Guild Wars 2

What is the exact algorithm used for determining the exchange rate ?
All I know so far is that the currency exchange has a stock of gems and coin, and that the ratio between them determines the exchange rates and that either of them reaching 0 causes problems.

Why did ANET decide to use this hidden algorithm over just selling gems like any other item on the trading post ?
Everyone can easily see how the trading post operates, not so much the black box of the currency exchange algorithm.

Does the currency exchange act as a gem sink ?
By that I mean, does the currency exchanges stock of gems increase over time (meaning some gems will never make it back out into player hands) or does it stay constant.

Are there any plans to replace the hidden currency exchange algorithm with the buy/sell order system of the trading post ?

I used the search tool to try to find a post about gem and gold ratio and found this post.

I am also curious about this, but more specifically why gems are not a 1:1 ratio. Anet might not want to reveal the algorithm in case there is a potential for abuse (I don’t pretend to know how someone could but I assume it’s possible).

It seems like the currency exchange is not a ‘gem sink’ but rather a gold sink as the difference between selling gems versus buying gems seems to be in favour of buying gems (i.e. more gold disappears off the market than is made from the sale). I haven’t sold gems, but if I’m reading average prices right, this seems to be the case. Shouldn’t it be a 1:1 ratio? i.e. if you could buy gems and instantaneously sell them back, shouldn’t you get exactly all your gold back? Otherwise, if i sell a purchased with real money gem, where is the additional gold going that the buyer paid that is not in my hands? This feels like a hidden tax that pulls gold out of the market.

I have no issue with that, but if it’s stated clearly in the UI then it won’t confuse gem sellers.

At the current state i think the diff between buying and selling 100gems is like 7s (could be wrong with the numbers). Well. im guessing this is to prevent ppl making money from trading like a stock exchange.

It’s one of the most brilliant gold sinks combined with a constant (real money) revenue generator for ANet.

Personally I can’t see them changing it, as it’s perfect for both their business and the game economy.