My thoughts on Gold Swapping

Being that gold swapping isn't against the rules (at the moment anyway). I thought I would discuss my views on Gold swapping.

During my masters at university I have learnt a lot about what would be seen as a fair price, this topic is about what should be considered as a fair price in runescape swapping gold from and to RS3 and Runescape 2007, and what price would be consider reasonable.

First off, a fair price is where both parties (the buyer and seller) don't gain a profit or an advantage. In the real world this is not the case and the seller will tend to aim to make a profit therefore we will look at "what is reasonable". For example if I offer you 100k of RS2007 for 100M RS3 money you would feel a bit ripped off.

The aim now is to find a fair exchange rate for RS3 to RS2007 for this we need to price some common item valued on both Runescape versions, ideally the item change in price should reflect the overall inflation.

The item I have chosen is Runescape Bonds, this isn't perfect but bonds can be redeemed to membership effecting both server's accounts (i'm making a few assumptions here). It is also possible to create a swapping business from scratch without having to farm money by investing in bonds. (i'm simi-ignoring supply and demand)

A RS3 bond (currently) is 12.5M and a RS2007 is 3M. Theses prices are obtained by Runescape.com and are only averages.

So from this we can calculate a fair exchange rate of 12.5 to 3 or a ratio of 4.17:1

This means that 4.17M in RS3 is worth 1M in RS2007.

so a fair rate follows:

RS3 > 07 = 4.17:1 (anything over 4.17 and the seller is making a profit)
07 > RS3 = 1:4.17 (anything under 4.17 and the seller is making a profit)

From this you can calculate how much a player/group is making profit from you.

For example one business has a RS3 > 07 rate of 5.6:1 this means that if I give them 500M to them I receive 89.28M meaning on average they received a profit of 80M. For this business there profit margin is 20%.

A 20% profit might seem high but unless the customers demand s for a reasonable price this comes to supply and demand.

However looking at my "fair rate" and assuming they are right then we might be able to make some profit from theses money swapping system. Currently a bond is worth 3M on RS-07, we could buy a old school bond from jagex (or somewhere else) and sell it for 3M. We then exchange it for RS3 money (rate 1:5) and we obtain 15M. This means that we obtained a profit for 2.5M by doing this than if we were to buy a RS3 bond.

This idea I plan to test later on as I understand that theory doesn't always work.

 

Jesus dude. You didn't have to go to school for this.. "Fair"... you lost me at that word. "Fair" varies too much because it swings both ways to wherever the party is willing to go.

 

Yeah. I've tried to keep it simple, you don't need much mathematics for this shit.

I suppose I'm treating the word "fair" in a objective view, rather than subjectivly where both members believe that the price is "reasonable"

 

kek. good 1

 

lmao

 

Okay...?

I only skimmed, but just wanted to point out: You just broadcasted your business strategy?

If your math was correct and fantastic, now an innumerable number of people will do the same thing and ruin your margins...why post this? Should've kept it to yourself and profited.