.07 11:57:00 -
[32] - Quote
Im currently building something similar ;) |
TheSmokingHertog
TALIBAN EXPRESS
240
|
Posted - 2014.07.07 14:46:00 -
[33] - 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?
Nice insight. With a but...
I don't believe that Grendell's pot was bigger as the sum of all non-coll loans in EVE. Just to put an example out; I manage a portfolio of others in the billions, no collateral required. I assume this kind of loans between corpmates, friends, etc out there will far outweigh the sum of Grendell's pot. Would it surprise you if Pareto would show up again?
The moment that this kind of portfolio's could be managed in a professional (EVE) website environment, and the webmaster / platform owner would offer a credit rating system within that environment. A smaller market could be beneficial on the bigger ones. I could imagine a credit based lone listing.
The CDS principle is new for me. But as I read it you provide ISK to the pool, and the pool will be have a shared risk, and if the pool is not trusted, the worth of a CDS will fall. Maybe go for another pooling mechanic;
Small suggestion
Credit rating
1 > loans upto 100 mil / 1 month / x rent
..
..
5 > loans upto 1 bil / 3 months / 5x rent
..
..
9 > loans upto 10 bil / 6 months / 9x rent
10 > open market, market and loaner can come to terms for a lone.
Loan Certificates
A > credit only for lvl 1 rating
B > credit inputted upto lvl 2 rating
..
..
E > credit inputted upto lvl 5 rating
..
..
J > credit available for complete pool
Result
This way people could buy on a risk they can oversee, or they can go all in. People finishing low rated loans, should get access to the higher rated loans. But because people can hedge risks over the different type of certificates, defaults on the higher loan sums can be avoided by just by building a portfolio with a healthy low risk certificates number in your order wallet.
Of course, if someone would want out on a bet, someone could sell the certificates on the market. If its a good pool, it will be replaced automatically. If the certificate pool is small (say an 9lvl bond), the risk that someone will step in is smaller, and it could be you have to wait out the term of the bond. But if you would have a good credit rating, you could loan the money you step out with on another credit lvl. The pool with people with a smaller risk could then thus finance your investment. This lever would provide a system where people could go with a lower or higher risk within the system. The credit rating will auto balance people not honoring their debt. People who do honor their debt will rise on the debt access ladder, but will encounter people that know they took a higher risk, so will be faced with a smaller pool of ISK.
This setup would give smaller individuals an IN on the market. The sentiment in top segments will still be managed by the small investment engineers now active in MD. But people with smaller risk insight could just step in on the lower lvl certificates and would not have to go on the investigation tour in MD to find out if they should bet on a BOND or not. The easyer way out of bigger people by going to small loans to finance the big ones, will not freeze up their money, so the market will open more opportunities, what I think will be good for the total debt / credit market. |
Elizabeth Norn
Nornir Research
370
|
Posted - 2014.07.07 15:57:00 -
[34] - Quote
To be fair to you, TheSmokingHertog, he did only say public three times  .
.
|
TheSmokingHertog
TALIBAN EXPRESS
240
|
Posted - 2014.07.07 16:02:00 -
[35] - Quote
Elizabeth Norn wrote:To be fair to you, TheSmokingHertog, he did only say public three times .
Sure thing, good point, I was approaching it more from the WHY side of things. People dont have an interest in public offerings, just because there is no place in it for MD or mechanics to support it. |
Hexxx
Sebiestor Tribe
Minmatar Republic
87
|
Posted - 2014.07.07 17:21:00 -
[36] - Quote
Gaius Cotta wrote:You actually only need to implement the same system as seen by LendingClub. It's a P2P lender, where anyone can sign up to receive credit, or invest in other people who have signed up and get regular monthly payments (as long as they don't default). The way they work it is to separate the load among thousands of investors so that not one person takes the entire hit of a non-payment.
So....
How I see it (as it pertains to Eve), you already have a contract system. A person can create a 'debt contract' where they state "I need to borrow X money for Y months for Z.' They then click a "Get Quote" button where the game detects how much debt you already have, as well as any nonpayment history and gives you a score. In order to keep people from spamming it, it can cost ISK to actually get a quote. You can then activate the contract to list it on the debt contract market.
Anyone willing to risk a little ISK can view the list of debt contracts and decide to invest in anyone they want for as much as they want at whatever % they want. When you've chosen to invest, your money is immediately taken away and assigned to that contract, no canceling. The % that investors choose for a contract are sorted from lowest to highest, and any amount that goes over the requested will be returned to the owner. Contracts expire automatically after 1 month if it never gets filled, and it expires 1 week after it gets filled (all money is returned to their owners). The writer of the contract can choose at any point to "excise" the contract and agree to the current % rate (which is an average among all chosen % across the entire profile) up until expiration (even unfilled contracts).
Agreed on % rates are linked to contract scores to give an averaging chart for everyone, so that we can all see what acceptable amounts would be. All debts can be listed in a tab in the wallet menu, where you can see how much you owe, what your % rate is, and a button to 'Pay'. When a payment is made, all those linked to the contract get a piece based on the amount they invested.
A fine capability that is ultimately limited by it's transparency. The reason why commodities markets are so efficient in-game is that they have price spread and trending information. Financial instruments are no different, a lack of transparency or difficulty in achieving that transparency makes for an inefficient and ultimately non-liquid market. I view those kinds of markets as dysfunctional though that doesn't stop them from working and filling a need as LendingClub clearly does.
In summary; it's good, but not as good as it could be.
|
Hexxx
Sebiestor Tribe
Minmatar Republic
87
|
Posted - 2014.07.07 17:22:00 -
[37] - Quote
TheSmokingHertog wrote:
Lots of things about stuff.
...and people say I'm too complicated.  |
Hexxx
Sebiestor Tribe
Minmatar Republic
87
|
Posted - 2014.07.07 17:26:00 -
[38] - Quote
Koniforous wrote:I imagine with the new SSO system this can be more easily accomplished now?
It would simplify things a little, not sure if it'll make my life easier just yet - I'm not going to worry about integration until I can sort out the internal mechanics.
Right now I'm trying to wrestle with the Entity Framework after finally admitting that Linq-to-SQL is no longer my primary method of organizing and accessing my DB. Also, VS2013 - I will do things to the guy that designed it if I ever meet him.
Unpleasant things. |
Hexxx
Sebiestor Tribe
Minmatar Republic
87
|
Posted - 2014.07.07 17:29:00 -
[39] - Quote
Lan Wang wrote:Im currently building something similar ;)
I hope you beat me to implementation then. Happy to give advice or share what I'm doing if you're interested.
That goes for everyone by the way - I'm going to be working extra hard to avoid falling into my "imperialist" philosophy when it comes to development and operation of the Exchange.
However, I retain full rights to being an imperialist the rest of the time.  |
TheSmokingHertog
TALIBAN EXPRESS
240
|
Posted - 2014.07.07 18:13:00 -
[40] - Quote
Hexxx wrote:TheSmokingHertog wrote:
Lots of things about stuff.
...and people say I'm too complicated.
Expecting it long before soon(TM)... but you dont like this then? |
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Lan Wang
Coreli Corporation
Ineluctable.
27
|
Posted - 2014.07.07 18:45:00 -
[41] - Quote
Hexxx wrote:Lan Wang wrote:Im currently building something similar ;) I hope you beat me to implementation then. Happy to give advice or share what I'm doing if you're interested. That goes for everyone by the way - I'm going to be working extra hard to avoid falling into my "imperialist" philosophy when it comes to development and operation of the Exchange. However, I retain full rights to being an imperialist the rest of the time.
Not yet and not as complex as you are talking about this is just a slow project which i dont really know the direction i am going with it lol and lack of experience in finance in eve so just winging it really :) |
Hexxx
Sebiestor Tribe
Minmatar Republic
88
|
Posted - 2014.07.07 19:46:00 -
[42] - Quote
TheSmokingHertog wrote:Hexxx wrote:TheSmokingHertog wrote:
Lots of things about stuff.
...and people say I'm too complicated. Expecting it long before soon(TM)... but you dont like this then?
My personal take is that you've over-engineered the solution. I'm not a fan of adding complexity for the sake of it - the idea of "tiers" lacks real utility.
That said; it's good to discuss and I can give it a better and more complete response when I have more time this week.
|
Hexxx
Sebiestor Tribe
Minmatar Republic
88
|
Posted - 2014.07.07 19:47:00 -
[43] - Quote
Lan Wang wrote:Hexxx wrote:Lan Wang wrote:Im currently building something similar ;) I hope you beat me to implementation then. Happy to give advice or share what I'm doing if you're interested. That goes for everyone by the way - I'm going to be working extra hard to avoid falling into my "imperialist" philosophy when it comes to development and operation of the Exchange. However, I retain full rights to being an imperialist the rest of the time. Not yet and not as complex as you are talking about this is just a slow project which i dont really know the direction i am going with it lol and lack of experience in finance in eve so just winging it really :)
Best of luck on it - feel free to steal my ideas if you'd like.
|
Gaius Cotta
Center for Advanced Studies
Gallente Federation
0
|
Posted - 2014.07.14 07:42:00 -
[44] - Quote
Hexxx wrote:A fine capability that is ultimately limited by it's transparency. The reason why commodities markets are so efficient in-game is that they have price spread and trending information. Financial instruments are no different, a lack of transparency or difficulty in achieving that transparency makes for an inefficient and ultimately non-liquid market. I view those kinds of markets as dysfunctional though that doesn't stop them from working and filling a need as LendingClub clearly does.
In summary; it's good, but not as good as it could be.
You clearly misinterpreted my meaning, I stated LC as a likeness only, in my explanation I showed how full transparency would work. As money is placed onto a contract, the average yield can be seen, while at the same time, the rating is also linked to yield acceptance into a chart.
Here's an example, say I wanted a loan for 500 million isk...I create a contract for 500 million isk and click "get quote." The server would see that I have no loans outstanding, but as a new player, my risk would be high....so they rate me as a C, charge me XY isk for the quote, and my contract is put on the market with a 1 month expiration. Thousands of people individually decide they want to offer some ISK as investing prospect and come across my contract, they look at the rating of C and check the charts to see that 10% is the going average at that rating....they all decide to put in 100k isk where some choose 9% (to try and undercut the competition in order to land the contract), while others choose 11% (in order to raise the average and hopefully not get pushed off the contract). During this allotment, people can see the current average on the contract, creating pressures in both directions as it goes. When the 500 million is reached, the expiration is immediately changed to 1 week...at which point people can still keep bidding, and I can at any point accept the contract at the rate listed and bidding stops.
The moment I accept, I receive the money along with the % loan in my wallet. Everyone who lost out on the bidding (by being too high in %) will be refunded. The % that I chose will alter the C rating chart to average my acceptance into it (so if I chose 9%, which is below the 10% currently, it may make it 9.99% average as an example).
The idea is that people will risk what they believe is true % value based on the rating given, so the chart will reflect that, and players will (in normal circumstance) respect those % give or take. If every person in the game pays back their loans properly, no matter what rating they have, then there would be intrinsically no risk....therefore people would just undercut each other to hold contracts, and the % would fall to the floor (which reflects the "no risk" sentiment). However, if say C rating people have a 10% chance of defaulting, then you can expect the % chart to average anywhere from 10% to 15% because the player-base would pressure towards that equilibrium of risk-versus-rewards.
Plus....the "notes" created (on the bid-side of the contract) could be an item itself, which can be listed on a debt market as a normal note market goes. |
Dethmourne Silvermane
Ascendent.
Test Alliance Please Ignore
52
|
Posted - 2014.07.15 18:29:00 -
[45] - Quote
Do you intend to limit this to corporate/alliance level bonds? I've been reviewing your concept and the use cases and I'm very interested in
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