Market Discussions

That's nice.

I do agree that if there is ever to be a serious stock market in EVE, it can only come about if CCP provides an ingame market much like the current market for commodities. But if we are strictly talking about banking here, then I see less need for CCP to create tools. We currently have all the basic tools we need for banks--an easy money transfer system, customizabile corp wallets, and retrievable APIs. The missing ingredient is that the players have not developed a banking system that players can trust.


This statement is factually false. Hexxx is right--EBank and several other banking ventures have been enormously popular. As a bit of personal testimony, I run a private bank for friends whenever they are actively playing EVE. Also, take a look at the bond activity on the MD forums. People are very attracted to the idea of their money increasing steadily over time with zero effort from them. Hypothetically, if there were a banking system in EVE that players could implicitly trust, then players would flood it with money because there is such a high demand for banks.



I disagree a bit here. Auditing can determine the financial competence of the player through analyzing past transactions (i.e. trade, investment, etc.), and it can help guide a more personal questionnaire-driven inspection of the player's actions. In reading through bond offers, it seems apparent that a great deal of scammers can not hold up to the weight of an informal and formal audit of their wallet history, because they either lack wallet history to substantiate their claims or the financial competence to make reasonable claims about what they plan to do with the ISK. You are entirely right, however, that there are a few financially competent, yet corrupt, players who are unhindered by audits. But I think you can use an auditing process to weed out a great majority of scammers.

I think your underlying sentiment was that auditing is not a foolproof method to verifying whether or not someone is a scammer. In that sense, I completely agree with you.


I was more entertained reading this post than I probably will be doing anything else today.

I completely agree with your two points, but I do not believe your conclusion follows from them. I think these two problems need water-tight solutions, so before we create any bank we should only concern ourselves with theory crafting about a banking system. This whole discussion is exactly the intellectual environment that creates solutions to those problems.


/Philosophy B.A. >_<

how would you like the thought of an automated loan system that automatically withdraws money from your wallet after the arranged time?
would that be bad for the sandbox?

of course it would withdraw money wether you have it or not, biomassing characters is.. well .. another thing

While I think uncollateralized bonds on MD show a possible future for uncollateralized banking, I do agree with your points on collateralized loans. It really is an ingenious way to make an extremely safe loan market. I wonder if TornSoul would mind commenting on how much demand BMBE receives to get an idea of the saturation of the collateralized loan market.

What's your view of third party collateralised loans? They seem to be a significant proportion of the market in this area but, technically, have all the fallibility of uncollateralised loans as the third party still needs to be trusted.

It's tricky. I'm tempted to be dishonest to not invite ambiguity...but **** it:

I think third parties are valid when someone has built up a reputation beyond any isk value and ultimately disassociated with any isk value. I think certain people become so well-known and trusted through an organic process of playing the game and interacting with people in corporations, alliances, the forums, eve-related groupings and subcommunities that they can be perceived to have gone beyond "having a price". It also helps if they're fabulously wealthy already, though this isn't absolutely necessary. Regardless, the amount of such people can probably be counted on two hands, maybe one.

Now, the important distinction is someone who comes out of nowhere holding greater and greater amounts of isk in trust. I think you would be foolish to trust this person with your isk.

That said, with direct collateralized loans you have a very convincing set of incentives such that people can interact to their mutual benefit with reasonable confidence, given the proper "due diligence" by both parties.

Collateral is key. One of the biggest differences between eve finance and real world finance is that in the eve, there is no claw back if the individual taking the loan doesnt pay. Essentially, once the money is transferred, the individual can do whatever they want with it.

The creation of a system where the money wasn't transferred into the actual wallet but rather is sequestered in an escrow account where the individual could trade and withdrawal their profit would solve this. The way I would envision this working is that if the individual stopped playing, the bank could take back whatever assets were left in essence "foreclosing" on the loan. This would take a lot of the risk out of lending, lower interest rates, and allow of more trust. It wouldnt remove the ability for the individual to do stupid things with the loan and lose money; however, it would allow for the expectation of repayment and reduce delinquency of loans.

Limiting the individuals ability to steal outright would allow banks to exist in a fashion that would protect the consumer without creating a "federal reserve" or FDIC insurance model that would literally explode the money supply and potentially create massive inflation. This system would also be more realistic because no one banker could withdrawl the entire value of a bank. This simply doesn't exist in the real world.

Not sure if such a tool is in the works; however, I think it would go a long way toward solving the problems we currently have.

Also, thinking about the above idea, it would be Interesting if CCP created a system like alliances that banks or institutions could pay isk to create (say 10 billion, much like the fee to create an alliance) that would provide a charter or banking structure that in game players could reasonably trust. Think of this as documents of incorporation or some other sort of agreement that the individual institutions would sign that would provide a layer of trust insured by concord. Maybe I am way off base, just an idea.