SIM down again - but now I am president (again)!

in LeoFinancelast month (edited)

What's a president to do?

Its been just under a year since I was last president of DCITY, and lots of things have changed. I want to first comment on the price of SIM - after writing several posts about buying SIM, SIM is now even lower. I will keep my mouth shut for a while, if you set your sell at 0.003 like I told you, you probably sold your SIM, but if you are still holding the bag (like me), it could be a long ride from here.

Current Political Climate

Taxes are high, this is mostly because prices are low. As president supposedly I control taxes, but right now my options are for taxes between 81.5% and 132%. This is a tough range to play in, it doesn't give me a lot of options, but there is still a button or two to push.

There was some expectation that SIM would rise after 3rd edition, which it did..... for a few days. Then it seemed to head back down to where it began, and continue lower, as the top SIM holder started to sell. There are a few big players in this game, and if they want out, the price is going to go down no matter what we do, this is assured.

And maybe they are right! It might be time to allow some players to cash out their chips and take their results home with them.

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Break the game

Just for a bit, I have decided to break the game. That means that taxes will start off at 122%, too high to really do anything about. I will then move them down and experiment with a 'marginal tax rate', where the benefits from Mining Technologies, DeFi Tech and Law Firm will be extremely important between 0 and something. And remember, when we get zero income, players HIVE rewards are reduced by 70%.

I expect there to be further capitulation. And maybe the game and its players need it. I would rather not 'wait it out', but let the players sell what they have and give them nearly no competition in the market. This defi 'gaming' experiment just needs to give the money printers a short rest while players make their choices. The price of SIM and cards could in fact go down depending on how players interpret this play over the next days, but I believe that we will return with not only more joy but also a healthier attitude about all that DCITY is and has been in our lives.

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No you cannot lose money, even though it turns negative. Remember that we are still mining TECH cards, Prevention cards, Background cards and Citizen cards, and the cost of disasters is null since we aren't getting any SIM anyway. So its not all bad.

Fix the Game?

Personally I think that the idea of taxes might give players the wrong idea about the mechanics of the DCITY defi farming platform. In life, when I add value, the government takes part of my income, someone might say - 'taxes are theft'. But in dcity, since the game algorithmically prints inflation each day based on certain rules, I don't believe taxes represent the same theft, but instead a flow control valve for the inflation printing. I don't know if there is enough words to change this perception in people's heads, but we can try.

The game will be undergoing a governance change within approximately 1 month. Additionally lobbying options will be added that will rank cities by additional stats, allowing the reward pool to be distributed slower and wider, and perhaps 'fairer', among all players. There will also be an overall reduction in the amount of rewards shared each day, based on how much lobbying we do for the reward pool. At that time, holding SIM power will be even more important for determining who gets paid.

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Currently, the president (me!) has just crude control of a few taxes. But through the luxury tax and insane tax rate, I can cut everyone's rewards by 70%. A temporary restriction of the reward pool is, although hamfisted, probably a fine thing in the long run, the only downside of this method is that it actually benefits the zero income cities on a relative basis, as I cannot further increase their penalties.

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I think Jelly makes a great observation here, and its one that I think is worth commenting again, I will be heading down to a more marginal tax rate soon where we can continue to 'play' the game with well balanced cities.

What am I waiting for?

In a word: Capitulation. I want to see what happens, and as always I will be monitoring a few lists. Let's start with the SIM holders list, which has changed mightily since the last post:

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@gerber + @dcitycub, which is an account that buys SIM with the profits from CUB defi, hosting some of our precious reward pool, is now the largest holder! I assume @gerber buys SIM with his own funds, in a way reinvesting his 'dev share' back into the game, he can correct me if I am wrong. But the two accounts now total more than 5.1 million, so there is some buyback program going on.

Also let's not forget that the market is actually a large holder of SIM right now:

There is ~7.5 million SIM on the market for 0.00152 or less, over 9000 HIVEs worth. Much of this is held by @dcityfund after it bought SIM slightly lower. I love @dcityfund because it makes like 3% each round that we move back and forth over the price.

Even just down at 0.00117, we have a lot of work to do to ever move the price again, let's see what happens over the next couple days.

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The game happens on the market, that's because its a #defifarming platform, with some gaming characteristics. I am open at all hours to receive your comments about this policy on this post, or in the DCity Discord.

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If peoplelooked at the Sim price in terms of USD, it's probably close to peak. Hive was at 11cents a couple of months ago when SIM was at 0.004, Need to look at the overall pic and not just our little universe . Good luck with the Presidency :-)

Posted Using LeoFinance Beta

This is a good point! It could be valuable to cross compare the SIM price in HIVE to the HIVE price in USD!

I think it is like 50% down from the peak - I am not referring to fat-finger-peaks, but when Hive danced around 70c, the SIM was already down but still not as low as today.
Just nitpicking as I am in the camp that likes to point out how good the SIMUSD has run on monthly scale even when down over the last days/weeks.

Here's my opinion:

I enjoy the game, and I think the overall development is going in a really good direction. I am also not planning by any means to exit it any time soon.

But that being said, there need to be more knobs and handles in terms of governance because there is an edge case that is currently a problem.

When SIM is close to its peg, of course all is well. When SIM is low, and Hive is low it's also okay because the game delivers little, but it's also cheap to step in.

But the regime we're now in is one with relatively high Hive price and relatively low SIM price. At the moment, the players do earn a few SIMs at least, but what will happen if Hive moons to $2 or more?

When we look at the SIM price in the last 6 months, it has hovered around $0.0006 most of the time. Sometimes it was $0.0004 and occasionally it bumped up beyond the $0.001 mark, but not often.

Now if Hive moons to $2, and SIM is at $0.0005, then essentially the SIM price will drop to 0.00025 Hive. In this regime the following happens:

  1. The president loses control over the tax, as the lower bound is well above 100%.
  2. Nobody is earning SIM anymore (I believe?)
  3. Cards are still not cheap, and the incentive to buy is largely gone because the cards are not earning SIM.

It is this edge case that I am really worried about actually. How do we solve it? Here are my ideas:

  1. Give the president powers to nudge down (or up) the desired SIM peg, which then rescales the Hive prices for cards too.
  2. Create more sinks for SIM, e.g. by selling more cards that give non-SIM benefits.
  3. Ditch the Hive peg, and replace it with a HBD or BUSD peg.

I don't know if any of these ideas are any good, but I do think this problem is large, that it is likely to affect us all soon, and that it does need to be solved rather urgently.

Posted Using LeoFinance Beta

I appreciate the thought put into this comment!

One thing that we will get in about a month is the new lobbying options. Not only will the ranking rewards be based on different metrics, solving the unfair 'luxury tax' problem I mentioned in this post, but there will also be an option to lobby to reduce the INCOME TAX!

Its also not necessarily the case that 0.00025 sim price means no SIM, it just means a ~95% INCOME tax, further reducing the presidents power to do something other than 'nothing'. Remember that you need ~112% taxes to reduce everyone to zero, as law firm, BTC mining tech and DeFi tech boosts the earnings of the players who use these cards.

Ah, I thought Gerber mentioned that the 100% income tax threshold was at a value of 0.0001 Hive, and that it goes beyond that if the price goes even lower.

But I may well have recollected that wrongly!

In fact.. I'm asking gerber on Discord about this right now, just to clear up my own confusion ;).

Edit: And Gerber answered... the 100% point is indeed at 0. So my original post is a bit wrong I guess! I'm sorry for wasting everyone's time with that.

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But the regime we're now in is one with relatively high Hive price and relatively low SIM price. At the moment, the players do earn a few SIMs at least, but what will happen if Hive moons to $2 or more?

If the relatively high Hive Monns even higher, you have been plain out cheated.
If you pick one (too high/too low), we can have a meaningful discussion.

Kinda tough times in the DCity economy... at the end of the day, this is a DeFi-ish experiment that depends on so many factors, especially the choice of bigger holders.

Any economic system will eventually face heavy, repeated capitulation — only by that test can we determine whether or not the overall framework is robust enough to weather the storm and bounce back.

Let's see what happens.

I think it's funnier to see everyone suffer more interesting to see how people will try to skirt around these challenges. Maybe they will quit altogether?

It's hard to imagine new players want to hop into this environment. Established players can at least have ways to play the game on multiple levels. A newbie would just be like, "so I have a city that doesn't really produce anything (since taxes), and I might need to drop 2000 HIVE (~$1000) to have meaningful voting power right now."

It's a hard sell. But, time will tell.

I see this perspective, and indeed some people appear to be quitting even before I put these taxes on.

Consider also that the TECH mining, citizen mining, prevention card mining and Background mining aspects of the game are all maxed out at extremely small city sizes, with the exception perhaps of prevention card mining. Very modest sized cities can be mining a daily citizen and rocking a 25% tech mining chance - creativity and art galleries are some of the cheapest cards in the game relatively speaking.

Check out this set up I wrote about recently, and it looks like it still is paying out ~50% non-compounded APR even with zero SIM income. 😅

Well, last I checked, the market for selling Techs isn't that robust.

And yeah, $300 does seem more affordable than trying to enjoy more aspect of the game.

Prevention card mining would be too expensive even for many established players. It remains to be seem if people would be bothered to use them at all since taxes are so high, any amount of "penalty" is simply just part of the package and not really felt.

Back to the main point, how many people on this chain can actually shell out that money? I'm not talking about folks like you and me. I'm talking about the other thousands whose Hive earnings are literally living wages where they are from.

Ah good point that I hadn't considered, prevention cards are worthless with this set up! All in all you make some good points, which confirm that I shouldn't leave the taxes here for too long because the incentives get a bit wonky.

I think the idea of 'small players' and 'new players' is probably worthy of more in depth analysis, it really depends on how creative you get, the focus on only SIM as the profits of the game limits the playable choices. I published this set up more than 8 months ago, which costs less than 9 hive to set up right now and mines me a citizen card in more than 95% of days:

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It's not about the facts, but the psychology.

A profit-driven/or determined person will find a way to make even that 9 HIVE investment stretch.

A hobbyist, on the other hand, will just turn elsewhere.

So this policy is aimed at shaking up the hands already in play since attracting new players is already kind of screwed due to high taxes?

Personally I think this is just a good 2 weeks to ignore dCity now. No draw or reason to check daily anymore now. It's just going to be a static NO REWARDS.

yes, there are no rewards except war shares payouts, tech mining, citizen mining, job training, criminal formation, prevention card mining, background card mining and 30% of hive ranking rewards, so you should just ignore it!

I have some ideas for new players, for example I wrote this post which will be useful for anyone new to hive whenever they get here. This policy is not aimed at attracting new players directly, that part of your comment is correct, but if a new player did want to start I would recommend to them that they keep an eye on the market during the upcoming capitulation phase I mentioned in the post.

Yeah, I'm just going to ignore dCity whenever you are president from now on.

Cause let's be honest, if you could stop us from getting those rewards as well, you would.

Okay, that's a link on how to make an account. But now that you've had several people tell you that this has been the breaking point for some new users, what is your real plan to get new players into the game? You're basically the #1 player of dCity (not counting boss baby because he's an owner) so you stand with the most risk to be "the man holding the bags" if this goes tits up. You, more than any other player rely on new blood in this game to turn a profit, correct?

I could be the somewhere between the 4th and the 8th top player in DCity, its a little hard to measure, but your point is well made, and I in fact am doing what I can to stir discourse, protect the reward pool, change perceptions and consolidate our investment!

Sad day today with limited popularity rewards and no SIM... but alas, it's not so shocking the SECOND time. I hope at least to earn some TECH at least... and war profits to look forward to.

Let's make SIM 0.002 again!

dCity will only function with some sort of buying, whether trading HIVE for cards, or HIVE for SIM for cards... either way, the game thrives on HIVE going into the game. The challenge is to find what could possibly compel a person to invest their HIVE into dCity? I think you are right about ROI, that's what got many of us excited about dCity!

Posted via neoxian.city | The City of Neoxian

I wrote a post about the problem dCity has concerning discrimination against holograms in early January and ended the post about starting a secret society. Since then the price of SIM has been dropping. Remember reading about FBI Director J. Edgar Hoover saying, “There is no Mafia.”? Yeah, keep telling yourself things aren't happening in the background.😎

I just plan on HODLing and hoping I get more citizens. I don't think I'll have much luck with the taxes but thanks for the heads up. At least I know what to expect and the tax controls seem fairly limited. I guess I'll just wait things out and see how things proceed in the future as I have no plan on selling right now. Though I am debating about trying to flip some SIM on the market to slowly grow my stash.

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I appreciate your explanation of what is happening, the options you have to choose from, and why you chose what you did. Communication goes a long way toward understanding and reducing stress.

This clarifies a lot. Decent write up. I can now see that you're not just an insane/ trolling president trying to make fun of us 'small(er) peepz ;<)

In all honesty, after reading this, I am tempted to buy more SIM. I did not see that one coming as, up till now, I was merely focused on getting back my ROI ( after two months of heavy investing when I first started out, half a year ago ).

It seems like the 3rd edition and my temporary confusion after having lost track of this game ( I'm no longer up to date / on top of things ), combined with you for president and these 'crazy' taxes have changed my investment strategy.

You got me interested in DCity once again.

Kudos for that and I'm curious to see how things will turn from now on.

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Looking at it from AIDA perspective, both A's are satisfied greatly but I am not sure about either I or D.

Maybe too much Attention, I mean the supply implications of 100% tax vs 99% tax are much smaller than the psychological effect on players.

On the other hand anyone invested in the game can take as a wakeup-call and contribute with their own I/D efforts. It is easier to go mainstream bashing dumpers (pathetic and useless) than go constructive and help the game grow.

Thank you Jelly as always for a thoughtful and constructive comment!

I figured you were trying to break the game. And it is a nice way to reward people who've held on to first (and even some 2nd) edition cards.

However, I'm wondering about the impact it has on newer players who are joining in, measuring that they have 0 ROI and just quit immediately.

This is basically like any developing country where the rich get richer (they have money and power to make money and create more power), the poor get poorer, and outside investors don't view it as a good place to invest.

Just thinking out loud here.

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What is the point of the high taxes at all? Prevent inflation?
If so, the price paid to control inflation is way to high. At the end of the day it is about selling and buying (investing) SIM, and with these high taxes there is 0 incentive to invest. Simply as that. Therefore the price keeps dropping.
Please do an experiment and start with as low taxes as you can go, not at 100% (this we have seen a long time now).

No, to speed capitulation.
Also, to experiment with the rules on the margin. Already new church mechanics have been upgraded, tested and implemented.

Do you have a law firm? Its 97.6% taxes right now, and has been marginal for many days of my term. We are still tech mining, and there is hope to elect a new president in 7 days who will lower taxes even further, maybe even as low as 81% with a law firm/90% without.

People will have to hold SIM and learn and understand the rules of the game, or sell their tokens.

Thank you @ecoinstant, for using the CO2 Compensation Coin (COCO / SWAP.COCO) on Steem-Engine or on Hive-Engine to reduce your CO2 footprint. You want to join? Buy some COCO / SWAP.COCO and transfer them to CO2Fund's account @co2fund.

I was interested to see if 100% taxes would break the game. This little stretch of 100% tax has made me reevaluate how I'm going to play the game moving forward. I won't be quitting anytime soon but I will be spending a little less effort on trying to maximize my returns.

Upvoted to thank you @ecoinstant for supporting the CO2Fund by, e.g., supporting posts, banner presentation, SP/HP delegation, dustsweeper gifts, helpful tools, etc.

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Maybe the peg should be relaxed or even removed or solely decided by the president, this would decrease the SIM price in the short term but would make the game more playable and attractive for new users again. Income of 0 makes buying cards also meaningless. Additionally the peg does not consider HIVE/USD price development like pointed out by others. I am sure we can find a solution or at least experiment, maybe SIM needs more sinks and also incentives to stake more SIM, similar like DeFi apps.