PLEX Changes Analysis and Issues

Rhivre 2017-03-21

Last week, CCP announced that Aurum and PLEX will be changing, as we covered in an article here.

There have been a lot of passionate responses to this change on Reddit and the Eve-O forums since the announcement was made, and CCP Rise popped into Talking in Stations this week to discuss the changes in more detail, it is well worth a watch, so check it out at the link below, or on the podcast
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Outside of the points raised on Talking in Stations, there have been some issues raised that I want to briefly go over.

The first is the comment that was made in Twitch chat, and I have seen made in several channels over the past few days.  That there was some sort of CSM/CCP leak that caused a spike in PLEX prices prior to this announcement.  This was addressed by Lockefox in Open Comms on Friday night, and I just want to go over it in a bit more detail here.

First of all, this is what people have been talking about:

Plex Graph

Plex Price History

This was noticed by people at the time it happened

The rise in price was seen after the devblog released as evidence for some sort of CSM leak, that is, people thought that someone on the CSM had taken advantage of knowledge about the PLEX changes to profit.

The problem with this hypothesis is that, well, the price spike was due, as EveProsper says, to a lack of supply.  If someone was manipulating the market, there would have been an increase in the volume traded, and there wasn’t.  Instead, on the right-hand image on the tweet above, it shows the number of sell orders as the blue line in the bottom half of the graph.

EveProsper Plex chart

Chart from EveProsper, showing the number of PLEX on sell and buy orders

Another site for market information is adam4eve and the information there shows the same pattern as the EveProsper data shown above.

Adam4Eve PLEX Chart

Plex pricing and volume March 2017 – Image from Adam4Eve.eu

The thing to understand about price rises is they are caused by one of two things.  The most obvious is an increase in the volume of items sold. This is what we see when someone buys out the market, or when a big change is announced that causes people to buy an item, or when a big fight happens and stocking up/replacement happens.  This is what most people assume has happened when a price suddenly changes, that supply has remained the same, and demand has increased.

The other reason a price suddenly changes is if demand stays the same, but supply is altered.  This is what has happened with PLEX in the run up to the dev blog being released.

PLEX are often on a knife-edge, right now in The Forge, it would there is 523 plex between current price (1.11b) and 1.2b.  523 sounds a lot, but, the daily volume in The Forge is around 4000 units. The spike people saw was an increase of 20m in 1 day. There are 132 PLEX between current price, and 1.13b, which would be a 20m increase.  What this means is, that if 132 PLEX for whatever reason, didn’t make it onto the market, and demand continued as normal, then the price would increase by 20m.

There are many reasons why a small amount of PLEX might not make it onto the market and cause a spike.  It happens on many items (we had orcas suddenly go over 1b late last year, and 6 weeks or so after citadels came out, empire ran dry of a mineral due to supply not matching demand over a period of weeks).

In the case of last week, there was a similar rise in Extractor prices.  The graph below plots the average price of PLEX and Extractors since March 2.  While there is a correlation on the market between PLEX and Extractors due to the use of PLEX to convert to Aurum to buy Extractors, if there was a market manipulation, we would expect to see more divergence than we see here.

Average Price of PLEX and Extractors in The Forge

There is a bump in Extractor volume on 10 March, and again on 12 March, but these are nothing out of the ordinary, and happen periodically (on February 25-26, February 17, February 8 for example).  Previous bumps in volume have not caused a spike such as we saw last week, which indicates supply was especially low.

The chart below plots volume for Extractors and PLEX for the same period as the average price was plotted.

PLEX and Extractor Volume

In any case, if there was any suspicious market activity, it would be reflected in volume, not a few players withholding PLEX.

Potential Problems

There is one rather large potential issue regarding the PLEX changeover.

In the dev blog, it states

Q: What will happen to existing market orders for PLEX when the feature launches?
A: We will cancel all orders and repay fees, as usual when we make a major type conversion.

When this happens in an NPC station, you have paid your fee to the Secure Commerce Commission, and so CCP refund the NPC fee that you have paid.

In a Citadel or Engineering Complex, however, the situation is somewhat different.  You pay the broker fee to the owner when the order is placed.  This creates a problem when CCP refund the fees.  You have paid ISK to a player, but, CCP cannot take ISK from player wallets to refund these fees – what happens if a player does not have sufficient ISK in the corp wallet?  Does it go to negative?

If CCP refund the ISK without taking it from the player wallets, they will have to inject ISK into the game, which is not going to happen.  That would leave the way open for people to set up a citadel, set fees to 100%, and then wait for CCP to refund the fee.

One suggested option is that CCP only refund fees in NPC stations, but, this comes with its own set of problems, as, at least in The Forge, a large number of PLEX orders are in citadels (and in Sov Nullsec, all PLEX orders will be in Citadels).  This would mean players who are using these structures to list PLEX orders would lose out on refunds unless they move their orders to an NPC station. For buy orders, this is not really an issue, as it is a simple case of cancelling the order and moving to the local trade hub.  For those who have sell orders up however, it requires them to either pull their orders down just before the change happens (assuming they are online) or move their PLEX into an NPC station to list instead.

The refunds only in NPC stations seems to be the best way for CCP to handle the changeover, as there are other concerns in citadels as well, relating to the changeable broker fee that can be set by the owner.

CCP have been given feedback on this (it has at least been mentioned on the forums, and feedback has been given to the CSM to pass on), so hopefully, we will get clarification on this issue soon.

Update: Today CCP released an update on the PLEX conversion, which you can read here. The relevant paragraph in it for this article is shown below:

Brokers Fees for PLEX Orders

Last week we mentioned that active market orders for old PLEX would have their brokers fees refunded during the conversion. The CSM was kind of enough to remind us that in Citadels, brokers fees are paid to the Citadel owner, meaning that if we refund fees in Citadels we create a nice ISK printing machine for wealthy players. While following up on this, our team discovered that we don’t actually have the ability to refund fees at all. In EVE, fees are paid as a transaction when an order is placed and not tied to the order itself. This is one of our team’s first “type” conversions and we were simply confused. Sorry for that. Hopefully, with adequate warning, orders can be set up with release date in mind to minimize wasted fees.


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Comments

  • Sami Koivisto

    “Hello, what’s going on?” Oooh.. clever start 😀

    March 21, 2017 at 12:16 pm
  • Fiction

    You seem to be missing a third option in that a CSM member with this knowledge could remove THEIR Plex sales causing a reduction in supply which causes the price to rise knowing that the can re-sell a few days later when the Devblog that they know about is released.

    March 21, 2017 at 12:33 pm
  • Pew Pew

    Firstly I don’t understand why you would want to buy plex in advance of this change. So now 1 plex is a month of game time and after conversion 500 plex is a month of gametime. So it’s not like what you have after is any more valuable.

    Maybe you think people will be more interested in Plex after? Maybe smaller units of PLEX will have more utility and so people will use them more and so the price will go up? Maybe smaller units means people will see them as less valuable and inflation will happen.

    Like when they rebalance a ships mineral content or something it’s obvious which way the price will go but for this I can’t see a clear reason why you would think having PLEX now is better than PLEX after the conversion.

    Secondly they’re going to need a good long term solution to sales tax refunds (and other issues) caused by changing in game items as presumably this will happen a lot.

    I think they should give people fair warning that it’s going to happen and then just take the fees directly off the player they were given to. Surely everyone will immediately relist their mini-plex and so the fees will come back in almost immediately?

    March 21, 2017 at 3:17 pm
    • Rhivre Pew Pew

      The reason for people maybe grabbing plex now is that they might rise due to increased usability post change. That, and for some people, they might not notice a change from 2m for a mini-plex to 3m as a big deal, when in reality it would be 1b-1.5b on a months sub.

      On the 2nd part, CCP just released the devblog https://community.eveonline.com/news/dev-blogs/plex-rework-follow-up with

      “While following up on this, our team discovered that we don’t actually have the ability to refund fees at all. In EVE, fees are paid as a transaction when an order is placed and not tied to the order itself. This is one of our team’s first “type” conversions and we were simply confused”

      so there wont be any refunds at all

      March 21, 2017 at 5:16 pm
      • Pew Pew Rhivre

        That makes sense. I guess the change can’t reduce PLEX usage as all the uses now still hold and after the patch it will have more functionality.

        Lol about the refunds.

        March 21, 2017 at 5:39 pm
  • Rishian Starfury

    First I do not believe the CSM had anything to do with PLEX prices. Anytime a stock is “split” or is announced that it will “split” it generates market activity around that stock. There are a few things going on hear some people do not understand. CCP is combining two forms of RMT currency aurum and plex. The traders only have a guess as to how much aurum is in the game and how much will be converted. Keep in mind plex is what you will soon use in the NES store to buy skins, extractors, etc. This puts uncertainty into the plex market. Whenever you have uncertainty you have speculators and speculation is what is causing the bump in plex prices, of course that is only speculation.

    March 21, 2017 at 8:06 pm
    • Random dude Rishian Starfury

      That’s the point the spike occurred before the Devblog was released so the general market traders were not aware of the change when the spike occured. Conclusion somebody who WAS aware could have caused the spike, in violation of CCP policy. Weather it was an individual on the CSM or someone else made aware due to prior knowledge of the Devblog will not be known except maybe by CCP themselves.

      March 21, 2017 at 9:24 pm
  • Caleb Ayrania

    That would require a sudden drop in supply, as the whole article shows is NOT the case. Its the demand that seem to have ticked up a little, but still well within range of “normal”..

    If you want to insist on a tinfoil hat scenario, that is your right. You should however at least come up with some factual proof to at least support this.

    Regarding the current CSM members, I am pretty sure any proper and serious investors would look elsewhere to speculate. Primarily because PLEX is mostly for storing wealth for inactive players, and to hifrequency margin trade. The only reason to put money in PLEX is that very long term it could yield a nice 50%+ profit. Also the individual members themselves on the CSM could never pull of any trades, the scrutiny from team security would pick that up, so it would always be strawmen or insider trading tips.

    Sorry there were no leaks this time. Which means we will have had the most clean and serious CSM I can remember.

    March 21, 2017 at 11:24 pm
    • It wouldn’t require a drop in supply, the people buying PLEX from sell orders keep doing so, eating into the higher priced stockpiles, until these high prices are reached and we start to get all flustered like we are. If the demand had increased that’s when we would’ve seen the volume increase.

      March 22, 2017 at 2:52 pm
  • Anon

    Sure, PLEX are supplied by the people who buy PLEX for real money, but they often sell them straight to buy orders. If the volume didn’t change, then where did the PLEX go? If people buying PLEX had knowledge of the change and held on to them rather than flipping them, there could’ve been a shortage.

    March 22, 2017 at 2:47 pm