Economies of Scale and How It May Affect Your Results

I wanted to give all of you a new way of looking at your pedrolls...

In a casino, slot machines with higher denominations have a higher payout %. The reason is, even if you keep 10% of a penny it takes a lot of pennies for the casino to make anything. 10% of nothing is still nothing. However... When you have quarters or dollars, the casino can still make lots of money by taking a smaller percentage. The greater the amounts cycled the better returns they can afford to pay.

However, entropia is not a casino... BUT...

The official loss rate is claimed to be around 10 peds per hour of gameplay... Considering a 100 ped deposit might last me 10 hours if I am actively playing the whole time, sometimes a great deal longer or a great deal less, let's just suppose that this is the viable amount. And since no one is guaranteed a global or a hof, and near as I can tell they are randomly distributed and based on your ped turnover in some complicated algorithm... I mean, a person turning a small amount of peds tends to hit smaller hofs and globals than someone turning larger numbers of peds... I would say whatever and however MA decides what % is theirs, the returns are probably all figured out without taking into account hofs and globals.

The premise we are working with is, any time you complain about loot MA replies and says that returns are a %.... A % of what they won't tell you... A % of deposits? Then why do non depositors do pretty good? So it can't be that. A % of ped turnover would be more logical... But lets not hang up on this issue. Regardless we know MA is not in the business to run a loss and they have to make their money somehow, this necessitates it being a negative expectation game, but in how it takes and distributes is from our end, random redistribution of wealth, which I believe strongly is highly based on skill sets and play style. It is possible for someone to know what they are doing to make long term profits over the long run. A person that doesn't know what they are doing will have a lower return.

In any case, whether or not you agree with what I've said so far... If you have 50,000 peds on your ped card, and you are doing 10 ped clicks at the crafting terminal, you can handle the extreme ups and downs without much worry. You will have a greater average return than someone putting in 100 peds at a time playing 50 pec per click crafts. I am of course talking TT values. If you can break even or profit in TT values then you most certainly will profit becuase of markup.

I know one person that ATH's as regularly as you and I global or hof. He has an INSANE ped turnover. Sure, losses are heavy for him some days, but other days his ped card goes up and up. For now I will keep his identity confidential, but he has requested my help in writing a guide which should be made available to everyone soon.

Let us suppose for a moment though that MA really does only average a 10 ped per hour take. For me, playing with a couple hundred peds at a time, it is an extreme % cost. But for someone with 10K peds or up, it is almost nothing.. The problem is the higher the cost of what you are doing the more volatile it can be and the more severe the ups and downs and if you don't have enough peds to survive the down swing, you will have to wait til another session before you might hit something that will rebalance you out.

Officially the system does not remember what you have done previously in terms of having looted big or no loot at all... But... Despite this, there does seem to be a mechanism in place that makes sure when you do hit a big one that it is big enough to recover most of your losses.

The whole point of this post though is not to get into the algorithms of loot, but to point out the more peds you deposit and the bigger you play, the better your returns will be. With a small pedroll it is very easy to be wiped out without even seen a global or a mini.

ADVICE: Do Not Underestimate Land Deed ROI

I want to give you this piece of advice as a christmas present in that you may understand it and take it to heart. I just had an epiphany of thoughts, and I know a lot of you see the returns offered by the Land Deed dividends as paltry. But let me shine some light on this for you.

Let's compare the ROI on a Land Deed to say, a savings account interest, or perhaps a Certificate of Deposit:

Savings accounts with your local bank only offer maybe .25% to 1% Interest PER YEAR. So, on $100, you MIGHT get as much as $1. That's 10 peds per year per hundred dollars in your savings.

CD's might offer 2% or 4%... So you are talking $2 to $4 per hundred per year. 20 to 40 peds per year that way.

Calypso land deeds are paying out between 5 and 6 peds a week!!!! Do you know how significant this is?! That's 50 cents to 60 cents a week!!! You are getting a years worth of bank interest in about 2 weeks time or less on that same $100! Say you are getting 250 peds a year, you are talking 25% yield per year. THERE IS NO CD IN THE WORLD RIGHT NOW THAT I AM AWARE OF THAT YOU CAN MAKE MORE THAN 5% ON.

Robert G Allen wrote in his book multiple streams of income, that just saving $1 a day, and earning 5% per year interest will make you a multi millionaire within 20 years by compounding interest. Of course, the only way your ROI will compound is if you use the dividends to buy more shares... BUT imagine what you can do with 25% interest!!!

Of course, the playership should grow over time, every product and service has it's critical mass at which things go crazy at. When that happens, I will bet dollars to beans that you will see the ROI go far beyond 25% per year.

No, I have no shares, and no vested interest in how well they do or what their price goes to. Oh yes, I would like to have some, but maybe some day... But here lies a tremendous opportunity to those of you who are quick enough and sharp enough not to squander it.

But even if the ROI drops to 5% for some reason... YOU ARE STILL WAY AHEAD OF WHAT BANKS ARE PAYING!

Mining Basics Part 4: Selling Your Ores

This seems like a logical fourth part to my recent series of posts outlining the basics for all the noobs who are coming into Entropia on a daily basis. I am seeing incredible amounts of new people every time I log in. It takes me weeks sometimes to run into another avatar I've seen before. Seriously!

If you look at the totals on Entropia Tracker, say my mining rank is like 700 out of 3000 or something... And you think wow... 3000 people is that all thats here? But then you realize... That's only people who have hoffed and globalled in the last 30 days that are counted. It took me 6 months to get my first global. Then it took another 6, and after that it dropped to 3, and then I started hitting some kind of a global at least once a month... Until now, where I have globalled virtually every day I've played. So just think of how many people there really are playing that are not counted in the globals and hofs.

Anywho... I am a bit off topic here, but that's ok. This is going to be short and quick.

Markup is crucial to your success in any profession. It is the difference between winning and losing. Mindark is not going to guarantee you will win on every run you do. However, what gives you the opportunity to is markup because markup is directly out of other peoples pockets unlike the TT value of items.

There are several things to consider.

1. Rarity and % markup.
2. How many peds worth of each resource you have.
3. Auction fees.
4. Trader prices.
5. Is it worth more refined or unrefined (This may sound dumb, but I will explain why it is valid)
6. Do I fill orders, or do I just list an auction with a buyout?


So lets start with number one...

If a resource is selling for less than 110%, you are generally going to have a hard time pushing it on the auction unless you know what you are doing, and it is going to take a fairly large stack of the stuff to make it worth doing. For instance...

Oil had orders at 104%. I thought ok, I will try refining my 80 ped oil global and sell it to orders. What I didn't expect was, my refiner broke at least two times, so that cost me 4 peds right there. Then there is a matter of the auction fee of nearly a ped or so. My markup was less than 5 peds. I literally didn't gain anything by doing this.

However, it has a lot to do with what is the value per unit. See, refining decay is based on how many units you are refining. It is costlier to refine Crude Oil than say, Angelic flakes or Dianthus... Ped for ped that is. It wasn't worth bothering to refine the oil and fill orders. But I could have 80 peds worth of say, Alicenies and refined it and sold it on an order of 104% and actually made a few pecs.

Depending on the markup it can be cheaper to actually TT the stuff. But on all items you think are TT food, at the very least talk to a trader to see if you can get ANY markup for.

BUT REMEMBER: If you take something like Dunkel... Assume 5K% markup. A trader MUST automatically deduct around 1500 points off that markup and offer you between 3500% and 4000%. Because even with 3500%, the auction fees would take all the profit and then some. And if you think it is easy to sell something so rare, especially when it's not refined, you can try it. If its extremely high markup and rare, so few people even use it that it would be a risk counting on the fact someone using it would actually see your listing and buy it... It's safer in my opinion to sell it as fast as you can as long as the offer is reasonable. Reasonable, in my book, is markup minus auction fees on rare items. On common ores and matters, the standard few percent discount is reasonable.

#2:  If you have 10 peds of lysterium thats worth say, 105%... You are only talking 50 pecs markup. You wont make money with orders. Potentially, you could list a 9.99 ped lot of Lysterium ingots (333) of them for say, 120% and they will sell becuase lots of crafters will pay a little extra for smaller quantities. But you risk also that you might not sell it and lose the auction fees. So you have two options: Hold your ore til you have about 50 to 100 peds worth, or find a trader. Small markups will make a difference, but only on large TT values.

#3: Auction fees are progressive. The more value the item has, and the higher the markup, the faster the increase in auction fee as you up the price. However something you should know is... The auction fee to list what, 200 peds of Cobalt is like 6 peds or something... But to sell say, 900 peds on auction the fee is only like 12 peds. So after a while, economies of scale kick in and the more you can list at once the cheaper it actually gets for you to list. If you were to list four lots of 200, you would be paying nearly 25 peds in fees, versus saving and filling that 900 ped order. The numbers are just approximations from memory, not accurate... But the principle is what I am trying to explain. It will always be CHEAPER to sell the biggest lot that you can sell at one time,

Fees are good though. Why? Because it prevents people from using the auction as a warehouse like so many online games tend to do. If there were no fees, people would simple list everything at astronomical prices and never have to worry about storage for their stuff again. It might not be a big deal now, but back in the day when there was no storage on the asteroid, it would have been considered a major exploit.

Also, it prevents people from flooding the markets or otherwise manipulating them by buying up all the cheaper listings and relisting at much higher prices. The fees force people to list at prices they reasonably expect will find buyers.

I do notice the more I spend in AH fees, the better quality of loot I get... But I have no concrete proof, only observation from my own situation. But just keep your eyes peeled to see if it's making any difference for you or not. There is a lot we may never know about the game.

4: The reason traders are justified in making profit is simple. Most people do not have more than a few peds in any given stack of ore or resources. If you mine with less than a couple hundred peds, you are going to have a varied inventory when you get done. You will be forced to either tt lots too small to put on auction, or find a trader.

Now, when a trader buys from you, he has to consider how the market is. Are prices heading upward, or downward. Is it in high demand or is it not being used much. Whats the current price.

See... The advantage of a trader is this: If you cant list the stuff you have yourself, you either have to wait til you have more, TT it, or sell to the trader. Would you rather have five piles each of 2 peds of 120% ores and trade terminal them, or go to a trader who would give you say 115% for the ores. It is your choice. You can either lose 2 peds in markup by TTing, or you can go to the trader and let him make a few pecs, and lose only half a ped.

In turn, the trader accumulates the ores til he has sufficient amounts to peddle on the auction house or direct to crafters.Traders however, if they are smart, will take a sufficient cut on the ores so that when they have amassed their piles, that they will still make some money after figuring in the fees and etc.

However, if you have piles of ingots worth over 20 peds, and markup is over say 115% or 120%, by all means sell them yourself, in most cases you will get more than a trader will offer. It's just reality. But the exception to this rule... If it is an Ore that doesn;t move fast... Cobalt is very tempermental. If I list it as the lowest auction buyout, someone always undercuts me. But orders are sometimes 10 points below the lowest auction price. The solution? See what a trader will offer you. If Cobalt is 120% on orders and buyouts are no lower than 130, rather than risk being undercut, you might get a trader to give you 125%.

#5: Yes, I have to cover this... Becuase there are separate categories for unrefined and refined ores and enmatters, differences in the market value arise. In the case of chalmon/devils tail... I once sold 20 peds or so TT value, to orders for 560%. I went and checked the devils tail orders... Devil's tail was ordered at 620%. I would have made more money selling it unrefined. So when you have VERY high markup stuff... ALWAYS check the refined and unrefined orders BEFORE you refine it... You can always refine it later, but you can NOT unrefine an ore!

#6; Filling orders vs. Selling on Auction...

Scenario 1: Your ore's lowest buyout is at 120%. The orders are paying 119%. It is best to fill the order. Because even if you do list for say 123%, it might not sell, and for the 4 points difference, i'd rather have my money now. Also a gap like that generally means the price is going to be dropping so is best to be done with it than stuck with an overmarked up listing.

Scenario 2: Orders are at 120%, but lowest buyout is 130%. This is what I have experienced with Cobalt on a somewhat regular basis. Because the cobalt is virtually impossible to move without filling orders for me, I would opt to take it to a trader or fill the orders. Any other ore though, I would just do a listing at slightly under the lowest buyout if I needed the peds right now. If I wasn't in a hurry, I would find the lowest price listing around the size lot I had, and list just a little bit below that. People are going to always pay a little higher markup for smaller lots of resources.

Scenario 3: Make note of what the lowest auction buyout is, and then ask a trader, if there are no orders. If the trader offers you an amount somewhat close to that figure, do the math and see how much of a difference it is and if it is acceptable, take the trade. Otherwise, see Scenario 2.

I hope this helps clarify some situations and help you understand some of the dynamics at work in the market place. I will go through and clarify and rewrite this over time... Maybe add better examples and make it simpler to understand... But in the mean time, good luck!

Speculation on Entropia Universe Returns

Fact: MindArk's standard response regarding any payback issue or loot streak issues says that total returns are based on a PERCENTAGE.

So, since this is an important question everyone tends to ask at some point, I thought I would offer my own opinion as to the subject.

First, every indication is that the system does NOT pay out more Peds than it takes in. The system is obviously sustainable, and no company in their right mind would put that at risk. Many real life friends have obtained their payouts without problem other than waiting several weeks to several months for it to finally arrive. However, I do want to point out some people that haven't been paid have likely given Mindark a reason not to pay them such as violation of terms and conditions. There HAVE been exploits. There may still be some exploits. But the thing of it is... Exploits destroy the value that makes this game worth playing. It is a theft against each and every one of us that play.

Second, I believe the percentage paid out is based on the total spent into the system. Most of what everyone puts in, comes out somewhere along the line. The main edge they would have would be in keeping a portion of the repairs and decay, as well as auction fees, but who knows what percentage of each bomb or gunshot goes to MA directly. However, granted that even an absolute noob can tower on their first day unamped, which has happened, not often though, indicates that you do not have to pay in more than you loot.

But what I feel takes place is this: Every ped and pec spent is tracked. Every transaction you make. Loots are only figured in TT returns. But the higher markup items you use, the higher markup your loot tends to be, such as finding Rugaritz or Dunkel with the VRX2000 finder. But the thing is, the percentage kept by MA is easily compensated for by markup. Markup is extra value which derives from supply and demand. There is a limited amount of money fighting for a limited amount of resources and items. Markup is essentially what has come out of other people's pockets. But it ensures that everyone stands a good chance at either break even or profit.

IF you had to rely only on TT returns, you notice quickly that you almost NEVER run a surplus. You might have 1 in 10 mining runs that give you more in TT value than you spent. However, 7 of those 10 runs may bring you profit with markup.

I also want to stress that skills do affect returns as well. As a level 1 or level 5 prospector, I almost exclusively mined lysterium, oil, belkar, blausariam... As I ranked up, I gradually seen shifts from the low value ores to higher value ores such as narcanisum and niksarium, and later, kanerium became a regular find. Also, I have noticed as my skills go up, the frequencies, and average sizes of my hofs and globals have gone up.

I am not saying you can't hit good ores with low skills. I'm just saying you are going to hit fewer than if you had more skill. At level 28 prospector, I almost never hit Lysterium, and only occasionally hit Belkar and Blausariam.

So while they are paying out a percentage of what they take in, I wholly believe they use skills to control the distribution of that percentage. Certain finders are better at finding certain ores. But it takes certain skills to use certain finders. But also, another variable comes into play. It does matter where you are. You can mine all you want on those islands south of Port Atlantis and never hit anything but Lysterium and Oil. But... That's not to say you wont have ANY compensation for your troubles since you do still stand a chance of finding say, angel scales or hansidian, but TT value is low, and so your reward is simply dependent on what others are willing to pay for the stuff. But it works out, because chances are to use a 3K% markup ingredient to craft, the item it goes into is worth a great deal of markup as well, so the crafter can easily recoup his investment, and it is ultimately the final customer footing the bill for the materials that went into making the item.

There are a lot of complex principles at work here in Entropia... I hope I've been able to shine some light and open some minds as to this complexity. Think and play smarter, and more economical, and you will be rewarded as I have. But if you treat it like a casino, expect the same results. There are days no matter how much you spend you simply can't buy a global or a hof, I am proof of that. But if I play cautiously, and I am not expecting the big hits, they do happen! I certainly did not expect my XXI cobalt that I hit for 1322 peds, my largest loot in game and first four digit hof.

Good luck!!!

Yes, Mind Ark Really Does Payout!

Over the years I have heard a lot of people say that Mind Ark is under no obligation to honor your withdrawal requests, and that given the chance they will simply not pay out. However, if you live in certain countries, or your gameplay is questionable, that may be true. I am aware that there have been some people successfully exploiting Entropia Universe. Fortunately a lot of that was put to an end. But I will leave that for another post some day.

I know several friends, in real life even, that I have seen their bank statement proving that YES, MindArk DOES honor their withdrawal requests. But on another side note...  It took one of my friends 3 months to get his cashout. I largely suspect that the processing times will vary greatly and for unknown reasons. You can speculate MindArk is drawing interest off of your money before paying you out. Others suspect they pay off the top of future deposits. I don't believe either is very accurate to say, although what business is not leveraging every dollar they have so that they have more padding if they fall on hard times.

This is a very important topic I wanted to comment on because there is a lot of unconfident people out there and yes it would suck to trade for hours every day for years and then find out they won't give you a dime. But put your worries to rest. If you are doing anything that violates their terms and licensing agreements, then you shouldn't expect your withdrawals to be honored becuase you don't deserve them to be.

When someone exploits a bug or a glitch in the system, they are getting the rewards but not paying the price, thus taking away from everyone else that is spending and working hard trying to get what some people have managed to get through glitches. If you are aware of someone exploiting a bug or a glitch, please do the right thing and notify MindArk immediately, it protects the virtual real cash economy from being artificially drained leaving everyone broke.

As for scammers, do not lend stuff without taking collateral worth equal or greater than the item being lent UNLESS it is a friend in real life and you know where they live if they don't give you your stuff back :-) Use common sense people. No matter how pitiful the plea for borrowing an item is. There are maybe three people in the whole Entropia Universe that I would lend to without collateral.

But bottom line is, people are successfully cashing out thousands of dollars at a time without any problem other than long delays reported in getting their money. But if you get to where you are cashing out once a month, even if it takes three months to get your first one, when you stop cashing out you still have a few months of deposits coming :-)

So, have a good time, good luck, and go get your hofs!