Crypto Kingdom - 1991 Retro Virtual World(City)

[rpietila]

Founding of The Hypothecary Bank in CryptoTown

The recent additions of new lands, and the soon coming new players that will inhabit the lands (and existing players willing to enter profitable real estate developments) have necessitated the opening of a Hypothecary Bank.

The Hypothecary Bank has the following business model:

- We issue long and short bonds and thus borrow money from investors. The current players of the game who have excess balances of moneretos are qualified, but also external investors that seek good returns for their XMR balances that hardly have any investment schemes outside of this game.

- The money is loaned out to characters against secure guarantees (a rule-of-thumb is that 50% money down of the property development (price of land - cashback + building project), then the other 50% we give as a loan, against a 100% mortgage to the whole property).

- Profit is made because the interest we pay is lower than the interest we receive.

- Risk to the bondholders is shielded, because the delinquency of one houseowner is borne by the Bank's profits. If the whole economy suffers a serious downturn and all property values are cut by half and all loans are foreclosed, then only the Bank's shareholders are affected first and bondholders second. If the whole game is shut down, this likely results in total loss to share- and bondholders as well as all the other players.

- In addition to bonds, the Bank is offering an IPO, and this money will be used for constructing a posh office building in the newly inaugurated Culture Square. The building will have much income-generating activities apart from the offices. The Bank's accounting will be transparent and show the share capital and loan capital separate for easy auditing.

- The Bank seeks to make profit (as they usually do) but also fulfill the necessary function of providing low-risk loans. High risk loans are not in the interest of the Bank. The excess share capital may be conservatively invested to housing projects, with the intention of rather quick exit, to release the funds.

The IPO consists of 1,000 units priced at 1 million each, and no founder's of finder's fee is paid (all money goes to the company).

The Series A bond is a 50-year bond paying 0.30% APR and comes in 10 million coupons, secured by all the Bank's assets. Every coupon pays back 11.5 million at maturity in 1554 (2014-12-26).

Participating in the IPO requires purchasing at least an equal number of bonds.

Market making will be provided for both the stocks and the bonds.

HM The King subscribes 300 stocks and 300 million worth of Series A bonds.

[rpietila]

"We are so happy that a Hypothecary Bank is founded under our guidance that we gift it with 10 LDC's, worth 100,000,000 m."

[McHaggis]

Alas my exploits around town have been draining all my time recently, I am only able to compose this note as i am currently laid up in bed with some ailment i have picked up, otherwise I would be back to treading the boards at the kingdoms theatre.

I have build up a large amount of moneros sent to the master of coin, Bishop David for investing in projects. Therefore I would like to purchase 100 stocks and 100 bonds as the return would come at a time when I will be seeking to build up my haw.

[Roopatra]

The ownership of all the Haws have been given to their new owners, and they have been walled at the new owner´s expense.

[rpietila]

"We are so happy that a Hypothecary Bank is founded under our guidance that we gift it with 10 LDC's, worth 100,000,000 m."

The Bank is eyeing the lot E-T6, and the prime lot of E-T5 next to it is still unsold (6 q @ 600 mil). If any of our noble citizens or companies is willing to buy it, now there could be a possiblity to make a joint architect project and give the city a grand edifice with a 50 m facade (second only to Royal Palace). The planned style is Neoclassical with high rooms, architectural symmetry, pilasters etc. The backside of the building may feature lower roomsfor servants and rentals etc. In the parade side, everything can be added in - halls, offices, shops, restaurants, hotels, museums, ...

If interested, contact us.

[David Latapie]

The FAQ is online: http://cryptokingdom.wikia.com/wiki/FAQ

[iluvbitcoins]

if there's any shares left, I'll take all of them

[rpietila]

Founding of The Hypothecary Bank in CryptoTown

- We issue long and short bonds and thus borrow money from investors.

The IPO consists of 1,000 units priced at 1 million each, and no founder's of finder's fee is paid (all money goes to the company).

The Series A bond is a 50-year bond paying 0.30% APR and comes in 10 million coupons, secured by all the Bank's assets. Every coupon pays back 11.5 million at maturity in 1554 (2014-12-26).

I would like to purchase 200 of each

200 stocks and 200 million worth of Series A bonds to Marquess Karl registered.

Now we start to consider if the time is ripe for a long bond offering. Some background.

The 50-year bond is 25 real-days, so if it could be renewed (which is likely possible), it matures 14.6 times per year. 1.15^14.6 = 7.69. Therefore the real-annualized return on the Series A bond is 669%. It is possible because the game is in such an early stage that the assets bought with the money can appreciate quickly (Jacket's recent sale of land in N, netted him 689% in 18 days, which is much less than a year, and he invested the profits in more land).

But it does not make much sense to pay back 8 times the amount in one year. In this case it would be better to invest the money in the game yourself. The economic rationale for interest rate is composed of:
- opportunity cost for money;
- risk of not getting back the amount promised.
- (in addition comes the actuarial cost of managing stuff, for this reason the large banks cannot be bothered to corner CryptoEconomy just yet)

XMR's opportunity cost is zero, since it does not have any other venues that offer keeping your money in XMR, still receiving interest on it.

Risk of not getting back is composed of bank failure and game failure, compounded over a year.

- The bank may be too big to fail, although as the Professor of Economics we staunchly deny the willingness to interfere with free markets, as King we care for the townspeople. In any case the bank is not especially prone to fail, because the failure would cause ripple effects in land markets etc.
- The game has many reasons and opportunities to fail, and the probabilities everyone must assess himself. Once the long bond markets work, then the interest rate tells (roughly) what is the probability that the market gives for the game's continued existence over one year.

So much said, the Long bond is a debt instrument whose maturity is 365 real-days. Its face value is 100 million, and the price is quoted as continuously compounded interest rate until maturity, or the market value (these two are the same thing because knowing one, you can calculate the other).

(now the rates are given as daily, instead of "game-APR", since the length of the game-year changes during the maturity of the bond)

Code:

Daily %	Real-APR%	Pay	Get back
1,27 %	9900 %	1	100
1,08 %	4900 %	2	100
0,82 %	1900 %	5	100
0,63 %	900 %	10	100
0,52 %	567 %	15	100
0,44 %	400 %	20	100
0,38 %	300 %	25	100
0,33 %	233 %	30	100
0,29 %	186 %	35	100
0,25 %	150 %	40	100
0,19 %	100 %	50	100
0,14 %	67 %	60	100
0,10 %	43 %	70	100
0,06 %	25 %	80	100
0,03 %	11 %	90	100

Several game ventures can pay back more than 1.27% daily currently. I am sure many would like to invest in a bond that cleanly pays back 100 times the original investment - but that is not possible, someone will overbid you   To generate value in the economy, the playing must be fun, and the high returns are just a result of generating value. The King is not a believer in generating value by adding numbers to databases, but adding colored squares does qualify.

To get the Long Bond, the barometer of the health of the economy and trustworthiness of the continuation of the game, started, the Hypothecary Bank of CryptoTown is issuing 5 units of long bond, 100 million payback value each.

SERIES 1 LONG BOND

The Hypothecary Bank of CryptoTown, pays to the presenter of this parchment, on the day and year that does correspond to the day of 2015-12-2 in the land of Humans and their Lord, 100,000,000 moneretos.

His Majesty The King bids 20,000,000 per unit, for a nice 5-fold payback if the game still exists after a year It is possible to bid for 1-5 units and auction closes in 24 hours.

[thezerg]

I'm trying to wrap my brain around the social-cultural implications of this... is it like a hugely complex game of monopoly played with might-be-valuable someday money (monero) with RP starting with all the properties (justifies since he is footing the bill for the game mechanics)?

[g0re79]

I'm trying to wrap my brain around the social-cultural implications of this... is it like a hugely complex game of monopoly played with might-be-valuable someday money (monero) with RP starting with all the properties (justifies since he is footing the bill for the game mechanics)?

More like RP is creating his own world to which he will transfer himself someday:) Anyway its awesome idea and I am looking forward for some fancy web interface

[rpietila]

I'm trying to wrap my brain around the social-cultural implications of this... is it like a hugely complex game of monopoly played with might-be-valuable someday money (monero) with RP starting with all the properties (justifies since he is footing the bill for the game mechanics)?

At present, it competes in the same series with existing MMORPG platforms, with a quite separate target group though. We don't have anything they didn't have. We lack most of the features they have, and don't even plan to be graphic in a realistic way.

We aim this to be fun, though, for the target audience of 30-50 year old males who want to build buildings (bigger than their neighbor) out of white stone in 1x1x1 m increments. 

Talking about socio-cultural implications is a bit far-fetched, although MMORPG addiction is an acknowledged condition. 

[paulsonnumismatics]

I'm trying to wrap my brain around the social-cultural implications of this... is it like a hugely complex game of monopoly played with might-be-valuable someday money (monero) with RP starting with all the properties (justifies since he is footing the bill for the game mechanics)?

When explaining here to my friends at my store i simply say "Think on an Ultima Online/Civilization/Sims game but using cryptos and crowdfunding/collaboration". The Habbo hotel analogy is also there.
Economy is very important, but we are just "kickstarting" a whole game using XMR, playing with offer/demand market swings and goofing around dressed with medieval bling, mostly :-) Having a blast, here, personally ^_^ Of course, the Alpha web version will look more "real", chat rooms, captchas, tours in the city, accounting, personal page, trades, markets and oh my.

[djjacket]

Sorry I might have missed something, I don't understand how much the LDC are worth and how to use them.

Those are worth 10,000,000 each and you can use them as payments for land currently forsale by the town in the new area.

[iluvbitcoins]

I'll bid 1 unit @21 million

[rpietila]

I'll bid 1 unit @21 million

Acknowledged. But I got a bid from Earl of Forte Spagnolo for all units @ 25 million. This corresponds to 0.38% daily.

[NewLiberty]

Founding of The Hypothecary Bank in CryptoTown

Marquess Joseph subscribes 30 stocks and 30 million worth of Series A bonds.
Asenath Subscribes to 10 stocks and 10 million worth of series A bonds.

Dear Lord Marquess and Asenath,

We will have to point you to the secondary market, since this IPO (despite its commendable size of 2 billion) was fully subscribed in a few hours.

Secondary market is opening in a few hours.

Also Joseph has been mentioning his marquessly bad game finances. In fact the servants could easily be supported with the current income from being a Marquess alone, it is the overdraft interest that is taking its toll yearly, and the remedy is to deposit more money or sell some ingame possessions. (The reason for the bad overdraft is partly that other Nobles have been selling their Noble Palace shares to the Marquess.)

Latest deposits have not yet been credited.
No one have contacted me for selling their Noble Palace shares as yet (perhaps this was done automatically) though there are some buyers that are seeking these.

[rpietila]

Grand Hotel stock offering

The Most Ancient Grand Hotel seeks new financing to complete its acquisition of new land right next to the Hotel itself. The land will be used to expand the activities of this only ***** hotel in town, which is available to the public and holds several records, including the best restaurant in town.

Balance sheet

ASSETS
828 mil  Grand Hotel - Building cost
900 mil  Grand Hotel land @100 mil/q (conservative)
650 mil  Grand Hotel haw with its 30 x 12 sqm rentals, shops and tavern
380 mil  Land acquired (1-E-(T10,T11))
180 mil  Gold
----------------------------------------------------------------------
2,938 mil

LIABILITIES
1,972 mil Shareholders' capital
715 mil  Bonds payable
251 mil  Short-term debt (overdraft)

Shareholders' capital per share: 3.94 mil
Earnings per share: 32,000/year (0.81%)

Valuation in the offering: 3.5 mil per share.

100 units are offered and they have equal rights with the existing 500 units.

HM receives a brokering compensation of privilege subscription for the first 20 units (at normal price).

Btw. The Hypothecary Bank was sold out in <24 hours and that was a 2,000 million issue.

[iluvbitcoins]

I'll bid 1 unit @21 million

Acknowledged. But I got a bid from Earl of Forte Spagnolo for all units @ 25 million. This corresponds to 0.38% daily.

1 unit @ 26 m

[djjacket]

Lord Jacket would like to purchase 15 shares of the Grand Hotel second offering.  

This looks like an excellent opportunity to expand ownership and increase the capacity of the nicest hotel in town.

Earnings per share: 32,000/year (0.81%)

This will also increase with the development of the properties next to the hotel as capacity can been increased.

[rpietila]

Grand Hotel second offering @ 3.5 mil/share is fully subscribed & closed.

HM 20
Master Quentin Moon 20
Lord Jacket 15
iluvbitcoins 15
Earl Ale 12
Dr. Choo 10
Earl Riccardo 8

That was fast, 1:17 hours. I had promised Jacket to subscribe all after 6 hours, but it did not get even close...