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Why the PLEX Vault has huge repercussions for the EVE economy.

Author
hog butter
Romex Inc.
Dustm3n
#1 - 2017-07-20 18:27:17 UTC  |  Edited by: hog butter
I posted this in the EVE "The Agency" discussion because of the meager PLEX awards but I think it's a stand alone topic.

I noticed commodities markets are getting beat up. I believe their is a flight to safety in the new PLEX denomination and vault changes. This has caused a defacto reserve currency outside of ISK (PLEX) and thus tethering your game currency to your reserve currency (PLEX).

This creates two problems CCP selling PLEX for dollars so this reserve currency cannot crash otherwise this will cause CCP loose profits. You cannot exercise control over the market like a central bank because your profits are tied to the dilution of the PLEX. Players are hording them being the safest asset to hold because of Plex Vault changes. This causes the price to climb without much of an end in sight except the occasional crash i'm sure. The other problem is when PLEX climbs now anyone that buys plex has much more leverage over the commodities economy. You would normally re-balance this would by "printing" currency however every PLEX you give is viewed by CCP as a Plex not sold ouch.

CCP you created a reserve currency that you don't want to manipulate without hurting your short-term potential profits. This will cost players potentially and CCP by extension. The problem becomes exacerbated when you don't want to dilute the market because your cannibalizing your profits (IE giving out 1 PLEX as loot) and this means your have no measure to stop the inflation of PLEX and deflation of commodities that is sure to come.

So in short ISK is not money anymore PLEX is and if your wallet is filled with ISK, materials, or any under preforming assets you will be losing money by holding them versus PLEX.

This just in a new position created at CCP an economist to help them not ruin their game.
Scialt
Native Freshfood
Minmatar Republic
#2 - 2017-07-20 19:04:44 UTC
Cade Windstalker
#3 - 2017-07-20 19:42:10 UTC
I hate to tell you this but your logic is faulty, and your conclusion about ten years late.

PLEX has always been a popular place to store value, especially for players leaving the game for a long period of time. The current PLEX prices likely have little to nothing to do with this, as does the PLEX vault, since the best place to convert PLEX to ISK has pretty much always been Jita just due to volume traded.

Since PLEX people buy for this purpose stays in Jita and just sits the PLEX Vault doesn't change anything in this dynamic.

Also CCP has, literally for the last ten years, managed the PLEX market. Whenever the price spikes, like it has recently, CCP inject more into the economy. Usually through sales on PLEX bundles. The goal here being to simply manage the price, not cap it or push it too far down.

The current PLEX price problem is likely largely due to the large amount of ISK entering the economy pushing the demand for PLEX up, not due to the PLEX vault changing player behavior in any significant way.
Sonya Corvinus
Grant Village
#4 - 2017-07-21 00:47:25 UTC
ok...

it's a game. relax and play.
Yarosara Ruil
Test Alliance Please Ignore
#5 - 2017-07-21 07:32:53 UTC  |  Edited by: Yarosara Ruil
If PLEX is a currency, the fact it is a physical item is just a grandfathered feature, and to facilitate trading PLEX on the market. But since it is a hard currency now, having taken the place of Aurum, it makes perfect sense there's a safe way for PLEX to have a safe place to be stored and carried around without fear of being stolen.

Of course if all the content you want out of PLEX is morons getting killed with PLEX on their cargos, then I say, tough luck.
Krima Sumyungi
Perkone
Caldari State
#6 - 2017-07-21 19:33:59 UTC  |  Edited by: Krima Sumyungi
hog butter wrote:
Translation: I can't steal PLEX anymore and will have to spend either some of my billions of ISK, or break out the cash, to actually buy them. THE ECONOMY IS WOE!!!


There ya go.
TackyTachy1
Doomheim
#7 - 2017-07-22 01:36:04 UTC
Never have figured out a way to shoot anything with Plex so don't mess with it. Besides, if I wanted to play a money game I'd load my long dormant trading account and go for it. In case your curious, the reason I converted to cash and bailed is that I made the heart breaking discovery that active trading is way more work than I want to do. The Eve money thing looks about the same.

Forum Rep for a bunch of characters, couple corps and one seriously Lost In Space multiboxer.

hog butter
Romex Inc.
Dustm3n
#8 - 2017-07-25 08:38:35 UTC  |  Edited by: hog butter
Cade Windstalker wrote:
I hate to tell you this but your logic is faulty, and your conclusion about ten years late.

PLEX has always been a popular place to store value, especially for players leaving the game for a long period of time. The current PLEX prices likely have little to nothing to do with this, as does the PLEX vault, since the best place to convert PLEX to ISK has pretty much always been Jita just due to volume traded.

Since PLEX people buy for this purpose stays in Jita and just sits the PLEX Vault doesn't change anything in this dynamic.

Jita is the trade hub granted I ready the monthly economic report. Your missing what I am saying which is not the about liquidity of PLEX it's about deflationary pressure commodities markets will see given a now unfettered PLEX via PLEX vault. In a nutshell I am saying Dollars now have greater influence in the economy via PLEX through vault / denomination changes.

Cade Windstalker wrote:

Also CCP has, literally for the last ten years, managed the PLEX market. Whenever the price spikes, like it has recently, CCP inject more into the economy. Usually through sales on PLEX bundles. The goal here being to simply manage the price, not cap it or push it too far down.

The current PLEX price problem is likely largely due to the large amount of ISK entering the economy pushing the demand for PLEX up, not due to the PLEX vault changing player behavior in any significant way.


Yes PLEX has generally rose and PLEX bundles influence the market this is all given. Inflation is what you would expect with ISK entering the economy. I think that isn't the only factor I think their is a flight to safety as far as investment quality. Also they just sold PLEX bundles on sale and converted everyone's Aurum to PLEX and I didn't see the price stop climbing for a second. I am saying why hold ISK now why not contract exchange item in PLEX and make ISK a subordinate currency this has already started to happen. Everyone is focusing on the PVP aspect of PLEX I don't care about that. I have never killed another player period. EVE vault plus the PLEX denomination change has created a defacto reserve currency like it or not.
Ded Akara
Doomheim
#9 - 2017-07-25 09:14:42 UTC  |  Edited by: Ded Akara
OP is correct. It's better to hold your wealth as PLEX than as ISK. Not doing so will only cause you to lose out.

Time for CCP to step in with some changes to stop this. It will seriously harm the player count as more players stop plexing their accounts.

Watch all the PLEX hoarders come here and cry and try to convince you not to change it.

The simple solution would be to make it so PLEX can only be contracted/sold on the market in game one time, by the original person who purchased it from CCP - after that it is bound to the player, though can still be used to pay for game time for other accounts using the current plex gift system.

This would mean that if you purchase a plex from another player for isk on the market, contracts, trades or whatever - you are accepting that you must use the plex, you cannot trade it. This allows players to continue using plex in the way it was meant to be used, whilst stopping players using it as a commodity to be hoarded to increase their wealth as its price goes up.

Do this, and we'd see plex prices correcting to a lower sustainable amount begin as soon as the announcement is made.

Any other solutions?
hog butter
Romex Inc.
Dustm3n
#10 - 2017-07-25 10:28:29 UTC  |  Edited by: hog butter
Ded Akara wrote:

The simple solution would be to make it so PLEX can only be contracted/sold on the market in game one time, by the original person who purchased it from CCP - after that it is bound to the player, though can still be used to pay for game time for other accounts using the current plex gift system.

This would mean that if you purchase a plex from another player for isk on the market, contracts, trades or whatever - you are accepting that you must use the plex, you cannot trade it. This allows players to continue using plex in the way it was meant to be used, whilst stopping players using it as a commodity to be hoarded to increase their wealth as its price goes up.

Do this, and we'd see plex prices correcting to a lower sustainable amount begin as soon as the announcement is made.

Any other solutions?


Anyway you slice it there will be politics and outrage from group x,y,z. I think those ideas are correct ways to address the problem its all about how to not loose players while doing it.

With that said if I were CCP I would allow for PLEX investment events. Allow your players to dump their PLEX into the company Crowd Control Productions via a bond issuance that had a small dividend. This gets around players holding power over CCP via a securities arrangement and allows a player to feel like they own a part of CCP.

If I were CCP the other thing I would do is why isn't their in game catastrophe. Guess what Jita just got slammed by a black hole assets have been damaged inside of station hangers via the cosmic radiation bursts ouch! Another thing is to amp up destruction of wealth via sinks like investment in space stations and hostile takeovers of said High sec stations via market warfare. XYZ stargate just got demolished for 1000 plex you or your corp could be listed in honorable mention in the description of the show info tab of the new rebuilt stargate. Corporate naming rights on that stargate happens to start the bidding at 30,000 Plex because its 3 jumps from Jita.

I have to hit the bag but I love the idea of a war dec bidding system with PLEX to but that might be the lack of sleep talking.