Inflation and deflation has been a common topic of conversation in Prosperous Universe over the years. With the new universe we are experiencing an extraordinary crunch on the economy. New players are using their starting assets to round out their base in the first week. Market makers come in to the rescue and offer infinite products at a set price. The big crunch on the economy is the ten-day spiral when players use their starting currency to pick and choose their full starter options.

Currency in PrUn is quite static. As players grow and money leaves the economy, we experience a period of deflation. There will be no other era of deflation as strong as the ten-day spiral. Deflation is primarily due to the amount of wealth each new player starts with. We're given a hyper inflated economy and it is up to us to resolve it.

Currency is being destroyed. Why?

When new players enter the game, they each start with between 35k and 45k units of currency depending on which starter package they choose. This initial bonus helps the game seed some initial currency into the game as well as giving players extra options for how they start. Players can visit the exchange and use that starter cash to build an extra building, buy more consumables, or buy fuel. In the case where another player is selling products of interest, a transaction will occur and the players will exchange goods for currency. In other cases where the product has not been made yet, a static market maker exists which sells unlimited products at a set price. This enables the universe to start with more diverse player setups and a reasonably healthy economy.

Developers have set the price at which these market makers sell each material. BSE is the material in highest demand. It has a static market maker sell price of 1550. Players can buy any amount of BSE they want at 1550 without fear of product running out or prices rising. Because players start with so much starting capital, BSE has become the most significantly used market maker in the game. Players have come to the conclusion that buying BSE at 1550 is well worth the money at this stage, so they continue to buy from the market makers. This results in massive amounts of currency being destroyed.

Destroying currency is not a bad thing. What the universe is doing is essentially a balancing act. As more currency leaves the system, it inherently becomes valuable. Each time a BSE is purchased from the market maker, the currency increases in value. This deflationary period is the great equalization of starting currency to starting productivity. In the near future we should expect that currency has increased in value so much that players are no longer willing to purchase products from the market makers and our economy will be, for the time being, truly free of all artificial influences.

Analyzing the Data

APEX is a remarkable application that allows us to harvest the transactional data from the exchanges relatively easily. Because of this, we are able to analyze the transactions that have occurred throughout the universe's exchanges and use that to plot, plan, predict, and debate. With transactional data available, we can see how currency has been created or destroyed.

The Crunch

With the big bang happening on February 24th, 2021, we experienced a steady influx of players over a 48 hour period who clearly spent their starting space bucks without hesitation. In most cases, the peak of currency destruction happened on the second day. The currency of the Hortus region, ICA, led the charge on currency deflation with the huge surge of players settling Promitor. Promitor is currently the most populated planet in the universe.

The Antares region is seeing a completely different pattern of currency destruction compared to the rest of the universe. They've been fairly consistent in purchases from the market maker as opposed to all other factions who have declined over time. This could be due to players liquidating their company and starting over after a few days or because new players are settling the Antares region more frequently.

After ten days, we are continuing to see hundreds of thousands of space bucks leave the game each day as players buy products from the market makers.

Currency Generation

While most players are aggressively purchasing products from the market makers, some players are doing the opposite. In certain industries, the prices have decreased so much that currency is being generated by players who are selling products to the market makers.

The amount of currency entering the system is seemingly inconsequential compared to the amount of currency leaving the system. There was a peak of 40k CIS entering the system on Mar 3, compared to 105k CIS leaving the system on the same day. Interestingly, there doesn't seem to be a correlation between currency created and the number of starting players in that region. Each currency is experiencing only a modest amount of currency generation.

What's hot

Purchasing construction prefabs has destroyed most of the currency. Nearly 75% of the currency destroyed is coming from BSE or BBH purchases. Additionally players are purchasing MCG in significant quantities. Consumables like RAT, DW, and OVE have also been purchased in enormous quantities.

Spicy take, you may not want to be in the business selling BSE

For better or for worse, the market maker sells are acting as a price ceiling. In economics, price ceilings limit potential profits. The supply and demand dynamics are altered when you have a product that cannot go above a given price. The lower the price ceiling, the less profits you could be making. If one runs a thought experiment on what would happen if these market makers didn't exist, we'd assume there would be an equilibrium price somewhere. That price would be higher than the price ceiling. At the start of the universe, players would be willing to pay more than 1550 for a single BSE, but they can't. Players are not able to sell BSE at any amount above 1550. If input costs are high, it's tough to make a healthy profit against the stiff competition of the MM sell. Whatever product is purchased from the market maker at the highest volume is going to be the product that is the hardest to profit from.

Savvy players have noticed that making and selling BBH is now more profitable than making and selling BSE. If the price of BBH is lifting off the market maker sell price of 2400, we can assume that we are not losing out on profits due to a price ceiling. As deflation continues we will inevitably see the BSE equilibrium price lift off the market maker as well. When that happens, the economic power of Moria will become very strong.

What's getting dumped into the market makers

It is no surprise to me that SF is the leading product in the area of being dumped. In the current universe, each player starts out with 3000 SF, which is enough fuel to make about 15 round trips to the exchange. Given that the average player will likely visit the exchange two or three times per week, we have enough fuel to last us months. Some players have decided that they'd prefer to just trade it to the market makers for some bonus starter cash.

The second place market maker currency generator goes to FEO, which is probably a product of massive over production from Vallis. In third place we find the cash cow of Antares, ALO. Other top contenders are what the community has speculated would happen: S, SCR, and MG. The rest of the materials sold to the market makers may indicate over production or lack of a demand. With GAL being sold to the MM, this could indicate that the fuel engineers of the universe are bailing as selling SF to the market maker is not the most ideal strategy.

Trends

Market makers in the Hortus region have primarily been selling construction prefabs, OVE, and MCG. As the region doesn't have any capacity to build OVE or MCG on its own, it makes sense that these materials are scarce. Construction prefab purchases have declined, but they are still strong. Overall the rate of currency destruction has slowed compared to Moria.

While BSE was the leader in purchases from the MM at the start of the universe, it has swiftly declined in Moria. Most recently, BBH has sold at a high rate which indicates players are building structures other than COL, EXT, and RIG (buildings which have only heavy BSE requirements). Looking exclusively at products that are not construction prefabs we can see that DW and RAT are no longer being purchased from the market maker at all. This indicates that players are filling the demand and the market is nearing stabilization.

Benten's trend differs greatly from Hortus and Moria in that they aren't buying BBH from the market makers in any significant quantities. Their reliance on the market maker for BSE is stronger than the other currencies. Relatively speaking, Benten's currency destruction has slowed down the most. The primary product purchased in the Benten region is DW. This is not surprising as the Benten exchange is the furthest away from Promitor making it a less ideal candidate to ship Promitor's cheap DW to. Settlers of Etherwind who have specialized in DW production will be happy to see the trends here which indicate DW may stay at 75 CIS for some time in the Benten region.

The hardest region to see trends in is Antares. The reach into higher tiers of production has resulted in an odd distribution of products purchased from the market maker. The leading product, BSE, has shown sporadic activity. RAT has declined as players on both Deimos and Phobos seem capable of supplying their own efficient RAT to the market. The other consumables, DW and OVE, continue to be purchased from the market.

Wrapping up

Check out the data backing this post. Curious to know more? Want to throw around some predictions and banter about the state of the economy? Jump into the Prosperous Universe Discord.