Market Discussions

Dear All,


TL:DR
Do you think EVE needs this?

I had asked my corpmate Toobo to present this idea here, but due to her prolonged absence months have passed and I have to do it myself. Please bear with my bad presentation skill.


Why I'm posting this
By posting this idea here, I hope to test the water...whether it's even needed, whether it would work, etc etc.
At the moment the whole thing is just-an-idea stage. No significant work has been done apart from me doodling.


What is it?
It is sorta mineral future exchange platform. I prefer not to use the term 'future' coz there will be people yelling "That's not how RL future trading works!". RL is RL and EVE is EVE. So instead of the term future I've been using Promise.


How it works?
We (I mean the Exchange...doesn't necessarily have to be me) will offer a platform service where you will be able to make promises. You make a promise to either deliver to or buy from us a fixed amount of material on the preset date at the preset price. For simplicity purpose we will list the available preset promises for you to choose from.
Once you make a promise, depending on the market fluctuation there is a chance that you may become less motivated to fulfill your promise - we lose our confidence in you. To counter that, you will be required to deposit some ISK before you make any promises. Think of it as buying our confidence in you.

You can withdraw the Confidence back to ISK any time. However, if there is a standing promise you've made to us, we will lock up a portion of your Confidence from being withdrawn. Hence no matter whether you fulfill your promise or not we get ISK equivalent of what you've promised. This locked amount will be unlocked again for withdrawal once your promise has been fulfilled.

We will be putting **** tons of collateral into 3rd party (or 3rd parties). This 3rd party will have access to our records of standing promises. If we don't fulfill our part of the promise (payment, material delivery, or not converting your Confidence back to ISK) then you contact the 3rd party. 3rd party will check the records, and know exactly how much of our collateral in his possession to liquidate to compensate you.

There are two ways to make a promise.
Either you make a brand new promise to us by choosing one from a preset promises that is tied to the live market price, or you take over our end of a promise that has already been made by someone else.. perhaps days or weeks ago.
In the latter case, we will act as the pass-through conduit for the ISK and material while you remain anonymous to the other end of the deal. Because our staff need to be paid for record keeping and stuff we will charge a small handling fee for the both types of promises.
Let's say you are a miner. If the live market price shows downward trend, you might be better off taking over our end (delivery obligation) of a to-buy promise that somebody has made some time ago at a higher price than the current market price, instead of making a fresh to-deliver promise based on the current market price.

Whenever somebody makes a promise to buy or sell materials to us, that promise will be re-listed visible to public (for taking over our end of the deal). Re-listing already made promises counteracts the effect of the live market trend on us. For downward trend, the buy-promises made at higher price than live market price would attract suppliers. For upward trend, the sell-promises made at lower prices would attract buyers. Either way, we find someone to take over our part of a promise hence relieving us from the burden of ISK reserve / material stock.


Huh, what?
I'm not good with words. So I've made some mock-up and corresponding screenshots.
These are actually better than me writing a wall of text

Tritanium Page Mockup screenshot

Obligation Matrix screenshot

Benefits provided

Simulating a pair of Tritanium buy and sell 'promises'


Actual transactions
All the fee payments and asset exchanges should take place in-game as to avoid the EULA grey area.. External web, etc, should be limited to providing info & records only.


What good is it?:

• You are in charge of an ore buy back program. You can now fix the budget for the next x days
• You expect mineral price to fall, and want to lock in the current value
• You have a series of production jobs in plan, and want to fix down the buildcost
• You expect mineral prices to rise, and want to lock in the current value
• You want to try speculation
• You have some insider info that a big qty of mineral X is going to hit the market
• We issue a certificate stating the numbers and total value of promises you have honoured within period X (for a small fee)
• Because our payment to you (or our delivery of minerals to you) is 3rd party guaranteed while your part of the promise is guaranteed by the locked Confidence, you might want to use your Promise as a collateral for some other *****
• Since the standing Promises are visible to the Public, this could act as resistance to abrupt changes in mineral prices

What's Next ?
As I said, I wish to test the water at this stage. If it is determined the idea (and its mechanism) is worth going for, the next step would be to gather like minded people to actually work this thing out. But that's an issue to be discussed then.


Thank you for your attention. All comments welcomed.

This is something I have been meaning to sponsor but didnt't really get going since busy RL :p

I see what Do Little is saying and there certainly are differences between RL supply and In Game Supply, as in how they work.

However, eve being a game can also mean different possibilities conpared to how RL stuff works. Supply n demand can get really warped due to arbitrary reasons (patches). Introduction of new ships/buildings can make demand for certain materials to shoot up, while something lir Rorq mining can really increase supply too.

It is early idea stage but I think this (if it were to be implemented) would be somewhere between speculative platform and steady source of minerals for builds. Sure it will be hard to penalise someone who does not keep 'promise' (its never really 'binding' game mechanic wise as Do Little says), but I think there is also room for player driven structure to how such things can work (e.g. At its most basic level we have collaterals for loans n 3rd parties, n before there were 'audits')

I hope to see more ideas here as I do feel that eve could use some more playet driven financial service stuff :p

Yes the platform/service should be used worthwhile enough that it doesnt appeal much to lose it. But since people being able to invent new persona and all in games, this can be a bit tricky to judge.

I think another, more structural safety is to have a bit of insurance like safety feature. If everybody breaks promise at the same time, yes the whole thing could collapse. But the system could have enough security that minor break downs here and there will not bring down the whole thing. For the confidence of users/investors I guess this ratio will be important, as the more portion of the whole pool is covered the more confident you could feel.

I think if we were to do this things will have to be secured in multiple ways/deals. Some collateral to a (or more) third party:ies, some kept as mineral reserve, some isk in the running corp, etc etc.

From the old days of banks and audits and elaborate scams and failures in eve, what we have now is the most basic and simple deals - fully collateralised loans. I wonder if we are ready for/or if there is need to try to advance something more again.