ADDAX DCity Presidential Pledges - The Taxes!

Time to stick my neck out!

I have made numerous comments within the DCity discord server regarding the economics of the game, so it is fair I finally lay out my own plan. Such comments were under my personal @rycharde account, but as it doesn't even have a city I thought best to run for President using my ADDAX DCity account.

This started off as some bullet points, grew into a thesis, and this is now the short version!

The Psychology of Taxes

People, in general, do not make decisions merely on the here and now, they project into the future.

We have had some three weeks of high taxes hovering around the 50% mark. I assume many players have reacted by editing their city to match this new environment. Those decisions are not just based on the taxes as they exist, but also on the expectation that they will remain that way for some time.

This also means that there is no instant fix. A presidential term lasts just 14 days; long enough to make an impact but, perhaps more importantly, it also needs a promise that, should the new measures make a positive impact, that they will be continued into the future.

Like I said, players make decisions based on past performance projected into an expectation of the future.

My concern with the high-tax regime has always been that it had stopped growth. As more players join and existing cities grow, it is obvious that the size of the SIM economy would also grow. We do not as yet even have a measure of when such growth can be said to be "bad inflation" that is larger than organic growth. Zero inflation would mean zero game. At what point is growth a problem?

Without any real measure of inflation, the only obvious metric we have is the SIM market price. However, the price is not fully free-floating, with a known peg to the price of new cards, plus automatic taxes should the price fall below this. Having watched the market, I was concerned that the price would drop because of deflation rather than inflation.

What do people do when taxes are high? Consumers spend less and businesses reinvest less.

There are also other game metrics that can indicate growth or contraction. I don't wish to go into them here in depth but they include the HIVE reward pool, the number of active players, market activity and average card prices. We have seen most card prices fall and we saw the start of what seemed a SIM price drop. Luckily, as I write this, that has reversed. As this has taken a few days to edit, we see already a couple of days of modest taxes. Indeed, the current taxes look pretty similar to my own plan.

The 25% Plan

There are five taxes that redistribute tokens to certain card-holders, and those taxes add up to 30%. To be fair to all, I shall split those into two 1-week blocs.

15% taxes

Week 1: Eco, Education and Art taxes.

Week 2: War and Jobs taxes.

1% Police tax

This will be switched on for a 7-day period in the middle of the fortnight.

10% Basic tax

This will also remain fixed for the duration, bringing total taxes to 25-26%.

The SIM Protocols

There continues to be some concerns about the price of the SIM game token and the size of its pool. We have already seen the market price drop well below its 0.005 HIVE peg, but we have also seen it rise well above.

There are mechanisms already encoded within the game to react to such changes. There are also actions that players can take to affect the SIM price - some obvious, others perhaps less so.

Let us also not forget that the whole DCity game is also affected by its link to the HIVE price on external markets. This has had significant influence in the past and any major move by the HIVE coin may well manifest again in the SIM price.

The most obvious thing to do when SIM prices are below its peg is to buy the SIMs and then buy your random CITY cards with them. If the market price is, say, 0.0045 HIVE, then an 800 SIM card will cost just 3.60 HIVE instead of 4 HIVE.

That should be obvious to all, but what is maybe less obvious is when selling your cards on the market price those sales in SIM instead of SWAP.HIVE. This means the buyer either already has SIMs in their account or they will need to buy them. Given there are some 5,000 cards for sale as I write this, just this small change can make a significant difference to the dynamics of what is the in-game currency.

I am aware that when one looks at market prices in order the HIVE prices come up first just because the numbers are smaller. But I will always scroll down and also check the SIM prices. With some 800 daily players, such small changes in behaviour can make a significant difference to the game.

I started writing this a couple of days ago, but now see that the presidential taxes have dropped to a baseline of 20% with the extra coming from the "income tax", which is generated as a response to the SIM market price. I also note with some pleasure that the SIM price has retraced some of its recent losses and this should bring taxes down a bit further.

My proposal of an average 25% tax is a touch higher but also redistributes more benefits to card-holders. This is done across the board so that everyone will feel that their city is reaping some extra rewards in exchange for their taxes.

And Finally

The taxes have been calculated so that everybody will be happy for at least some of the time.

Presidential taxes are still a new thing. My aim here is to discover whether there are some "Goldilocks taxes" that avoid both over-inflating and over-deflating the economy. Even if such numbers exist, the nature of such an economic game is that I would expect prices to oscillate - both SIM and card prices would ebb and flow. Down does not mean forever down as lower prices bring new opportunities.

However, I am also giving players the responsibility to manage their game in such a way as to limit the automated Income Tax. I feel that the in-game SIM token should be used more widely within the economy. That part is up to all of us!

Don't Panic!

Vote ADDAX

And if you've read this far and don't yet have a city, then join DCity now.