I started this game 2 weeks ago, so my opinion may be lacking in late game knowledge, but I feel it’s still valid from a new player point of view. For a game that has been running for a year and a half, I was expecting liquid markets for low tier products where a new player can simply plop in and integrate easily, but in reality CX liquidity is horrible. The spreads are huge, most markets are illiquid and it makes it very hard for a new player to get a feel of what is worth how much. DW shouldn’t have a 10-15% spread with such low volume in a healthy economy since it’s required in all recipes indirectly. Large spreads means an economic with high friction and high friction means an economy where trade doesn’t happen efficiently. It leads to fully integrated private production chains with trading being done as item swaps instead of through money.
The 2 main reasons I see why is because market making is a time consuming activity and money is essentially worthless in the production chain.
About market making, it needs to be compared to producing stuff in terms of ROI. You need to reserve goods and money to this task, so you should expect similar returns. Volume plays a huge part here, but also how easily it is to set orders. Since it’s all manual, you need to be consistently online to monitor your orders and replace them manually. That leads to larger spreads, which leads to low volume, which leads to less invested capital, which leads to larger spreads. It’s a negative feedback loop.
An automated market making feature would really help here. Something like the various AMM protocols out there. For example, I give it 1000 DW and 50K with a 25 - 100 price range. This AMM will place laddered orders in a way that will leave me with 100% cash if spot is over 100 and 100% DW if spot is below 25. Since it’s automated, this profits while offline and ROI necessarily increases, which increases volume, invested capital and liquidity. It’s a positive feedback loop.
The other reason is money is worthless. If I’m selling something in a CX, it’s because I want to trade for something else right away. Other than tax, there’s no use for money and that tax is already very low. Due to high trade friction, the best plan is to have a fully integrated production chain up to whatever you wish to produce. For example, selling ADR to the MM or producing more construction materials to expand. You could outsource parts of it, but that’s going to happen privately because of high market friction. The only value money has is to buy from the MM and that’s where the economy will end up when consumables are fully outsourced to the MM.
What I propose is to change workforce consumption to wages and get rid of CX MM. The way this would work is you could set either a wage or a desired efficiency. Consumables would be held in a planetary NPC liquidity provider account and use a simple AMM protocol, like a*b=k. When you pay wages for a production cycle, you will be buying required consumables to give you the desired efficiency. This liquidity provider will not sell these consumables directly and will only buy them. This is open to all players since it’s a planetary entity. This means anyone can bring in consumables if the price is right and it creates a stable local price for a lot of final goods.
What this does is it breaks up private production chains by adding an implicit public trade step. Instead of planning your chain as needing X amount of various consumables, you will be planning it as needing X cash. This immediately gives a production price to whatever you’re doing, which is a good thing for new players. It also means you need a steady flow of money, which means you need to start selling stuff, which is going to intice players to seek out trading at every step of the chain, helping with liquidity and volume at the CX. Since it adds an implicit public trade step, this improves all aspects that come with higher trading volume. You could completely abstract away the consumable part of your chain across sectors without needing to coordinate with dozens of players and that’s a good thing to keep complexity down.
Another aspect is it creates independent liquid markets on every planet for consumables. These liquid markets end up arbitraged on CX and that improves liquidity at the CX. I would expect players to setup local consumable production and deliver to nearby planets with the occasional trip to the CX for import/export. That probably already happens through LM, but this is private trading and doesn’t help liquidity. With this, anyone can setup in a sector and this should help colonization due to lessened coordination requirements.
For players who want to fully integrate, this doesn’t change anything. They can still bring in their consumables and sell them to the planet as they consume them. It leaves them with a price-neutral setup.
By removing CX MM, money needs to come from somewhere and these planetary entities are perfect for this. All these trades are perfect opportunities to create and destroy money. I would suggest basing the desired global monetary pool to be in relationship with global population size. Higher level population would generate more money. This means players are encouraged to increase and tier up their faction’s population because that’s where the money comes from. It would tie in better with the concept of colonizing the entire galaxy.
Another reason for this is currencies will now decouple from each other. Since there isn’t a constant bid order generating infinite money in all CX, currencies are now free to decouple from each other. Currencies will be worth how much labor efficiency they can purchase which should be interesting to see develop.