Krone Implementation Plan
This document specifies how the Krone would be best implemented, along with how the Economy and it's systems should be managed. This will not include anything directly related to programming, but may include things related to how the system may be programmed or certain values to be used in the program.
Part I - Addressing Definitions- Sink: A way for currency to be removed from the economy and thus destroyed.
- Faucet: A way for currency to enter the economy.
- Destroy: To have a given amount of currency no longer be part of the economy, thus ceasing to exist. If an individual has that amount and can spend it, it is not destroyed.
- Bank: The Wintreath Website itself and the economy system.
- Currency: A monetary unit. In this case it is the Krone.
- Currency Neutral Activity: An Activity that does not increase or decrease the supply of Krones in the economy.
Part II - Sinks and Faucets In order to have a healthy economy, we need to have ways for the money to enter and leave the economy. In order for this we need to have sinks and faucets, and then have those sinks be meaningful while having the faucets be not too difficult to get. First let us address the easiest option, Faucets.
In my opinion, the best idea we could use is using the Gaia Online system, with some modifications. With the Gaia online system users earn Gold, their currency, as they browse, post, play games, vote in polls, participate in various events and contests, a battle system, along with random gold (or items) from a lottery-like system. In this system, we could use the posting, voting in forum polls, and events/contents. With the posting, we should remove its usage in the Spam area, as opposed to Gaia Online. Further, it should be noted, that in Gaia online posting has a diminishing return effect, where the more posts you make over a period of a day, the less money you make, with certain amounts being added back on to the amount of money you make for a longer period in between posts. This also somewhat applies to voting in polls, except it goes down each time. Events/Contests would be done later, ideally a few months after the introduction and management of the Krone. Further, posting should get more value than voting due to the fact that posting requires someone to actually respond and think.
Now, in order to curtail inflation, to prevent massive devaluation of the Krone, and to avoid hyperinflation measures must be made to remove the krone from the economy to act as a 'valve'. I propose that we, once again, borrow from Gaia online in a sense and introduce similar sinks. These are things such as shops and items, events, account changes, and inventory space. I will also be adding a small battle system into this (For more information about this See Part III - Forum Changes and Implementation and the section on the battle system). Now in order to make things like items, inventory space, and shops to be considered valuable, we must introduce a new system, which is also inspired by Gaia Online, an avatar that is customizable, but in a different way. To better understand this proposed system, see Part III - Forum Changes and Implementation. Shops would sell an item for a certain amount of gold, the item could be cosmetic or serve a function. If it serves a function, then it should be either single-use (for items such as consumables, like potions and food) or have durability (for items such as swords). Note that a function can also, ultimately, be cosmetic as well (such as a gender-change potion). With items that have durability, every day they will lose a small amount of durability, even if not in use. Items that can be in use, such as in the battle system, will lose durability based upon how it is used, and the system that uses it. For events, it could be something like Gaia Online's Save our Shops event, in which gold needed to be donated to protect the shops due to 'tax issues'. Account changes would include things like Name Changing and Changing the Gender of your Avatar (Not the gender listed on your account), which could cost a set amount of Krone to change it, although we could give one or two times free. I will also add that I think a good idea is to have things like joining guilds or registering families to cost a small, flat fee. I will be going over this a bit more in Part IV of this document.
Part III - Forum Changes and Implementation Details Before I move on to other parts of the system and it's arguments, I'm going to go over how certain systems should be, ideally, implemented at the beginning.
Battle System First, the Battle System. In this system a person could battle another Wintrean, or Monster. The reason why they would do this is that a small amount of gold might be awarded to a player for defeating a monster. For battling other Intrans, both players would (willingly) pay an amount of gold, and then they can battle, the winner gets some Krones, and may also get an item (such an item should be bound and cosmetic only. It must be cosmetic only if it may provide any advantage in the battle system.). Battling would be similar to what you think of in a JRPG, in players select their decision, and then they are acted upon at the same time. Items with durability would also loose a larger portion of their durability, but would be able to affect a stat. Certain Consumables may also help with this, by providing temporary buffs. There would also be a general 'stamina' stat, which would decrease with each battle and would need to be restored by eating or by waiting. Stats like Stamina, and Health, would regenerate over time (Health would regen at a faster rate than Stamina) however consumables such as certain foods would restore one of the two, or both.
Over time the battle system could grow into a larger system entirely. It should be noted this purpose is to help act as a sink primarily, in order to help remove durability items. Ideally this could also be worked into the Arena Forum Game as well.
Durability System I will be going over how durability should work. As stated previously items that have a function in the battle system, beyond a one-time use, would have a durability, with it going down a small amount each day. Usage in the battle system would decrease its durability more, and also quicker, however it would provide a benefit within the battle system. Durable items may also have the daily durability removal be based upon how new it is, with newer items loosing less durability than those that are old. Durable items should also require to be repaired before being sold, as a way to further make this act as a sink.
Avatar System The avatar system would, ideally, allow a small 'chibi' character that can be customized in 'parts'. As such this section is further divided into categories: Non-Item Customization, Item Customization, and Consumable Customization.
Non-Item Customization Non-Item customizations are things that are applied upon being bought. As they are not items, they are untradable, and thus act as a sink. These items are things like Hair and Eyes are in this category. Under the category of hair it is hair styles and color, under the category of eyes it is eye shape, general expression, and eye color.
Item Customizations are simply accessories and clothing that can be used on an avatar to customize it. These are items and as such may be traded or sold by the players. They may be attached or removed at any time as well. Degradable items are also classified under this category. Most of these only affect some stats or are cosmetic only. These can be divided up into further categories, but for the sake of this document, it does not divide these categories. However, it does suggest that if Wigs are to be a thing, that they be treated similar to hats. Further it is HIGHLY suggested that Wigs are more expensive than actual hair changing, in order to make that sink more useful.
Consumable Customizations are those that are items, but upon being used are consumed for an effect. These items may be sold or traded by players. These can be things such as Gender Change Potions, or other kinds of potions. For example Gaia Online has a consumables that make you a Vampire or change your skin tone. These items act as sinks, but as minor sinks.
Shop System The shop system is where users BUY things, users may not sell things to the stores, in order to keep the amount of Faucets lower and to add more discretion in how the economy works. Ideally there would be multiple 'shops', which would act as item categories so users can more easily find what they are looking for, however for the start of it we can just place everything in one shop, please note that from this point onwards I will be using the singular, shop, to refer to either the one shop or multiple shops that may be used. The Majority of items would need to be bought from a store, with some items being given away in contests/events ands some items may be obtained from the battle system (See the Battle System section for more information.). All the items would cost an amount of Krones, with the amount being determined by general inflation, and how easy and cheap the item should be, especially starting out. For example a plastic braclet may only cost 10 krones at the start and a diamond braclet may cost about 100 Krones at the start. At the start of this, each month inflation would be calculated and then the prices adjusted accordingly. After a year of doing this we would then only update it every six (6) months to one (1) year to keep up with the inflation. There would be no tax on shop transactions. Ideally we should also have some minor supply and demand effects here, and if something is in low demand potentially offering a sale, while if something is on high demand potentially raise the price up a little.
Trading System The Trading system goes over things such as Gifting, Item trading, and player 'stores'. As such I've divided it up into three categories and will be addressing this in that order as well, under those categories. Also, notes this is a Currency Neutral Activity
Gifting Gifting is basically giving the user an item or Krones, without getting something in return as part of a trade (for that see the Item Subsection.). A user would be able to either buy something from the store and give it to a user (potentially a user could also have a wish list as well), or could just send them Krones. This allows players to sell non-item goods, such as services, and still get Krones for them. This allows users to sell things such as Proof Reading Services, Legal Services, Images, and things like that, which may not have a tangible item that can be used on the avatar or in the battle system, but instead for whatever want they have. Krone sent through this system have the same tax as the tax on Krones in Item Trading (See the Item Trading Subsection), in order to prevent this from being used to bypass the Taxes on Item Trading.
Item Trading is where users trade items directly, this allows for players to trade items both have, instead of having to use Krones. This allows items themselves to have a value, however trades must be agreed upon by both players, in this system they could also use Krones as an item, however the tax should be either equal too or double the tax of the Player stores. This is to decentivize the use of Krones to circumvent the Player Store prices or the Player store taxes. This also allows some bartering and negotiation.
Player Stores are not actual, stores. Instead, a player may sell an item for a price that they choose, and it may be more than or lower than what you can get in the actual store. However, an item, upon being placed within this may be bought by anyone who can pay the cost. You can change the price as you wish, however you can not limit someone from buying it unless you remove it from sale. The items are also non-negotiable and are final as well (similar to actual stores). This is not grouped in with the actual store system as well. All transactions taking place here should have about a small tax on all sales, with a suggested tax of 2%, with it only being raised due to potential economic issues.
Also since we are ripping up the old systems and implementing new ones, we should allow the new system to be optional for members that have already signed up, potentially backdating it by a little to get people into this system already. However, make it so that once they opt-in to the new system they can not opt back out. This way people aren't forced into a system they don't want to use, however the trade off should be that name changes cost a bit more than it would on the new system, they can only earn a limited amount of Krones within a time frame, they can't use any of the new systems, and that the cap would be limited to the amount needed for a name change. If they do move to the new system, they do get to keep any Krones they have earned. This way we allow people to use the old system if they want too, while encouraging users to use the new system. Also, the cap of Krones that a person in the new system should be able to get should be limited to the highest bounds of a 32-Bit Integer, which is 2,147,483,647. The reason for this is two fold, one because it is high enough that it shouldn't be hit for a long time, and the second because it is low enough that if we ever have large masses of players needing to actually get past this, then we will probably have inflation issues at that point that we need to address.
Inventory System With items, there needs to be something for people to hold them in, as such there needs to be an inventory system. With this, it's a simple idea everyone starts off with X amount of slots to hold all items that you have, even equipped ones. As this space is finite, there will be 'upgrades' that can be bought, which would expand the inventory by a number of slots. These upgrades are permanent, they also act as a sink in order to remove money from the Economy without having to worry about that much added value. Ideally, upgrades would get more expensive each time, with a limit. I would suggest every starts with a few slots in total, which may be upgraded later.
Part IV - Addressing Criticisms from an economic Standpoint. I will also address the issues that have been brought up with some systems I have suggested, such as the fee for guilds and families or getting Krones by posting, in this section.
First off let me address the Fee for Guilds and Families. The cost for this should be about one post worth of Krones, or lower (ideally a bit lower). This shouldn't add too much of a disincentive to doing this, as it will be easy to recover the loss. However, to counter this and to make joining Guilds and having Families worth it, we could add incentives. For example guilds could easily give people a small amount of money for participating in guild activities or helping out with the guild. This incentivizes people to join guilds, however the money made out of this shouldn't be generated, but instead given from the guild itself. This would be done with people joining the guild, most of that money goes to the guild (with around a small portion being deducted for 'taxes'), which then can be payed out to members, this also must ONLY be available for guilds with fees, and no guild should be given any actual starting money. It should also be set at or around the fee itself. It should also be up to the guild if they charge a fee, if they get any money from the fee, and if they pay members (should they have a fee). For families, we could incorporate that into our system itself by having familial trades have a slightly lower tax than non-familial trades. However, joining and leaving families would have to be restricted and would require more lock-down in order to prevent abuse of this system.
Now to address the issue of the faucets in this system. You see, the concern arises from what most other regions do, however the issue isn't in the Faucets themselves, but the implementation of them, and the lack of sinks. Those with a concern over this faucet do, in fact, address the fact that most of the time the system have little to no meaningful sinks. However, that is one of the main issues in this. In fact for those systems meaningful sinks, which give value to people, would help alleviate those issues. However, the other issue is the exact implementation of said faucet. With the diminishing return used here, it doesn't exactly incentivize spamming, but does incentivize long, and hopefully more thoughtful, posts. This way, people not only are more likely to participate in discussions, but are more likely to contribute to those discussions. This also prevents the Krone from being too scarce, but also helps slow down inflation and helps prevent hyperinflation. We need to keep in mind that a leaky faucet can help cause, or speed, inflation up, however it is the lack of a drain that works which causes it to eventually overflow into economic devaluation and hyperinflation. We also should keep in mind inflation of around 2-4% is considered stable and good for the economy, so it is inflation greater than that, which causes economic issues.
Part V - Addressing the other proposals Now, I do wish to address some other proposals for the implementation. This will mainly go over faucet implementations.
A suggestion has been to avoid giving Krones out for posting and the like, but instead have it through creating topics and having people respond to topics. This isn't necessarily a good idea, because you aren't giving incentive for people to actually post a response to threads, nor are you incentivizing good posts. You are, however directly incentivizing people paying those to respond to their topics and more spammy responses. You are also encouraging the creation of low-value and more short-lived topics which fragments some discussions and the like. Further there is the issue of how do you handle split topics and discussions, and how that is handled within this system. You also make Krones too scarce, and may cause over-valuation or the formation of a bubble to form. It would also be harder to hit a target inflation rate, make the economy grow slower than it should, and would inevitably create a large wealth gap between new and old people, and those who post more topics and the like, and those that lurk more.
Another suggestion has been to give payment out to government officials and those who do extra work, is nice. However only doing this only makes it too scarce, and doing it in addition to the above only makes it harder for new people to get involved and find their niche. This has an effect to where there will, once again, be a difference between new users and old ones, which will only grow more over time. This gap will ultimately decentivize people from participating in any case.
A final idea I will touch upon, aside from something I haven't already addressed above, is that is to give money to government officials as a payment. Again, there is the issue of it being too scarce and over-valuation with this being the only form of faucet. When combined with the above, it may make it slightly more distributed, however we still need to keep in mind that Wintreath is, largely, a meritocracy, meaning that ultimately money will mainly go to those at the top, and less will go to those at the bottom. Older users will have an advantage, as they are more likely to be government workers in higher positions and also have lower positions as well. Even if lower positions are opened up deliberately for new users, it will still be lower paying positions, thus meaning that the older users, who already know what they like to do and already have proven themselves, will more than likely still get more money. When combined with the above system, you risk over inflation and having too many faucets. Further, early in the system, we need the money to get to people first, and then we can look at adding more ways to earn, without affecting the economy or inflation too much.
Part VI - How this should be rolled out This should be rolled out at once, however certain things could be teased before they are released. In addition to this we should focus on getting the systems in place first, and then get the art in place prior to release. It doesn't matter if the art is done days before, or a few hours before release. What does matter is that the system works and can handle things being added to it on a semi-regular basis.
Also, for things like the decrease on getting Krones through posting and voting, it should not go below zero, ever. Doing so will disincentivize posting. I will note that this will take a bit of time, and a lot of effort. However, in order to create a robust, stable, and functioning economy, one that is unlike anything else any region in NationStates has, we need to be willing to put this forward. I know I am asking for a lot, however we don't need to do anything super big either. Everything can be minimalistic as we tweak things and fix things. So long as they are implemented in an ideal fashion, we can build upon these systems later.
Part VII - On the Economy, Politics, and the Storting I felt like I should go over this topic briefly, in order to discuss this and get this point out of the way. Please note this is not about the economics or implementation itself, more so it's about the political side of things.
At this time I recommend keeping this away from the Storting/Underhusen or any elected member of Government. We do not need to introduce politicization, insecurity, and popular will to the system until later on, if ever. Further, allowing the Storting to get say over important things this early in the development then it threatens the existence and stability of the economy we are planning. It will increase politicization as well, something we are not too keen on doing. I also highly suggest keeping decisions away from the Government in general, as having it is more administrative than governmental. However, I do suggest creating a Ministry of Economics in order to help manage the economy and provide suggestions. This will allow for someone, who knows what they are doing, to better manage and recommend changes and improvements, while not allowing them from going overboard.
Part VIII - Ending Arguments The systems I have proposed here are non-exclusive and may be implemented with other ideas. However, interactions between them must be considered. Adding new Faucets or sinks must be considered and looked at from the question about how they will potentially affect the economy, especially if the economy is stable. This is not an all-or-nothing proposal either, you may choose what systems you want and don't want. However, be careful in doing so, I have created this with the idea that it will be all balanced, and removing or changing a sink or faucet could have drastic effects on the economy in the future. We must remember that we are not only implementing a currency, but creating an economy, and in order for this to work we must do work, we must look at potential interactions and look at this through the lens of economics. Failing to do so will lead to the failure of our economy before it begins. I have attempted to do just that in this proposal. This proposal is not perfect, but it is the best that I believe will work, with the most minimal amount of effort. Rome was not built in a day, and neither will our economy, our working economy.
