The Secret Plan to Stabilize the Lindex

Saturday, June 19, 2010

I've been thinking about what options Linden Lab has to stabilize the Lindex. It doesn't seem like they have a lot of options. In the past, when the Second Life economy was stronger, they could stabilize the LLD simply by selling through Supply Linden. But they don't have that option any more.

And then I thought of a plan so diabolical, so secretive, that it seemed perfect for Linden Lab's style of management.

To review, Linden Lab needs to balance the Lindex, either by increasing the number of buyers, or decreasing the number of sellers. How might that be achieved?

Buy LDD on the Lindex
Linden Lab could use Supply Linden to buy LDD, just as he has been selling before. Most people agree this is a non-starter. Linden Lab has been losing money, as evidenced by the recent layoffs. They can't afford to spend large sums shoring up the Lindex.

Increase LDD Sinks
If they can add more ways to vaporize LDD, it would mean less of them for people to sell. It's clear that they've started along this road, with offerings such as the Voice Morpher. But any sinks created in this way will be pitifully small compared to the number of LDD they need to soak up. This can be a component of a stabilization plan, but not the primary means.

Let landowners pay tier in LDD
This has been mentioned in the past as a possibility. But it's a huge and unwieldy hammer. Most of the LDD for sale on the Lindex are there because of landowners trying to buy USD to pay for their tier. Letting everyone pay for their tier in LDD could possibly unbalance the Lindex the other way.

Also, Linden Lab would lose out on the 3.5% fee they charge people to sell LDD. Again, not something they can afford.

But... what if Linden Lab allowed a select few landowners to pay their tier in LDD? If they controlled who paid in LDD and who paid in USD, then they could manage more exactly how many LDD were on the market to sell. They couldn't make this public, of course, because they can't afford to have everyone pay their tier in LDD. They would have to contact the few landowners they wanted to privilege with this gift.

Linden Lab already has a semi-secret program in place to allow a select few landowners to purchase land at a discount price. They could simply expand this program to include LDD tier-selling capability. It would be a perfect way for Linden Lab to stabilize the Lindex in a controlled fashion, without causing any panic or and more lurid Lindex news stories.



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