Info: Entropia PED flow and Loot Pool basics explained

Are you forgetting the 100PED withdrawal process fee:confused:

Wire transfer fee they have to pay. This is not something that goes to mindark. Really quite basic. They've even said as much because boa changed to 35 bucks.
 
Why spend so much energy and wordswordswords to refute E-Lite's claim... only to turn around and confirm it:Didn't realize u actually saying exactly the same, only using different words.. :)

E-Lite has correctly described the basics of the RCE system.
  • Lootpools or not?
  • Unspent PED's ingame covered with liquid funds IRL 100%, or not?
  • How much exactly MA charges to process withdrawal and deposit?
  • How long does MA delay the withdrawals intentionally and how much is related to the background checks required by the law?
- yes there's a few details we don't know for certain. Luckily in the big picture those details are irrelevant. Could be this, could be that...
All those details don't really matter as long as we speak about the basic concepts of RCE.

It's a very useful post, it's amazing how many players are totally in the dark about the very basics... :yup:

But we aren't. E-lite says MA has all the ingame funds covered. They don't.

For example:

If you deposit $1000 USD (10K PED) they are not accounted for as MindArk assets as long as they are either on your PED card or traded for against items.

This is wrong. PED deposited are accounted for as MindArk assets as soon as they are deposited. What happens with the PED value once it's inside the game is another story. But the money belongs to MA the moment you deposit.

[Speculation]It is more likely that what you do with the PED inside the game determines the share of the money between MA and the planet partners.
 
That one we know for sure. They dont! They dont! They dont!

They dont. They used to though. But they changed to a fractional reserve. The central bank does the same thing. Not necessarily a bad thing but not a good thing really either.
 
But we aren't. E-lite says MA has all the ingame funds covered. They don't.
If u wanna split the hair, yes it's not that simple and straightforward. It never is. Banks don't have all their loans covered with liquid assets but the loans are still loans, right?
I mean the very basic principle still holds, despite all these exact technical details under the hood.

[Speculation]It is more likely that what you do with the PED inside the game determines the share of the money between MA and the planet partners.
Yep, I believe u right.
 
Just... no...

First of all no one knows A) How the loot pool works or B) If there is a loot pool at all.

Second it is a bit sad to see old myths be displayed as fact. There is not a shred of proof to support these theories. Sure, we all heard Marco say "MA makes money from decay". But that in itself proves nothing. Lets keep in mind that MA has never confirmed there being a "loot pool" (or did I miss something?) - in either way you'd be wrong on all other points.

There is as much proof of perception increasing your loot as there is of the existance of a loot pool.



Well, it kinda is just like that actually. PED deposited into entropia goes straight into MA's pocket. If there is a loot pool or what not (however the game handles payouts) is another story entirely.



No. Or kinda no. It depends on if there is a loot pool or not. Either way you're not likely to loot anything without spending PED so it's a moot point.



No, that is not how it works.



Well.. nah. :(


By now you are probably asking "Well how does it work then?" The answer is this: PED deposited into Entropia = income for MA. PED withdrawn from Entropia = expense. The total ingame PED balance is considered a contingent liability and is thus not accounted for in the balance sheet.

For example:

The 2014 annual report for the MA group has this note:



The ingame PED value for 2014 was 97 million SEK.

The balance sheet for the entire MA-group for 2014 lists assets totalling 32 million SEK.

That is your casino example out the window.

You do realize that Mindark has confirmed that there's indeed such a thing as loot pools. Not only that, they have confirmed that the loot pools for hunting, mining and crafting are separated from each other.

Regards the casino example, you must have misread my post, because that is exactly what I mean. The "chips" (peds) in your pocket are not accounted for in the winnings pool (MA actual assets).
 
If u wanna split the hair, yes it's not that simple and straightforward. It never is. Banks don't have all their loans covered with liquid assets but the loans are still loans, right?
I mean the very basic principle still holds, despite all these exact technical details under the hood.

Yep, I believe u right.

They dont even have that. They dont have a singel SEK that covers PED-value ingame.

They do have cash-assets which they use to pay operating costs and buybacks of PED
 
First of all no one knows A) How the loot pool works or B) If there is a loot pool at all.

I think MA said that items that are TTd are recycled back into the loot pool. That would indicate some level of loot pool
 
If u wanna split the hair, yes it's not that simple and straightforward. It never is. Banks don't have all their loans covered with liquid assets but the loans are still loans, right?
I mean the very basic principle still holds, despite all these exact technical details under the hood.

Not really. I don't they banks display their loans as contingent liabilities.

You do realize that Mindark has confirmed that there's indeed such a thing as loot pools. Not only that, they have confirmed that the loot pools for hunting, mining and crafting are separated from each other.

Regards the casino example, you must have misread my post, because that is exactly what I mean. The "chips" (peds) in your pocket are not accounted for in the winnings pool (MA actual assets).

Apparently they have. Putting aside my doubt that anything MA claims to be a simple truth, to actually be just that... Sure, there might be some mumbo-jumbo going on to control how much loot can actually be looted at any given time (most likely to prevent too many people hitting ubers at the same time and withdrawing the lot). But so what? That in itself has little to do with how MA makes their money.

Regards the casino example, you must have misread my post, because that is exactly what I mean. The "chips" (peds) in your pocket are not accounted for in the winnings pool (MA actual assets).

I'm sorry but this part doesn't make any sense at all. And before you said that you need to spend, ie get rid of, your PED before someone can withdraw them or something. I am clueless what you mean by that.

(It is not until some or all of those PED are lost into hunting, crafting, mining or decay as they are added to the loot pool and to the withdraw-able pool.)

It's just not true. Say, for a moment, that MA has zero money on their bank account. Inside Entropia there is only two avatars. One has just deposited 100 PED {MA quickly spent the 10 USD on hamster food and has no money}, and has no other items or anything else. The other avatar has nothing. Avatar number one now decides to withdraw his PED. What happens? Nothing. Even if he goes hunting and with a return rate of 100 % spends his money five times over, and he then withdraws - nothing happens. Because MA has no money. It is not until avatar number two deposits 100 PED that the first avatar can actually withdraw someting.

I think MA said that items that are TTd are recycled back into the loot pool. That would indicate some level of loot pool

Might very well be so. There have been rumors about it for years. An item pool of sorts.
 
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It's just not true. Say, for a moment, that MA has zero money on their bank account. Inside Entropia there is only two avatars. One has just deposited 100 PED {MA quickly spent the 10 USD on hamster food and has no money}, and has no other items or anything else. The other avatar has nothing. Avatar number one now decides to withdraw his PED. What happens? Nothing. Even if he goes hunting and with a return rate of 100 % spends his money five times over, and he then withdraws - nothing happens. Because MA has no money. It is not until avatar number two deposits 100 PED that the first avatar can actually withdraw someting.

No, this is not how it works. That would be a ponzi scheme and illegal in most countries. If I ever found out it changed to bring like that, which I'm certain it isn't for the examples outlined by elite, I would pack up right now. Rest assured, if it were like this, the SEC would have already seized and/or stopped transactions from the US.

Hyips, as they are called, do not and have not ever had the lifespan EU has and is never audited by a legitimate source.

For mindark to make money, they must have turnover. That makes the game a sustainable apparatus. They don't get to spend your deposits. Your peds must be turned over or withdrawn.
 
No, this is not how it works. That would be a ponzi scheme and illegal in most countries. If I ever found out it changed to bring like that, which I'm certain it isn't for the examples outlined by elite, I would pack up right now. Rest assured, if it were like this, the SEC would have already seized and/or stopped transactions from the US.

Hyips, as they are called, do not and have not ever had the lifespan EU has and is never audited by a legitimate source.

For mindark to make money, they must have turnover. That makes the game a sustainable apparatus. They don't get to spend your deposits. Your peds must be turned over or withdrawn.

You are deadwrong.... Mindark use every dollar that is bought peds for (deposit as they say) to cover cost and profit. So you better run in that case
 
here u have it!

from the financial statement

"Corporate revenues consist of the net sum of deposited and withdrawn amounts from Entropia Universe made by users. The net revenues are presented in the income statement after deduction of reimbursements requested by participants in Entropia Universe. From January 1, 2009 the revenues in Entropia Universe areshared with the subsidiary Planet Calypso AB (earlier AR Universe AB) and the other Planet Partners."
 
Arggh. OK, let's go back to the basics:
Participants in Entropia Universe can at any time request a reimbursement of all their unconsumed assets in the virtual currency PED. MindArk then reserves the corresponding amount in SEK as an accrual.

It is not possible to determine whether a certain amount of PED at any given moment will be withdrawn from Entropia Universe or spent on activities within the virtual environment. MindArk therefore consider all unconsumed funds in PED as a contingent liability.

I know all ppl love to have all their fancy theories about stuff (and your take on it isn't any different) but there it is, an official statement black on white.

Say, for a moment, that MA has zero money on their bank account. Inside Entropia there is only two avatars. One has just deposited 100 PED {MA quickly spent the 10 USD on hamster food and has no money}, and has no other items or anything else. The other avatar has nothing. Avatar number one now decides to withdraw his PED. What happens? Nothing. Even if he goes hunting and with a return rate of 100 % spends his money five times over, and he then withdraws - nothing happens. Because MA has no money. It is not until avatar number two deposits 100 PED that the first avatar can actually withdraw someting.

This "story" is almost right, all except your "little invention" with the hamsters and MA having zero money on their bank account. When I look at their financial statements I can see no grounds for that claim. Regardless of how much is or isn't covered with IRL funds at any given moment, the principle does not change. Hamsters or no hamsters, it doesn't matter.

So let's try this again.

There's 2 kinds of assets inside game:
  1. unconsumed resources with fixed TT value (liquid PEDs and resources that can be liquidated instantly using TT terminal), and
  2. items/investments/resources with bulk of their value in markup.

The 1st kind is covered with the liability statement above.

The 2nd kind is self-balanced by the basic mechanics of the RCE. Which means, using your example, the avatar who has an item worth 100 ped ($10) is not a concern for MA at all. If we take all liquid PED out of the picture, before he can sell it and withdraw someone else has to deposit $10 (100 ped) first and buy it. After this he can withdraw his $10 and MA uses the $10 the other guy just deposited to finance the withdrawal. A true zero sum game that automatically balances itself.

That's how the RCE really works. Very clever system. :yup:
 
The 2nd kind is self-balanced by the basic mechanics of the RCE. Which means, using your example, the avatar who has an item worth 100 ped ($10) is not a concern for MA at all. If we take all liquid PED out of the picture, before he can sell it and withdraw someone else has to deposit $10 (100 ped) first and buy it. After this he can withdraw his $10 and MA uses the $10 the other guy just deposited to finance the withdrawal. A true zero sum game that automatically balances itself.

That's how the RCE really works. Very clever system. :yup:

What if a player has an item worth TT 1000 PED. All liquid PED are removed from the picture. The player sells the item to the Trade Terminal and then initiates a withdraw. Is MA worried then?
 
What if a player has an item worth TT 1000 PED. All liquid PED are removed from the picture. The player sells the item to the Trade Terminal and then initiates a withdraw. Is MA worried then?
There's 2 kinds of assets inside game:
  1. unconsumed resources with fixed TT value (liquid PEDs and resources that can be liquidated instantly using TT terminal), and
  2. items/investments/resources with bulk of their value in markup.
Either u decide to TT it or u sell it on market. One decision eliminates another. But you already knew that. :)

I suppose your real question was, how does MA calculate the total value of liquid assets?
It would be logical to assume it's the TT value of "the meaning of life, universe and everything"... er, i mean everything that has a TT value inside game. :)
 
and the towel - don't forget the towel..
 
From what I could see, you guys are arguing about two different things...apples and oranges. The only thing e-lite did wrong in here was to link up the "ped flow" with the "withdrawal flow".

Those are actually two "separate systems" imo. Someone deposits USD into MA, MA creates the equivalent amount of PEDs for that someone in that someone's ped card. What he or she does with those PEDs is of no concern for MA and towards MA's accounts...unless and until those PEDs are "withdrawn".

So the spending of peds within the game...is related to the "ped flow" which e-lite has talked about. And that sounds correct to me...much in the way casino chips and casino jackpots are handled I guess.

As for the USD that was given to MA, then what Konve and the rest have said is correct.

Total Deposits - Total Withdrawals...equals...the amount of cash MA has to finance itself as a company as well as pay its "suppliers" and other whatnots.

For this part, MA handles it more or less quite similar to a "bank". It keeps a certain portion as cash to handle for withdrawal requests (most probably about 3% - 4% of it). The rest is used up as operating cash for the company...and perhaps in "other investments".

Sounds fine so far...but then trouble comes when CLDs and "other ingame investments" come into the picture.

Those pay out PEDs for the players to use "or" withdraw. And iirc, they pay out quite a high dividend of more than 10% p.a.?

If those PEDs gets withdrawn, MA would have trouble in paying them...for seriously, I don't think there's too many opportunities in real life for MA to invest in stuff that has "more than" 10% p.a. returns. So in such a case, as time drags, MA will have increasing difficulty in paying back what they owe. Bad business sense imo.

(And money don't sprout from trees, you know.)

If those PEDs don't get withdrawn, MA's "contingent liability" gets increasingly bloated anyway...and as a contingent liability....they "could" get withdrawn at any time by the players....and that's bad for MA as well.

So what does MA do?

Put in place stuff that can be sold for as much markup as possible while paying back as little TT value in the items as possible. That's when you get what you see lately....equus quads, invisible armor, restoration chips...and "un-ttable items" (stuff that you can see have TT value, but you can never recover those peds).

(And mind you, all of them requiring you to deposit "fresh cash" instead of allowing you to purchase using ingame PEDs.)

And then they tell you that the "value is in the markup" (which can of course be altered/crashed at any time for any reason).

:laugh:
 
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This "story" is almost right, all except your "little invention" with the hamsters and MA having zero money on their bank account. When I look at their financial statements I can see no grounds for that claim. Regardless of how much is or isn't covered with IRL funds at any given moment, the principle does not change. Hamsters or no hamsters, it doesn't matter.

So let's try this again.

There's 2 kinds of assets inside game:
  1. unconsumed resources with fixed TT value (liquid PEDs and resources that can be liquidated instantly using TT terminal), and
  2. items/investments/resources with bulk of their value in markup.

The 1st kind is covered with the liability statement above.

The 2nd kind is self-balanced by the basic mechanics of the RCE. Which means, using your example, the avatar who has an item worth 100 ped ($10) is not a concern for MA at all. If we take all liquid PED out of the picture, before he can sell it and withdraw someone else has to deposit $10 (100 ped) first and buy it. After this he can withdraw his $10 and MA uses the $10 the other guy just deposited to finance the withdrawal. A true zero sum game that automatically balances itself.

That's how the RCE really works. Very clever system. :yup:

But you just assume that Konve's example has 0 tt value and 100 ped markup. As thoreau said - what if TT that item and wants to withdraw?

About the hamster expenses - what is your assumption than? MA ONLY pays rent, salaries, suppliers, taxes etc when they PROFIT? HELLO, MA has been in the red since financial crisis and moving to CE. The only good thing out if this is that in 2014 they had positive cash flow, therefore its somewhat stable.

As was mentioned before - liabilities are much higher than assets.

2011:
assets: 51 140 207 from which ONLY 9 469 852 is in actual cash.
Contingent liabilities: 65 954 957

2014:
assets: 32 015 159 from which ONLY 3 735 021 is in actual cash.
Contingent liabilities: 96 990 148


This clearly shows that MA is using deposit money and Konve's example is true because its not markup that's higher than MA ability to pay out its TT value that is much higher. If there is a run on MA (like a run on a bank to take out money), MA WILL go bankrupt and most people will lose everything. IT's that simple. I wouldn't be suprised to see withdraw times to increase even more tbh..
 
what if TT that item and wants to withdraw?
Ahh, u mean what if there's a run-on on the bank?
I know the answer! If there's a run-on on the bank then there's a run-on on the bank.

When the sky falls, it falls. Maybe it falls tomorrow and we should be terribly worried but after reading all these doomsday prophets for years I've become kinda immune. Yea yea, it falls, constantly. Can we move on now?
 
Your purchasing a digital currency which is pegged at 10-1 on the dollar and has no collateral to back it up(mindark controls this currency but are not liable to it). While with bytecoin supply and demand allows the value to go up or down with ped it doesn't because its fixed to the dollar. So mindark (central bank) controls the flow through a number of methods. As soon as you hit deposit and it says committed you dont own that currency. Its same as for instance on a 5 pound note it says i promise to pay the bearer 5 pounds. You physically dont actually own that currency as you have no control over it (a central bank does).

So mindark as soon as you deposit can use those funds however they see fit to keep the current flow + expenses on an equal basis. This will be tied into the loot system as well(which means less or more hofs ubers depending on the flow). Weather its sitting on your ped card or not you purchased a digit currency you have no control over until its actually physically converted to your bank account. They will have contingency funds for people who have ped on their ped card as potential withdrawels but its quite simple really.

Its the same as banks as soon as you make a deposit you dont own the money they do and they promise to pay you back when you request it.
 
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Ahh, u mean what if there's a run-on on the bank?
I know the answer! If there's a run-on on the bank then there's a run-on on the bank.

When the sky falls, it falls. Maybe it falls tomorrow and we should be terribly worried but after reading all these doomsday prophets for years I've become kinda immune. Yea yea, it falls, constantly. Can we move on now?

True, sky has not fallen for EU. And I'm not saying sky will fall. If the times are stable everything is more or less stable but it can change.

This discussion is more about knowing the facts - people should be aware of the risks and the actual situation. I bet there a lot of people out there thinking that their PEDs are 100% backed by funds in MA bank accounts and are guaranteed like a RL bank deposit in Europe for up to 100k (I think its all the same in Europe, or was just Euro zone?). If latter was the case there wouldn't be any worries even with a serious RL financial crisis. And also it highlights that the gap is widening and less and less PEDs ar actually covered. This discussion ties closely to the questions people always ask - why deposits are instant (or few days for bank transfers) and withdraws take 2 months or more?
 
Arggh. OK, let's go back to the basics:

I know all ppl love to have all their fancy theories about stuff (and your take on it isn't any different) but there it is, an official statement black on white.

Do u know what contingent liability means?

Do say something is backed up means that u most have a dedicated reserve for it. Mindark doesnt have that.



That's how the RCE really works. Very clever system. :yup:

hehe like RCE was a comming thing? And EU is not a casheconomy. Its a game with is own currency.


Is there are differens between go to a store and buy a giftcertificate and walk around in the store spend it or - Buy PEDs from Mindark and walk around in game and spent it?
 
hehe like RCE was a comming thing? And EU is not a casheconomy.

Is there are differens between go to a store and buy a giftcertificate and walk around in the store spend it or - Buy PEDs from Mindark and walk around in game and spent it?
Ever visited another country that uses a different currency?

Then again, if somebody wants to believe EU is not RCE, I have no problem with that...
Now go away troll.
 
Quote Originally Posted by Ace Flyster View Post

MA don't charge anything for transfere, as far as i am aware. All costs are associated with each bank and or credit card. NOT from MA. So if everyone deposited then instantly withdrew. The only money MA would make is from interest while the deposits sit in their bank account.

Rgds



Ace

Quote Originally Posted by sighlentz View Post



Not true. I have credit card from bank with "NO" foreign transactions fees and MA still takes their 40 ped for every $100 USD deposited




And it's never occurred to you that businesses pay 'merchant fees' for receiving credit card payments? :scratch2:

Just because your card company doesn't charge you for the transaction at your end, doesn't mean that someone else isn't paying fees somewhere down the line.

It astounds me sometimes how little some people seem to know about everyday business operating costs like this.

I was commenting on the statement "All costs are associated with each bank and or credit card. NOT from MA." I am aware of the nuances of merchant services. It astounds me how some ppl jump to conclusions and make derogatory comments about others unprovoked.

While were at it, the majority, like 99% of merchants/businesses absorb the cost of merchant fees and do not pass them onto customers at the point of sale. When I buy an item for $100 and use a CC, my cost to purchase is $100 plus the sales tax amount if any, merchant fees for the CC transaction is not added to my total bill. MA on the other hand chooses to pass those fees on to it customers at the rate of 4% (40ped / 1000ped), which IMO is higher than the 1.5% - 2.5% most accounts are charged for merchant transaction services depending on volume. So.... it can be argued that MA does indeed pass along their cost of doing business to it's customers at the point of sale
 
No, this is not how it works. That would be a ponzi scheme and illegal in most countries. If I ever found out it changed to bring like that, which I'm certain it isn't for the examples outlined by elite, I would pack up right now. Rest assured, if it were like this, the SEC would have already seized and/or stopped transactions from the US.

Hyips, as they are called, do not and have not ever had the lifespan EU has and is never audited by a legitimate source.

For mindark to make money, they must have turnover. That makes the game a sustainable apparatus. They don't get to spend your deposits. Your peds must be turned over or withdrawn.

Actually, it is exactly like that. This is why you agree to have no ownership of anything inside the system, every time you log on. Didn't you read the EULA?

Now read up on what a contingent liabilty is.

You are deadwrong.... Mindark use every dollar that is bought peds for (deposit as they say) to cover cost and profit. So you better run in that case

This. (!)

Arggh. OK, let's go back to the basics:

I know all ppl love to have all their fancy theories about stuff (and your take on it isn't any different) but there it is, an official statement black on white.



This "story" is almost right, all except your "little invention" with the hamsters and MA having zero money on their bank account. When I look at their financial statements I can see no grounds for that claim. Regardless of how much is or isn't covered with IRL funds at any given moment, the principle does not change. Hamsters or no hamsters, it doesn't matter.

So let's try this again.

There's 2 kinds of assets inside game:
  1. unconsumed resources with fixed TT value (liquid PEDs and resources that can be liquidated instantly using TT terminal), and
  2. items/investments/resources with bulk of their value in markup.

The 1st kind is covered with the liability statement above.

The 2nd kind is self-balanced by the basic mechanics of the RCE. Which means, using your example, the avatar who has an item worth 100 ped ($10) is not a concern for MA at all. If we take all liquid PED out of the picture, before he can sell it and withdraw someone else has to deposit $10 (100 ped) first and buy it. After this he can withdraw his $10 and MA uses the $10 the other guy just deposited to finance the withdrawal. A true zero sum game that automatically balances itself.

That's how the RCE really works. Very clever system. :yup:

Hamsters are real man. We have believed in them since day one and that idea has not failed us yet. I simply will not change my mind about this just because you can find no hamster traces in the financial reports. :wise:
 
Ever visited another country that uses a different currency?

Then again, if somebody wants to believe EU is not RCE, I have no problem with that...
Now go away troll.

Sure, never heard any of them tell that they have the national curreny and also a real cash economy with another curreny:)

You clearly know im right! Haha
 
Afaik calypso and Entropia universe are seperate entities. So no reason for their accounting to be linked. Calypso handle clds so it is their gross revenue that pays out not mindarks. Which also tells us that withdrawals have 0 effect on any pay outs.
 
i own a shop in real life and i dont have any credit card machine or debit cards why i have to pay the fee why would i give the credit card machine that i going to used for my customer and loose 1.5 to 2 percent

that what ma is charging for them to accept your credit card it cost them money so there going to give you back 100% if you with draw not possible

same transfering money to a different currency say now the canadian dollar is 65% of the us dollar

i will pay 67% for one dollar us to buy and if i sell it they only give me 63%

nothing is free in the world

and for the 2 month wait its for fraud just in case the amo from the merry mayham had give lots of free amo more than they lost they can stop it from going out of the game that one exmaple also the free LV13 amp poeple were using a few year ago

that my 2 cent
 
Sure, never heard any of them tell that they have the national curreny and also a real cash economy with another curreny:)

...
You have no idea what you are talking about, do you?
In my country (Denmark) - We have our own currency, which is tied at a fixed rate to the Euro.

You need to get out more and troll less.
 
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