Guild Wars 2

So here’s an idea. What if there was a Loan company in-game? Call it the White Shark Loan Company. Players can use their gold as a loan to other players. The company would work like this:

- Player A wants to get a loan
- Player A goes to a White Shark Loan Officer and puts up a collateral
- The collateral could be Armor, Weapons, Crafting Materials and Mini-Pets. Cannot be Account Bound or Soulbound.
- The collateral will be locked in WSLC’s vault, and the loan value is based on the collateral.
- The collateral value is based on the current Buy Offers in the TP. The loan value is fixed at the time of request. Any future fluctuations in the collateral’s inherent value will not adjust the loan value.*
- Player A waits for the loan to be fulfilled

And then…
- Player B wants to loan his gold
- Player B checks WSLC for some loan offerings, and he can see what kind of collateral is placed
- Player B picks Player A’s Loan Request
- Player B places the gold, and WSLC sends the gold to Player A
- The terms are detailed in the mail. Terms are dependent on how much gold was loaned.

So here are the scenarios regarding loan payment
- If Player A defaults and does not pay the loan, Player A’s collateral is immediately transferred to Player B
- If Player A pays on the due date or within the grace period, Player A receives his collateral back, but pays full interest to WSLC. WSLC will then split the interest profit with Player B.
- If Player A pays before the due date, Player A receives his collateral back, but pays partial interest and penalty to WSLC. WSLC will then split the interest profit with Player B.
- If, by any means, Player A cannot pay the interest and/or penalty, his loan is still outstanding.

Initial thought is, why put up collateral for a loan when you can sell the materials anyway? You can do that, but what if you wanted to keep those materials for future use, like Legendaries or Exotics or whatever new seasonal stuff ANet throws at us? Also, selling the materials would take time unless you want to fulfill a Buy Order instead. So instead of selling them at Buy Order prices, you can just have it as a collateral for a loan. You would pay the loan eventually by doing events, dungeons, dailies, or trading in the TP.

Why would anyone loan gold? If you want a precursor but is short of 10g or 20g, you can ask for a loan.

Thoughts? If this is implemented, how would you think it would affect the TP or the economy in general?

EDIT:
- added clarification denoted by *

you could do a no collateral loan system and add a Break Kneecap skill when someone defaults.

John Smith.4610:

What’s the difference between this system and just selling your items on the TP then buying them back later?

That you do not run the risk that prices 3 folded by then.

Another question is ‘Why would anyone take the risk to take collateral that may be worth less in the future, making the buyer walk away from the collateral’.

The prices in this game are messed up. They go up and down more than in any other game. Collateral needs stable (or at least predictable) prices. GW2 is faaaaaaaar from that ideal.

Tallis.5607:

John Smith.4610:

What’s the difference between this system and just selling your items on the TP then buying them back later?

That you do not run the risk that prices 3 folded by then.

Another question is ‘Why would anyone take the risk to take collateral that may be worth less in the future, making the buyer walk away from the collateral’.

The prices in this game are messed up. They go up and down more than in any other game. Collateral needs stable (or at least predictable) prices. GW2 is faaaaaaaar from that ideal.

Collateral is valued on the TP’s Buy Offer price. If you took the collateral when the loan defaults, you could sell it by undercutting the Buy Offer price, which may break-even or give a small profit or become a net loss. This would be the risk that the loaner takes for the sake of interest profits.

What about a no collateral interest loan? Of course, the amount should be small and could be loaned to multiple people. There should be interest, up to a capped amount, that will always stay on the person in debt until the loan is paid in full with interest. (eg; 20% of all income goes directly to paying the loan after X amount of grace period).

penatbater.4710:

So…. what happens if you don’t pay up? The game deletes your character? o.o

It could completely lock out your account, but allow you access to a single section of the BLTC….The Gem Store….and only a portion of that.

Basically….it locks your account so that you can buy gems to convert to gold to repay the loan…..but that’s ALL you can do.

The loan amount could be based on the number of hours you’ve played characters across your account. That way, people will be MUCH less likely to just buy a new account, take out a loan, and never plan to pay it back.

Sky.7610:

What about a no collateral interest loan? Of course, the amount should be small and could be loaned to multiple people. There should be interest, up to a capped amount, that will always stay on the person in debt until the loan is paid in full with interest. (eg; 20% of all income goes directly to paying the loan after X amount of grace period).

The question with that is, “whose gold will be used for the loan”?

The next problem would be players in-debt up to their ears. The game would become a massive chore when all earnings are withheld to a point the player leaves the game. The debt will then become unpaid.

The scenario I gave in the OP is more of a player-to-player transaction with the game’s UI as the interface (like the TP we have already). ANet would only serve as a moneysink for half of the interest gained and the penalty fee. Loaners could use this as residual income, whereas the borrowers could use it as immediate cash to be paid later.

I hate the idea. There aren’t sufficient guarantees to the loaner as long as the collateral involves items that change value. People defaulting would definitely be a massive issue. If you don’t have the money, you don’t have the means to pay back that money with interest either. Nothing in this game requires a loan to get, at least nothing any sensible person would give you a loan to buy.

The only way I could see a system like this working is if you could put bound items or currencies up for collateral. Thinks like laurels, karma, dungeon armor, tokens, and various other objects would be good for such a system. Loaners would gain either money or something that they would have to work fairly hard towards in order to get. Items/currencies would have values attributed to them by an automatic pricing system from ANET to keep values steady on objects held as collateral.

A player could put up as many objects in a single loan contract as they desire, such as an entire dungeon armor set (value derived from token costs).

I think the system certainly has potential.

It hurts my head to think about what a fair market risk premium for an uncollateralized loan in GW2 would be.

this..

Tallis.5607:

John Smith.4610:

What’s the difference between this system and just selling your items on the TP then buying them back later?

That you do not run the risk that prices 3 folded by then.

Another question is ‘Why would anyone take the risk to take collateral that may be worth less in the future, making the buyer walk away from the collateral’.

The prices in this game are messed up. They go up and down more than in any other game. Collateral needs stable (or at least predictable) prices. GW2 is faaaaaaaar from that ideal.

and this..

nastyjman.8207:

Collateral is valued on the TP’s Sell Offer price. If you took the collateral when the loan defaults, you could sell it by undercutting the Buy Offer price, which may break-even or give a small profit or become a net loss. This would be the risk that the loaner takes for the sake of interest profits.

25 stacks of confusion..

Thrishmal.5019:

The only way I could see a system like this working is if you could put bound items or currencies up for collateral. Thinks like laurels, karma, dungeon armor, tokens, and various other objects would be good for such a system. Loaners would gain either money or something that they would have to work fairly hard towards in order to get. Items/currencies would have values attributed to them by an automatic pricing system from ANET to keep values steady on objects held as collateral.

A player could put up as many objects in a single loan contract as they desire, such as an entire dungeon armor set (value derived from token costs).

I think the system certainly has potential.

Then, why just dont make all bound item can be sold at BLTC?

Same question as John’s, what’s the difference?

xYz.1725:

Thrishmal.5019:

The only way I could see a system like this working is if you could put bound items or currencies up for collateral. Thinks like laurels, karma, dungeon armor, tokens, and various other objects would be good for such a system. Loaners would gain either money or something that they would have to work fairly hard towards in order to get. Items/currencies would have values attributed to them by an automatic pricing system from ANET to keep values steady on objects held as collateral.

A player could put up as many objects in a single loan contract as they desire, such as an entire dungeon armor set (value derived from token costs).

I think the system certainly has potential.

Then, why just dont make all bound item can be sold at BLTC?

Same question as John’s, what’s the difference?

The point of the system isn’t to sell your bound items/currencies for gold, but to get a loan from another player and enable that other player to earn interest for loaning the money.

While some players would make it a market for soulbound items/currencies, it is still a fantastic way to earn a little profit or gain the extra funds to make whatever gamble/purchase you are going after. It works well alongside the BLTC because it allows someone to get some extra cash in order to make a play on the market.

In the end, many would likely default on their loans, and even if they don’t, a portion would still get lost server side due to fees of the loan market. This has the net benefit of reducing the amount of gold in the market, cutting inflation in a (to me) good way.

Just wanted to chime-in again. This fantasy loan market will not accept Soulbound or Account Bound items since they cannot be transferred to the loaner.

Also, tokens, laurels and karma is hard to value. If it would be included in the loan market, the borrower will have to set a price on these and hope that the loaner would find it reasonable.

But the primary reason why Soulbound and Account Bound items are excluded from this is because of potential exploits. If Player A got his account hacked, the hacker can place all of his Soulbound and Account Bound items in the loan market, have an accomplice take the loan, and have it default or pay it early.

Why not make the user’s account the collateral. Loans would be offered by Anet and the amount would based on how many play hours your account has.

The higher the hours, the higher the loan you can take.

The lower the hours, the lower the loan you can take.

If the loan is not paid back in the agreed upon time, your account is locked out completely accept for access to 2 sections of the BLTC. It would give you the ability to purchase Gems for real money, then convert those Gems to gold to pay back whatever remaining balance you have on the loan.

If someone is willing to put their account at risk for a loan, let them…..but they need to understand that the more they take out, the harder it’s going to be to pay it back.

If someone defaults on their mortgage the bank takes their house. Same with a car loan, etc.

Your account is the collateral.

xYz.1725:

this..

Tallis.5607:

John Smith.4610:

What’s the difference between this system and just selling your items on the TP then buying them back later?

That you do not run the risk that prices 3 folded by then.

Another question is ‘Why would anyone take the risk to take collateral that may be worth less in the future, making the buyer walk away from the collateral’.

The prices in this game are messed up. They go up and down more than in any other game. Collateral needs stable (or at least predictable) prices. GW2 is faaaaaaaar from that ideal.

and this..

nastyjman.8207:

Collateral is valued on the TP’s Sell (should be Buy!)* Offer price. If you took the collateral when the loan defaults, you could sell it by undercutting the Buy Offer price, which may break-even or give a small profit or become a net loss. This would be the risk that the loaner takes for the sake of interest profits.

25 stacks of confusion..

• my mistake. Collateral should be based on the Buy Offer in the TP NOT the Sell Offer.

Giving us the ability to roleplay loan-sharking or indentured servitude would certainly be something.

Psientist.6437:

Giving us the ability to roleplay loan-sharking or indentured servitude would certainly be something.

Oh absolutely. We should go all out and add derivatives to the market, trading on margin, bankruptcy, and debtor’s prisons so we can get the full experience

Charismatic Harm.9683:

Why not make the user’s account the collateral. Loans would be offered by Anet and the amount would based on how many play hours your account has.

The higher the hours, the higher the loan you can take.

The lower the hours, the lower the loan you can take.

If the loan is not paid back in the agreed upon time, your account is locked out completely accept for access to 2 sections of the BLTC. It would give you the ability to purchase Gems for real money, then convert those Gems to gold to pay back whatever remaining balance you have on the loan.

If someone is willing to put their account at risk for a loan, let them…..but they need to understand that the more they take out, the harder it’s going to be to pay it back.

If someone defaults on their mortgage the bank takes their house. Same with a car loan, etc.

Your account is the collateral.

Not sure about this alternative. The gold should come from somewhere to keep the in-game economy in check. If ANet would do this, then the gold would come out of the Gem market.

But I’m not a fan of this since it entails an account lock-out.

Institutionalized loans don’t work in an MMO. People quit the game, and having a big loan with an important collateral and no way to pay it back, is an incentive to simply quit. In the end, this system will drive a lot of people away after losing both money and collateral.

Imho, that’s because people are stupid. In the end, people simply shouldn’t borrow money but ye, people will be people. Not having that at all is a safety hatch against people doing stupid things.

Final note. If you want to borrow, borrow to people you trust, people you know irl.

It’s an interesting idea in concept. I could see it being an entirely anet controlled load but not player-side. Let’s take the precursor purchase as an example of a financed item: player a sets sell price, player b wants to buy, but doesn’t have enough liquid assets (gold) to buy outright. First, subtract total available (banked) gold and begin the monetization of available assets of player b. Some form of highest buy orders for a given quantity average . over a period of time to prevent bad seeding of values, minus the 15% of course. Begin with available commodities such as ectos and other t6 mats, lodestones, cores, etc. Once the item sales can surpass the difference, calculate an assessed interest rate. Possibly tie to a commodity volatility. Player a gets the gold from the sale. Item and commodities transferred into a held state, not claimable by the loanee. As the player deposits payments into a White Shark Loan center and covers the value of the commodities used, those commodities are again available for pickup. Once the last item is paid for, the originally purchased item (example precursor) is available for pickup as well.

It’s a risk protection for the purchaser in that they’re protected from sud price rise in either the original item cost, but at risk that the items they’re buying back will tank in value before they finish they payoff.

The only thing I like about this entire idea is the Break Kneecaps skill.

If you defaulted on a loan, your account’s characters permanently have the crippled condition until you pay it back. Awesome.

EDIT: Ooh! and there’s already a sound file for “AHH! My leg!”. That would play every few minutes.

LFk.1408:

The only thing I like about this entire idea is the Break Kneecaps skill.

If you defaulted on a loan, your account’s characters permanently have the crippled condition until you pay it back. Awesome.

EDIT: Ooh! and there’s already a sound file for “AHH! My leg!”. That would play every few minutes.

Ok…..this has to be the single greatest comment in this thread. That may be the best incentive to repay the loan….even above needing collateral or having your account locked out.

It would basically make your account unplayable and would be a reminder to EVERYONE that sees you what happens when you don’t pay back your loan.

Charismatic Harm.9683:

LFk.1408:

The only thing I like about this entire idea is the Break Kneecaps skill.

If you defaulted on a loan, your account’s characters permanently have the crippled condition until you pay it back. Awesome.

EDIT: Ooh! and there’s already a sound file for “AHH! My leg!”. That would play every few minutes.

Ok…..this has to be the single greatest comment in this thread. That may be the best incentive to repay the loan….even above needing collateral or having your account locked out.

It would basically make your account unplayable and would be a reminder to EVERYONE that sees you what happens when you don’t pay back your loan.

LOL. How about having a champion randomly spawn on your location whenever you’re alone. And if by some reason you kill the champion with friends, the champion does not drop anything… at all!

I buy lots of a rarely traded but high supply material (probs some sort of low lvl end cooking product)
-Force the price up to 2000x the amount for 5 mins, 5c to 1g buy out + aggressive buy orders
-Collateral it to the white man
-Fail to repay my loan
-Profit
-Pay any loan fines, they are sure to be minimal compared to my profit
-Repeat

Rich actually do get free money with no risk, well by gum

You can always just borrow money from your parents, buy Gems from the store, convert to Gold, then clean the backyard for a month to pay off your debt.

Atmos.8105:

I buy lots of a rarely traded but high supply material (probs some sort of low lvl end cooking product)
-Force the price up to 2000x the amount for 5 mins, 5c to 1g buy out + aggressive buy orders
-Collateral it to the white man
-Fail to repay my loan
-Profit
-Pay any loan fines, they are sure to be minimal compared to my profit
-Repeat

Rich actually do get free money with no risk, well by gum

Ah, good one. So to avoid this, maybe the Collateral value should be based on a 10-day Moving Average of the Buy Offer from the TP.

John Smith.4610:

What’s the difference between this system and just selling your items on the TP then buying them back later?

Is this a Repo 105 joke?

edit for content: I think a formal loan market would be too complex to balance and would ultimately add limited value to the game. This isn’t real life where you need startup capital (to buy an education, start a business, etc…) to invest in order to make money. If you need money, you can always do CoF1 speed runs, farm orr events, borrow from friends, buy gems, ad nauseum.

While there’s probably no feasible way to make this work out in practice, it would definitely be a lot of fun (and a way to make some money!) if the flaws in the concept could be worked out.

1. You could also get into a friendly guild.
2. Earn their trust & friendship.
3. Explain what you would like and ask if they would help you achieve your goals.