How Earth2 Played Themselves

Many of you are probably familiar with the Earth2 Bazaar, the one stop station for selling jewels, holobuildings, along with civillians and cydroids. This is one of the best things in Earth2, as it is extremely well designed, and looks awesome (unlike its cousin, the marketplace.) But unnoticed to most people, there is actually a hilarious story of how Earth2 lost thousands of dollars all because they forgot what they learned in Economics 101.

A typical jewel on the market

Part 1: Market Conditions

As is common with many trading sites across the web, Earth2 charges a small fee on sales in both the marketplace and bazaar. For jewels, this fee is '5% of the median sale sale price for that jewel over the last 6 months' or in layman's terms; 5% of market value. This probably bugs many people, but Earth2 needs this to compensate for the cost of maintaining the bazaar.

Another thing that is common about the jewel bazaar is the liquidity of the market. As a rule of thumb, the lower the tier, the mote liquid the market. More T1 jewels are sold per day than T3. Therefore, where Earth2 likely makes the most profit is in the T1 jewel market. If you sell jewels on the T1 market, you will sell quickly, making it one of the most profitable ways to make money in this game.

Part 2: Supply and Demand

Now this begs the begs the question: where do you get jewels? The answer is simple: they materialize out of thin air! There is a market cap of 150,000,000 billion T1 jewels ever owned, but this cap is unlikely to be reached in the near future, as less than half of these jewels have even been created. Anybody who has studied Economics will know this is a recipe for disaster. Infinite supply and limited demand made the jewel price plummet. As jewels become more common, so people lowered their jewel prices to make more profit, ending in this downward spiral. When I first started Earth2, the Jewel price was roughly 14 cents. Only a year or two later, and it's at 5 cents!

Part 3: Down the Drain...

The jewel prices are low now. 'So what?' You may ask. How does this effect Earth2? Well, in order to tax people, Earth2 needs to be able to tax at least 1 cent. And what is 5% of 5 cents? In case you didn't notice, you are not able to split a penny into fourths. Therefore, due to blatant stupidity, thousands of dollars were lost. Along with this, other markets such as the T2 and T3 market (where they still can charge a fee) prices plummet, deepening the wound.

This story may seem trivial, but it holds one of the most vital lessons you can learn in economics: Infinite supply equals minimal prices. It's just funny how a business centered around money could let this slip under their fingers.

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