Gaia is a community with many game like qualities, including a virtual economy where all Gaians get to earn gold for participating in activities. Our goal is to encourage all Gaians to participate in the community, and be rewarded while doing so.
Although this idea has an inherent problem, where unlike a real economy where money is earned form other businesses or individuals, on Gaia, most money is earned directly from the system, which adds more currency to the economy everyday. This increase of currency in the economy causes inflation year after year. On top of that, starting 2014 there were items named Gold Generators which grated a huge sum of gold into the economy, causing a massive surge on inflation. All Gaians who have been with us will know these aspects far too well.
- The Problem
With inflation at such a high rate, it became harder and harder to earn the amount of gold it takes to buy items off the marketplace. Earning gold on Gaia to afford items in the marketplace became more of a remote challenge than a goal.
- The New Gold Granting System
Our most important goal at Gaia is to restore the ability for all Gaians to be able to afford items in the marketplace. To do that, we will need to re-write all the ways which gold are granted throughout Gaia.
The new system starts with algorithms to monitor marketplace prices, and determine what is a fair amount of gold required to purchase items in the marketplace. Then having the amount of gold as a target, we can adjust gold granting across all features on Gaia to meet that goal. Essentially, gold granting from this point forward will self adjust according to marketplace prices to ensure that all Gaians can afford to buy items by earning gold through whatever features they please. Whether it’s posting in forums, voting in arenas, or playing games, getting a fair gold reward should be part of the fun.
- The New Currency Setting
While marketplace items begin to become affordable, the current gold currency is hyper inflated, and counting so many zeros is a chore. Gaia will have a new currency setting to deal with this issue. At anytime, Gaians can switch back and forth between Gold, and the new currency. This way no one will lose any currency, and still be able to benefit from having a smaller, more friendly currency moving forward.
Lastly, the gold granting system will be tied to the new currency, so be sure to switch to the new currency to take advantage of bigger and better gold granting when the feature is released.
We have yet to name the new currency, and we welcome any suggestions! Please let us know what you think of the system, and what you would like the new currency to be!
May 08 FAQEdit
- Will there be 3 currencies now?
Yes and no, there will be a third currency, but at any one time, your Gaia experience will only have one "free" currency that's granted by Gaia, and GCash as the second currency.
- What will be the exchange rate of the new currency?
Probably about 10,000,000 to 1, but we haven't decided yet. Any feedback is welcome!
- Is there a cost to swtiching?
No. But there are big incentives for using the new gold granting system, which is tied to the new currency.
- How do you switch between new and old currency?
There will be an account setting to switch between the two. You can switch back and forth anytime.
- Wouldn't granting more gold just cause more inflation?
The new currency with its exchange rate is here to control inflation. Every few years, we can adjust the exchange rate to further tackle inflation. After the gold granting system, the inflation won't be too different than 10 years ago where gold grant rate were much more in-line with marketplace prices. Without things like gold generators, inflation *rate* would be at bay.
- Why don't you just put a cap on marketplace prices so people can afford items?
The idea of putting a cap on sell price is called "price control", which had been practiced since ancient times. In most cases, however, the effort does not yield positive results. 76% of economists are against price control, and I tend to agree with the majority. The potential consequence of such a system will make most Gaians seek trading as the means to sell items, and still won't touch the underlying currency problem. source 1source 2source 3
The free market has many factors that drive the price of items, the gold granting system will be the factor which ensure that items remain obtainable.
- Will gold shop prices be affected?
Yes. Prices will reflect what the art team initially wish for the item to "cost". If the intent was for the item to cost two days worth of work, then the price will reflect that.
- How do we convert prices back and forth in the marketplace and trading?
Prices will always be set to whatever your setting is. You never need to convert amounts for anybody else.
- When will this happen?
Middle of June at the earliest. It's a big project and there are many factors to consider as we move forward.
- Will this whole thing be the end of Gaia?
The entire system can be switched on or off at anytime. When the system is off, it would be no different than how things are right now. No account would lose any currency or items in the process. We will monitor the economy and make adjustments to ensure that things are working as designed.
- Thread Gaia Economy Project - Lanzer Mon May 08, 2017 4:44 pm