Unlimited CX storage

We had a little discussion on the discord about the lack of Helium in the public exchanges and it made me think why - I believe there is a reason that is preventing this, in a rather roundabout way.

The lack of H could mean there’s no market for it, but it could also mean there’s no reason to mine it as other resources are much more profitable. Normally, producing basic goods that fill up the CX would reduce the price of those good until they becoem unprofitable to produce, incentivising players to go find something else to make.

However, because storage space at the CX is infinite, there is no disincentive. Taking an example of LST at Antares. there is a supply of 10k, and a demand of 2k. Normally I would expect that huge disparity to cause the price to drop as suppliers fight to get rid of their goods, but as storage is free and infinite, they can list it at outrageous prices that will never be fulfilled without any penalty. Maybe one day they will sell it, or (possibly) have simply forgotten its there. If they have enough money coming in to manage their base, then the CX becomes free storage.

There are others like this, the supply is large, the prices do no reflect the supply ratio, the players filling the CX do not need to find something else to produce. Now, if that storage was no longer free and cost the same as warehouse fees (at least) or required the player to own sufficient storage (ie the goods listed continued to take up warehouse space until sold) then those players would either sell it for less and less ot get rid of it, and would stop making more unsellable produce.

In the real world this is what happens - I recall oil prices dropping to zero a few years back as the demand dried up and traders had nowhere to put the oil they’d contracted to buy. Internet says it dropped to -$40 a barrel (that’s paying people to take it away) Obviously that was an extreme event caused by the pandemic.

I’m told the LMs with limited storage work very well. Perhaps the same limited storage system should be implemented with the CXs to encourage more trading of goods, and more production of goods that currently have little supply compared to the demand.

So I suggest either charge fees for CX storage equal to player warehousing, or keep all goods for sale in the original player warehouse until fulfilled (greyed out or otherwise indicated as “allocated for sale”).

An alternative might be for contracts to have a limited lifetime before they are automatically cancelled and goods returned to the player warehouse. That might also be a mechanism to persuade players to try and sell their stock.

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Personally, I think this leads to a greater lack of resources on the CX in the end: in a way, the reason HE on Antares is gone is because not enough of it was stored on the CX unlike with LST.

If stocking the CX is disincentivised, by making it cost more to do so, then you’ll have less resources being made available on the CX and more people will be driven to private trades to avoid the storage fees associated with trading on the CX.

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As a case in point, I maintained a large stockpile of H (which stands for Hydrogen, not Helium) in reserve on the market in Antares and therefore despite the price soaring I was able to keep it for sale constantly.

If I was being charged for storing it in a buffer like this, given how long I stored it for and the capital tied up in it already, I probably would have dumped it all into the MM a while ago. As such, H would have been unavailable for sale on the CX at any price for periods during this, since I was shipping-limited and people would have bought in bulk to hedge supplies once they got really low (so anything I brought to market would have been sold quickly).

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Negative oil prices were people gambling on futures without any intent on taking delivery. It went negative due to global storage shortage.

The reason for low liquidity comes from opportunity costs. ROI is fairly short in this game at a few days. Any day that resources are idle is a few percentage points of growth lost. If providing liquidity, you’re expecting this profit, which increases asking price based on risk, which is proportional to your quantity compared to total volume. As a buyer, you pay for this premium.

The problem is you might as well harvest these resources yourself and save on that liquidity provider premium. And so there’s little volume, less incentive to provide liquidity and self sufficiency becomes more profitable.

The highly prices asks are there to catch a random demand spike while serving as storage. Free storage might be a reason why they’re there instead of elsewhere, but charging a storage fee won’t incentivize producers to sell. It will simply move the storage elsewhere where it isn’t obvious.

Vertical integration is too powerful. If doing a recipe requiring 3 resources, there’s no benefit to harvesting a single resource 3 times and trading for the other 2 compared to harvesting all 3 resources yourself. Base resources trading is limited to new players who cannot do it all yet. Trading will happen on higher tier materials that require multiple bases to supply.

There’s more risk involved for players that either extract resource to sell or buy resources to process compared to players who extract and process themselves. That’s because you’re at the mercy the other player dropping out. The more market exposure, the greater your risk, which means the more you consume your own resources, the more stable and profitable you are.

Transportation costs also play a role. Moving resources from planet A to CX, then CX to planet B is more expensive than going from planet A to planet B. Base resources have the worst value per ton and avoiding the CX means saving a lot on transportation.

That’s why there’s no H on CXs. It’s simply not profitable to do so compared to producing just as much as you need.

When having 2 bases producing H or 2 bases processing it is much more profitable than having 1 base producing H and 1 processing it, then we’ll have liquidity.

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CX storage needed to be increased with the advent of 2000 and 3000 space ships. There simply wasn’t enough room to make the ships usable.

Normally, producing basic goods that fill up the CX would reduce the price of those good until they becoem unprofitable to produce, incentivising players to go find something else to make.

However, because storage space at the CX is infinite, there is no disincentive. Taking an example of LST at Antares. there is a supply of 10k, and a demand of 2k. Normally I would expect that huge disparity to cause the price to drop as suppliers fight to get rid of their goods, but as storage is free and infinite, they can list it at outrageous prices that will never be fulfilled without any penalty.

Not quite. When you list goods for sale, they don’t count against your storage quota… so even with limited storage space as before, it was possible to stockpile huge quantities of items for sale.

I think you’re completely wrong about this to be frank. The #1 thing that is important here is liquidity within the markets. The fact that there is 10k LST available to buy is a good thing. You don’t want an illiquid market with minimal ability to react to supply\demand shocks.

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I think I am right - even if I’m wrong on the necessary changes that need to be made to make the markets work better.

However, listing a lot of items at a high price does not increase liquidity. That only occurs when the prices are within the range of prices buyers are willing to buy at. So if I buy a billion pencils and list them on ebay for $100 each, I haven’t increased the liquidity of pencil market as nobody is going to buy any of them.
and so to make me sell them at a more realistic price, there needs to be a mechanism where I am penalised for not trying to sell them, storage is an easy one to nudge players into selling, a better market maker would be another, as would listing fees. I think storage is the simplest to implement.

I don’t know why people are not selling - right now you could buy a shipload of the 36k of RAT for sale in Antares, take it to Benton and sell for a 33% profit. then load up on FEO for the return trip for 100% profit. But nobody is doing this. (I would if I had the capital) Is it that the game is encouraging production over trade by allowing features like infinite storage at the CX?

FEO is so heavy that you can’t fit much of it on a ship. That’s probably the main reason why people trade FEO less than other resources, and the price differences for FEO are higher between CXs.

I don’t think that making it more expensive to list goods for sale will encourage lower prices. The cost of listing will be factored into the prices instead. It’s great that you’re thinking of ways to try to increase liquidity in the markets, but I don’t think this idea is the way forward.

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However, listing a lot of items at a high price does not increase liquidity. That only occurs when the prices are within the range of prices buyers are willing to buy at. So if I buy a billion pencils and list them on ebay for $100 each, I haven’t increased the liquidity of pencil market as nobody is going to buy any of them.

That’s not how liquidity works in the real world. There are several types of liquidity, I’m going to gloss over this.

Liquidity is not infinite, there are not infinite buyers and sellers at one price. Thus, by definition, a range of prices where there is liquidity on offer is how a free market works - as represented by the series of offers on an orderbook. Your opinion on the “fairness” of the price of those is irrelevant.

If you buy a billion pencils and there is nobody else selling them, then that’s the only game in town and that’s the new price. Welcome to how markets work. If you list at an unrealistic price which nobody will purchase, that means the entire economic activity is occurring at a price lower than your offer and is functioning properly without you. What’s the problem here?

Why does the orderbook on the CX have to be completely empty with these incentives for people to get rid of their inventory? Having vast quantities on offer that can be purchased at a whim is critical for the health of the game. It really sucks not being able to just buy something quickly in the event you rather need it. Having people posting offers is key to that.

and so to make me sell them at a more realistic price, there needs to be a mechanism where I am penalised for not trying to sell them, storage is an easy one to nudge players into selling, a better market maker would be another, as would listing fees. I think storage is the simplest to implement.

I think it’s a bad idea to use centralized planning to encourage people to buy\sell items. The infinite marketmakers are bad enough as it is - though they are a truly necessary evil. And it’s not even the same type, there is no incentive to buy or sell. The orders simply exist.

I don’t know why people are not selling - right now you could buy a shipload of the 36k of RAT for sale in Antares, take it to Benton and sell for a 33% profit. then load up on FEO for the return trip for 100% profit. But nobody is doing this. (I would if I had the capital) Is it that the game is encouraging production over trade by allowing features like infinite storage at the CX?

But people are doing this. I do exactly this type of arbitrage between Moria and Hortus. But you’re limited by your shipping capacity. And the market’s willingness to absorb the quantities you could transfer is less than you think. You can’t crush the market in one go because you want the spread to exist, so you have to trickle the supply out over time.

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I’m also doing the same and just want to add that there’s actually less trade opportunity than @gbjbaanb thinks there is. When I had both my starter ships doing just trade runs, it never made sense to have both run the same route. Simply because one is enough to transport all the valuable stuff in one go (given enough capital) and the CX needs a day or two regenerate stocks. As @Ficks_Dinkum says, this excludes high tonnage goods like FEO. Those only make sense with 2000/2000 ships and people who can afford them usually have other things to do with them.

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Sure, that might be what some people are doing, and I have no complaint about that. Nor do I have complaint about those buying and selling the same goods for a spread (and profit) these are at least market making. My issue is with those selling at 2 or 3 times the current market price with vast quantities.

eg On Antares someone is selling 60,000 units of DW for 110cr. The current price is 50cr. His goods show up as massive supply, but that is not being refelected in the price. And I was always taught that sdupply and demand economics means excess supply = lower prices. But here, massive supply means nothing, just effectively hoarding.

Now, I don’t know if this player sold into a market a year ago when DW was high and has since stopped playing, or if he thinks he really will one day liquidate his 6million cr bounty. But even 3m cr should be being used for something else in the economy, building more bases and high tech goods. That he isn’t means the game has a problem, excess production of basic goods isn’t penalised, so there is no incentive to make the higher tech goods that the game requires be made.

Obviously this isn’t a game-breaking problem as some do this, but I feel it needs to be looked at.

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A price that nobody is ever going to buy at is simply not participating in the market. Prices should be in a range, but these are all outside that range. Unless there is a shock of no supply, or no demand, prices should stabilise according to the quantities as people try to offload their good for the price the market will bear. Selling my pencils for $100 each is not being in the market at all even if they are listed for sale

My previous reply mentioned a player with 3m cr tied up in stock. Perhaps the game is too easy with profits that he can afford to throw 3m away like this, and if that’s the case then something needs to be done to encourage him to sell and produce other things. 3m, he could be opening new bases, producing those high-tech goods the overall economy needs.

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Perhaps that 60,000DW isn’t actually going to be sold. Perhaps it’s waiting to be moved to a part of a corporation. Perhaps they will sell it once market conditions change, but they’re throwing up a high offer just in case someone REALLY wants some DW.

I know I personally list items I will eventually need, but don’t need right now for stupidly high prices. If someone buys it cool, I win, I can just rebuy it again for lower probably by the time I actually need it.

IDK these things. But I think creating incentives to execute trades is not a good idea. It creates all sorts of 2nd and 3rd order effects.

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Check out a real order book and you’ll see the same thing, massive quantities at extreme prices.

An open market is unregulated and self-correcting.

Month late and all, but still…
What the game calls supply and demand is not what economics means by supply and demand. Simple as that. Same words, different concepts.

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I agree with you. It’s even worse that that. Some players, including myself, use the CX simply as an unlimited and free warehouse by posting sell orders at extremely high prices or even higher than the MM ask. The products listed in this way are of course not meant to be sold. They are simply stored. CX-storage.

Extraction and production is much more profitable than trade (i.e. buy cheap and sell expensive) in this game. Personally I won’t even consider a round trip between 2 commodity exchanges if it generates less than 100 K credits in profit. This is because usually I generate several times that much per week by simply selling what I produce, and my ships are better used to maintain the logistic lines between my different bases. Usually, inter-CX trade even with a fully loaded ship (500 t or 500 m^3) does not generate enough profit for big players to consider it. And small players don’t have the capital to load a full ship.

You see, a player who can afford to waste 3 millions probably has already many bases and produces already high tier goods. And probably spends a lot of real life time in PrUn. For such big players, the primary limitation for expanding even further is the real life time and attention it would require. So past certain level, players just stop expanding because that don’t want to get more involved into a game. They might have an IRL job, a family, they need time to rest and eat, and a day is only 24 hours long. Once they reach this level and stop expanding, they just pointlessly hoard millions of cash.

Yet, in real world there isn’t such a thing as unlimited and free storage. I think that the main point of the thread is that the unlimited and free storage provided by the CX is simply unrealistic, and the materials listed on the CX should be somehow physicalized.

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In this situation, you need to act similarly to the futures securities exchange. You put on SH an obligation to provide a product, someone buys it, and then declares to the owner of the product that he must deliver to the destination. thus, the manufacturer occupies his warehouses, trading is carried out with securities with the possibility of resale.

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