Market Makers and Game Health

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1

Market makers have been communicated to be a temporary feature and likely to be removed further down the line, however, I’d like to argue for how market maker might be essential long-term.

The reasons are deflation and inflation.

Deflation:

This topic has come up regularly in the community. In May 2019 the currency in game per company was around 30k (see Money sources thread). One of the arguments is that a high quantity of commodities is being produced while money in circulation does not reflect this increase making it hard for people to trade. Additionally I would like to argue:

  1. As the complexity of commodities increases this might be an issue as well, e.g. player build ships were communicated to possibly be in the millions. If building one ship has a cost equal of half the money in circulation, that would be prohibitive.
  2. What if long-term player based production of consumables is insufficient for supplying the whole player base (players might not be interested in being self-sufficient and producing all DW / RAT themselves and it might even be infeasible if this would require multiple bases per player just for DW / RAT production). This would result in players being forced to buy consumables from the MM draining money out of the system possibly resulting in uncontrollable deflation.

MM BUY orders help to bring money into circulation.

Inflation:

MMOs have a risk of a hyper inflating economy. Player generate ridiculous amounts of money by selling things to NPCs (in our case MMs). At some point inflation might be as high such that people might need to move to a different currency. Imagine a post-apocalyptic pruniverse where people trade in DW.
However, here MM SELL orders can alleviate the issue. In the following lets consider the DW MM:

  1. Money is anchored to the price of the DW MM Sell order. No matter how much your currency inflates, you will always be sure to get something of value which, in this case, is DW which is necessary for all of a player’s production.
  2. Removing money out of circulation: Imagine the currency inflates so bad that it is not worth to sell DW below MM Sell order. In that case people would buy from the MM directly. Let’s play around with some numbers: Right now at peak times slightly above 150 people are online simultaneously. Let’s assume that 200 players play actively (probably more). Moreover, let’s assume that people have around 2 - 3 bases in average, requiring around 100 DW per player (This will be higher with an older game world). If all DW is bought off the Market Maker, this results in 1.5m of currency being removed from circulation daily.

MM SELL orders provide a significant money sink.

Bottom line: MM buy and sell orders can be adjusted to add and remove money from circulation, however, they will need to be carefully balanced to ensure a healthy ingame economy.

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2

Market makers could be fine as a buyer or seller of last resort. The problem with many of them is that they don’t give the economy room to develop.

For example, I just destroyed 1750 RCOs on Promitor for less than 10k ICA by buying them for 590 and selling them to the MM for 585. It seems like the MM price is too high and encouraged over production. An MM buy should probably be just a little bit worse than cheapest price that a MAT can be produced for in the most optimal case. The sells should even higher than they are currently calculated to give plenty of space for real players in the economy.

If the game turns into MM feeding then what is the point really? I was always hoping to see a real economy develop and change over time.

3

I agree with you.

Market makers need to be balanced (and probably rebalanced according to inflation). I could imagine scaling MM BUY orders to allow for new players to sustain on them while figuring out how the game works, before starting to take risks in exchange with being rewarded with higher profits. The issue is that right now some MM BUY orders are so high that player can not just sustain but very much make profits risk free and without having to invest much collateral to set it up.

I think the game needs appropriate sources and sinks for currency which are provided by the MMs right now. There are likely better designed sources and sinks, however, I would be careful of removing MMs without a proper replacement.

4

In regards to the MM Buy Orders helping bring money into circulation:

This concept is how deflation was prevented in the first few months of the F2P era. Prices dropped across the board until RCO and C became very profitable to sell to the MM. Many FRM/INC were made and RCO/Cs were constantly sold to the MM for cash which was then used to buy other things (DW, Bfabs, PG, and so on). Due to opportunity costs, many players neglected to make DW/RAT in favor of producing RCO because RCO to MM was much more profitable. This kept DW/RAT/C prices relatively high for anyone who purchased it. Many players shipped RCO and C from promitor to Montem because they could immediately sell those items on Montem for NCC to buy BSE for cheaper than at promitor.

The primary buyers of DW/RAT/C were players who made SME and PP1s. FE and BSE continued to devalue because there were no MM buys for those products, but the input costs (DW, RAT, C) stayed the same.

Because of this, a large imbalance occurred in relative pricing. Players with FRM made a lot more profit than players with EXT/SME/PP1. They could also sell RCO immediately without worrying about competition. Furthermore, they had no worry of not being able to expand because they could always buy Bfabs at MM sell prices (they didn’t because montem players had no choice but to sell their product at prom to survive). So essentially players with FRM and INC were disproportionately rewarded for the same effort in both profit and time to recoup invested assets.

What i’m trying to outline is that the MM buy ecosystem between RIG and INC was very lucrative during the era of deflation, while the players with EXT, SME, and PP1 suffered immensely. Universal productivity was much lower because many players were effectively using their FRM/INC to “print money” rather than create usable material.

Eventually the depression spiral did hit BTAs on Montem. When this happened, players who had RIG, FRM, INC, SME, PP1, and/or BMPs all reaped the benefits of near immediate and lucrative sales. Players who built high tier items were left out (PG, Lfabs, SEA, INF, HSE).

When players began selling electronics to the MM buys, we began the era where ALL products in the entire universe were finally fair game. Now that we are there we see crazy market opportunity for Lfabs (maybe even RFabs now), INF, HSE, AEF, EPO, PG, and so on. We have giant waterfalls of KOM and COF being devoured, players beginning to invest into ORC and large scale HER production, INF is gold, and HSEs are on preorder.

The MM buys that bring the most money into circulation must encompass all materials in all tiers in order to provide a fair chance for a free market to exist.

I’m good with an MM buy for RCO, but it must be less profitable than an MM buy for C.
I’m good with an MM buy for C, but it must be less profitable than an MM buy for FE.
FE <= BSE.
BSE <= LSE.
LSE <= RSE.
RSE <= ASE.
ASE <= WR.
WR <= NV2.

As long as the MM buys are more profitable for higher tier items than they are for lower tier items, it will always encourage players to build higher tier items (Which in turn boosts demand for lower tier items).

If the MM buys for lower tier items are higher than for higher tier items, it will always encourage staying low tech (it’s effectively subsidizing lower tech)

I agree in that MM buys are currently required to stop deflation from occurring, but the biggest failure of the MM buys in this reset was that the stepping stone was a giant leap from RCO all the way to WR, and there was really no in between.

For completeness sake, I will say that there was a BSE MM buy that existed prior to the F2P surge that was lucrative and then nerfed. Nerfing the BSE MM buy was a very poor decision as it simply moved the lucrative MM buy to RCO/C, which destroyed Montem and Katoa’s economy and promoted Prom from S-tier to godlike.

IMHO, there are better ways to add currency to the system. A simple faucet for all players (Every working pioneer gives 5 currency per hour, more for t2-t5) can add currency to the universe every day. A 1% tax on all CX transactions can remove a percentage of the currency in the universe each day. This will guarantee an equilibrium somewhere and the universe can anchor to that rather than an arbitrary MM buy.

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5

Your idea in the last paragraph is interesting, but I think would have a direct push towards a single player game. It costs money to trade, but I get bonus income for being self-sufficient?

Will be a hard sell to the devs, given their push against such design.

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6

I really think that in order keep the game playable with enough cash for everyone and keep it from getting boring from some people getting too rich from PvE selling to MM, we need to get rid of MM. In order to do that, we have to be able to re-use the funds already in the system to achieve higher tiers of productivity. So, to bring down those costs, there needs to be a way to make a tier (except for the top tier) less expensive as the universe develops more technology and higher tiers.

The way that I propose to do this is to pick some key “gateway” materials, such as CU and CL, and provide alternative recipies that use higher tier materials to make them easier to make. The effect of should be to bring down the cost of the mastered tier far below the cost of the next tier, though not all the way down to the tier below. For example, as T2 is mastered, use a new T3 material to produce materials in T2 cheaper, but don’t make T2 goods inexpensive as T1, thereby freeing up resources to master T3. An in-game example of this is FLX. It’s a T2 material that makes T1 materials cheaper to make through more efficient smelting. It’s important to leave the top tier expensive, so that people will always have a challenge to produce top tier materials.

I think it’s important to note that this is somewhat already in the game in regards to natural resources; as we get access to higher tiers, we get access to resources in higher concentrations on higher tier planets. However, this is not true for manufactured goods, such as electronics, which obviously IRL have technological breakthroughs that make things much more efficient to produce. It’s this technological breakthrough that these alternate recipies and higher tier planets simulate.

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7

Alternative to MM:

  • Population infrastructure buys goods for a nominal fee from the Governor
  • The profit that the governor makes from this could be pocketed, or it could be used to build more infrastructure.
  • This will set a market for the governor to buy these goods from other players and feed it into the infrastructure
  • Taxation for production runs and local markets should be removed from the governors control (solves the cartel problem)
  • Taxation and LM fees should be a low fixed value in faction space that goes to the faction
  • Taxation and LM fees should be zero in non-faction space

This encourages the building of infrastructure, makes the governorship rewarding instead of a soul sucking resource sink, and provides a controlled faucet of currency into the economy and a slow trickle of currency out of the economy from taxes.

8

With this run supposedly on its last months but a very developed economy. I wonder if an actual real test which we can learn from is to remove all MMs from now and see how the economy functions without.

9

I don’t think it will have much effect to remove them in this run.
However, I want to see how a new universe without MM would fare. :slight_smile:

10

I do think they serve a good use in getting the market made. But with so many expected players at the start of a new server maybe there wouldn’t be a point.

11

Yes please!

Some CX are buying RAT or Fabs from the MM currently.

Remove them and let’s see the universe burn!

“It’s a test after all”

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