Market Discussions

I am not defending or endorsing this project. But I think it is too early to call it a scam. Honestly, they are committing to far too much work for it to be an intentional scam. There are much easier ways to get isk through the MD forums. I simply think the OP has defined their project in a manner that doesn't make a lot of sense to outsiders.

This is because the project appears to lack the incentive for the work required. In other words; your giving away too much isk to be a traditional business....so it must be something else. Even if the motivation is to offset all the other scammers in the game this is an work intensive way of doing that. I wish them the best....they have selected a hard road. I hope their integrity can hold up. Though the op could make this alot easier on themselves.

On a side note, if you do decline my offer, then your basically admitting to the scam, so no pressure.

As in not at all?

If you used your own money, instead of letting it sit in a wallet, you wouldn't have to worry about withdrawal requests, a run, or paying interest and your trading wouldn't be affected. I cannot see any tangible benefit you get for doing this except reputation building or roleplay experience.

The main issue here is that he is not leveraging his own isk at all. What he has said is that he will accept deposits and for each deposit he accepts he will keep the same amount of his own isk idle as 'insurance' for the money he borrows, so that if he loses the borrowed isk he can repay it. What this mean is that:

1) He has 500mil of his own isk that he can use for trading without paying any interest on

2) He then borrows 500mil from other people and locks up his own 500mil as insurance.

3) He now has exactly the same amount of isk available for trading - 500mil - but he now has to pay interest on it.

There is absolutely no business sense in this model. It does not involve leveraging isk, just swapping interest free isk out of the trading pool into an idle and non-productive role and replacing it with borrowed isk that has a cost. As such, the only two explanations for this course of action (leaving aside rank stupidity) are role-playing and rep grinding. Given how hard the OP is working to keep his public profile up and maintain his visibility it is hardly surprising that it looks suspiciously like the latter to many people. Indeed, even as a role-player there is no need to take such an approach, which really just amounts to paying people for no reason at all.

Really, its a gentlemen's agreement when you are dealing with shareholders to match them in this manner. It puts everyone at ease and demonstrates some capability on the managers part. Really you (the manager) are are maximizing your own buying power while also keeping your liquidity for the cost of your return rate. As long as you profit more than your return rate then you are good to go. If you do not have investors then the whole matching this wouldn't apply.

Also.....
In the event that your inventory...what you have in sell orders suddenly loses value. You can counter at the loss with newer investment inventory. Therefore, you are more willing to and able to take some risks with the shareholder's isk as insurance backing the now full volume of your personal wealth. This is an unattractive truth, but that's how it works. This could be called extreme, but its a good rule of thumb. If you arent doing anything at all with the money but trading then sure you can be 'all in'. I run a corp with mine so I can't do that. I need cash on hand.

...and even with margin trading you still have to actually pay for the item when it fills. Not doing so is the game mechanic basis of margin scaming. I have margin trading but I basicly ignore it and only treat it like an additional buffer.


....finally 10% of moar isk than you currently have = moar isk than you currently have. The more you have on hand the more you can make. THAT is why you want people to invest with you. People who talk about there being somekind of diminishing returns on trading lack imagination.

The Official Bank of Far Wait List

1. Yazzinra (Try her. Seriously.)
2. Jinxy Ormand (Awesome name, btw!)
3. Raano Thorson (We added his name ourselves, because we liked his post earlier in the thread and we'd like to do business with him someday.)
4. Bayaz Sharvas (Anyone who's part of an outfit that brews beer in space ought to make a great customer.)
5. Qaren Otsolen (Brave, bold and soon to be rich. Watch this rising star closely.)

A fine bunch of capsuleers, in my not so humble opinion.

I'm sorry, but you are wrong on nearly every aspect.

1.
The simplistic formula “the more you have, the more you can make” is at least misleading when it comes to ISK from investors. Because that's ISK you do not really have and you pay interest for the opportunity to work with it. And if your gross profit is too low or the interest rate for the investors ISK is too high you might even suffer a loss.

2.
The Margin Trading skill is a tool to leverage the capital you use for buy orders. Obviously you'll need the full amount when one of your buy orders fills. The trick is to have enough ISK on hand to pay for SOME of the buy orders and sell the acquired items fast enough to stay liquid.

3.
Your idea to keep “roughly twice the liquidity on hand than you have sunk in the market” to “counter loss [from sell orders losing value] with newer investment inventory” is complete nonsense and you are even contradicting yourself. Because if I “counter the loss” like you suggest I obviously cannot comply with your “twice the liquidity on hand than sunk in the market” rule. And if it's ok to deviate from that “rule” at some point, there's no reason to comply with it at the beginning.

Risk management on a meaningful scale is NOT done by having “enough” liquidity on hand but by asset diversification. You don't put all your eggs into one basket. If done right there's simply no need to “counter loss with newer investment inventory” (which is impossible anyway, unless you run a ponzi scheme).

4.
Gentleman’s agreement? With regard to financial business? In EVE-Online?? Really???

And no, keeping that much ISK in your wallet doesn't “demonstrate some capability on the managers part”. To the contrary it's an indicator of gross incompetence. A competent manager would put (most of) that ISK to work, to generate profit for himself and his investors.

And with “return rate” you are referring to the interest that you agreed to pay to the investors, right?
Which is a fraction of the total investors investment.
And which is being paid at a fixed target date.

If you are really worried about not being able to pay that interest rate unless you keep “twice the liquidity on hand than sunk in the market”, than your business idea is so fundamentally flawed that no investor should entrust you with any investment in the first place.

Precisely.

Though you've acquitted yourself quite well by firing off a litany of facts about the market, approaches to trading and the concerns of those who run operations like ours.

More to the point: you've shown there are other ways to play the market game--and frankly the game in general--besides the "all funds must be invested into the market, down to the last one hundredth of an ISK, or you're doing it wrong" mentality that seems to be governing the objections to our system of banking.

As the side taking the "all in" position have devolved into repeating themselves and refusing to at least acknowledge your points, I wonder if we might draw your attention away from them and to us?

We were impressed by your response posted to the Finding Enjoyment From the Marketplace
thread, wherein you talked about the ways in which successful trading allows you to enjoy the rest of the EVE game experience.

The way you talked about always being able to fly in style, and especially when you talked about taking care of your pilots, resonated with us.

We too like to fly in the very best ships (or at least our favorites amongst the many ships of EVE), which is to say we like to spend our ISK, not hoard it and dump it back into the market.

Where you like to take care of your fellows, we feel strongly that taking care of our customers is most important, because for us that's where a good portion of the fun is at.

We won't ask how you succeed on the market, but we are curious if you'll share a little bit about how you got to your current state of play in EVE.

Have you always been in a position to look after your fellow pilots? And have you always enjoyed the same level of fun from the market? Ever try the "all in" play style?

Have your views about how to play (and more importantly, enjoy) the game changed significantly since you first started playing?

Thank you in advance. And if you choose not to answer, that's OK too. :D

Speaking of public opinion: you were curious as to why we'd go public.

We felt that our operation could use some accountability and we wanted our current and future customers to have the means to see what we do and evaluate our process.

MD was the perfect place for it.

This, despite the fact that the attitude towards banks on MD--in whatever form they pop up in--is unfriendly to the point of being hostile; that anyone who tries to create a bank is shouted down by 99% of the regulars; that the people doing the shouting seem to be uninterested in broadening their horizons, much less being supportive.

Of course the knowledge base on MD is huge and we certainly benefit from it. The people we choose not to interact with (on this thread) have things to say in other threads that are almost always useful.

We don't see the opinions of the many on MD as having any sway on our ability to attract and retain customers. On the contrary, the friction generated by announcing a bank on MD, when properly managed, generates interest.

The five bold individuals on our exclusive customer roster, as well as the two capsuleers waiting in the wings, are proof of that.

tl;dr? :)

We appreciate your time all the same, Scion, as well as the time of anyone else reading this. Thank you.

I think this is an unfair judgement on the MD community. Many members of this community have a great interest in the development of the 'secondary market' as it is often referred to, in new tools, business structures, and ventures (including banks). Your interpretation of the reaction of the community to your venture appears to be that you assume the hostility and lack of support means there is no interest. You could be forgiven for this given that you probably haven't been around long enough to understand how and why MD has developed it's attitude over the years.

In the absence of any tangible tools to properly evaluate and manage risk when investing, MD has, over a number of years, developed a hard hitting peer review approach which requires any ventures asking for money to run the gauntlet, with the intention of weeding out the weaker scammers and likely failures. It requires a high level of skepticism and criticism of every aspect of an offering, part of which is a focus on the commerciallity of a venture. It's not foolproof but it's all we have. And to be fair, it's a fun pass-time.

In particular, banks come under even higher scrutiny due to the history of failures and the difficulty in making them work with limited risk. Your specific offering has and will continue to see harsh criticism due to the apparent lack of commerciallity (it doesn't make any sense because you are not profiting based on your structure) and the absence of any confession that roleplaying or rep-grinding is actually at the heart of what you are doing.

You handle criticism well. Just bear in mind that there is a reason for it, and 'proof' of your business working by virtue of obtaining a small number of customers does not invalidate the criticism.