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Inflation vs Deflation: Tibian Modern Monetary Theory Setup



Jan 14, 2015
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If someone interested is interested in the development of this: (From Argardh forums)

Economy, as of 24/04/2016

Tired of seeing your rares, gold and characters on different servers constantly lose value? Argardh: Knights of Tibia will be the first server to promise an active work by developers to make sure that rares and goldcoin does not suffer from inflation, but instead, deflation.

Making $$ for you, the current player, instead of having your value halved for the cause of creating new players - to benefit the server.

Rare Items = Knightset /firesword and above

Great Items = The best of Tibias items, for example Sword of Valor, E-plate, Golden Helmet etc.

Unique Items = Items that are unique, there are no other of the same kind. Almost only from Tibia is the cylopmania
sword, almost all other uniques are from Argardh. While most are valuable rings and amulets, some will be the mightiest
of weapons and armors in the game. Except the uniques that are rewarded to Beta-players and community-supporters
these items will be rewarded to players winning tournaments, wars and different kinds of events and games thefirst year of gameplay starting at December 19.

The main reason why this is important to do over a long period of time(1 year) instead of a short one is to make sure the items are distributed to as many different players as possible. Distribution is extremely important. It's about distributing to as many players as possible to make sure that as many people as possible are committed to see the economy grow.

To counter the constant inflation

Droprates will start at 2.0(200%) and go down to 1.0(100%) over the course of 3 years. This will act as a shield against inflation. Inflation means that money(goldcoin) loses value over time, this is caused by an increasing amount of goldcoin being created. The first 3 month of a new server the amount of gold being farmed/accumulated is extremely low compared to that of a server after 1 year. Aswell as gold accumulated after 1 year, will surely be worth less after 3 years.. when there is perhaps 10x more gold accumulated by hunting/leveling.

This does not mean that goldcoin will be a better investment than rares. The effects of the decreased droprate will also influence the droprate of rares and items, which means - There will be a lot less rares dropped(50% less) after the 3 year period has ended. This means, if the server is not experiencing a high increase in players at that time (which it most likely is not), that all items and gold will together experience deflation(increase of value) instead of inflation.

Wait, what? Deflation, against what if not rares and in-game items?

Against the rl-$$, ofcourse. It is the exact same principles. Less items/gold being created = The existing ones increase in value.

The way this can reward the players with $$ for just playing is really interesting to say the least. No longer will you lose value(which in essence means time and work) by just being a little inactive or taking a break but instead you might even early on see the items and goldcoins you posess increase in value, steadily, by deflation alone.

To counteract inflation we will also manipulate the prices of potions and other consumables, to make sure that goldcoin is constantly being deleted/"burned" and thus taken off the market and increasing the value of the existing goldcoin.

To be continued and updated..

I'll come back to this thread again in 1 year and tell you if I set a new standard for OTs or failed my economy by giving too much $$ back to the players :)