Grandfathered buy-down contributing to Lindex fluctuations?

The Lindex has been in a state of flux of late, something that has been the subject of discussion and speculation on a number of fronts. Reader Ample Clarity first pointed things out to me earlier last week via IM (I’ve been rather focused on other things of late, so haven’t been watching the broader news as much as I should), and I’ve been dipping in-and-out of conversations and reports on things since then.

The fluctuations started towards the end of 2015, and were perhaps first discussed on the pages of SL Universe. The discussion resumed in April, when further swings were noted,  causing additional concern among those looking to cash-out L$ balances, while sparking some of the more widespread discussion.

Lindex fluctuations (with thanks to Eku Zhong for the screen capture)

Lindex fluctuations (with thanks to Eku Zhong for the screen capture)

Various theories (and not a few conspiracies) have been put forward to explain what has been happening – although determining precisely what the cause is, is pretty much anyone’s guess. But purely in terms of the more recent fluctuations, New Worlds Notes (NWN) is promoting a theory which might just be plausible: that one (or more) large land estates have been liquidating L$ stocks in order to realise additional US dollar funds to take advantage of the Lab’s grandfathered buy-down offer.

The theory actually comes from Plurker T-Kesserex, who is quoted by NWN as saying:

I think it’s people cashing out to get capital for the $600 dollar sim price reduction … If you own 10 sims you need $6000, so that’s not easy without some cashing out.

At the start of the buy-down offer, Tyche Shepherd, of Grid Survey fame, estimated that around 85% of Homestead regions were already grandfathered, but only around 11% of full-priced regions of all types, leaving enormous potential in the market. During the first month, this figure increased to almost 21%, with the number of grandfathered full-priced regions rising from around 1,039 to 1960, demonstrating a thirst for conversion. Thus, the idea that one or more large estates might be liquidating L$ stocks to cover the cost of further conversions isn’t an unreasonable speculation.

But even if it is a fair assessment of the situation, it doesn’t offer any hint as to what  – market forces or otherwise – has been pushing at the Lindex since late 2015. Nor does it offer any comfort to those concerned about cashing out at a reasonable – or at least stable – rate. All that can be said for certain is that, if you have the need for L$ in your account, buying them hasn’t been this attractive in a good while.

5 thoughts on “Grandfathered buy-down contributing to Lindex fluctuations?

  1. isfullofcrap

    Interesting theory…. my tinfoil-cap instincts also wonder if any midrange-to-large estates that aren’t already grandfathered will try to leverage their size to get quiet free grandfathering to avoid the upfront fee.

    You know, because Atlas and handshake friend-or-family deals don’t happen anymore, right?😉

    -ls/cm

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  2. Prokofy Neva (@Prokofy)

    No.

    Please use some common sense and logic.

    No one cashes out Lindens with such a struggle and loses money on them to boot, paying new higher LindEx fees in order to pay a big $600 fee — only supposedly to save money down the line — no one who ALSO has to cash out Linden dollars to pay existing tier.

    http://3dblogger.typepad.com/second_thoughts/2016/05/no-dont-be-stupid-the-lindex-devaluation-is-not-about-grandfather-buy-down.html

    Everyone speculating with this notion has no evidence of even one such case — they themselves haven’t done this and they can’t point to others who have. Those who have aren’t telling us whether they used inworld or real dollars.

    Even if some of the volatility is caused by such cashouts they couldn’t possibly explain hundreds of millions of Lindens worth over a million real US dollars trying to get out the door. There *aren’t* 2000 buydowns to account for such an amout.

    So it’s about other things like a big content or land business cashing out or speculators or even the Lindens.

    Instead of everybody speculating about this because no one knows what is the MASS phenomenon causing it and is only guessing at this or that possible cause, people concerned should put pressure on the Lindens to say what they know and tell us what they are doing to control this situation.

    And I advocate boycotting The Arcade Event until we get some answers.

    http://3dblogger.typepad.com/second_thoughts/2016/05/boycott-arcade.html

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  3. Danni

    I am renting from a 40+ region estate and those sims were already grandfathered. Other estates my landlord knows as well. I can’t imagine anybody holding that much L$ cash in their account. It is always wise to just hold a minimum, since a simple LSL script could steal your money if you are not careful and give debit permissions to the wrong object. I think there is somebody professionally day trading L$ and making a quick buck or maybe even somebody hacked the Linden Dollar and now has to sell off those assets. I can’t really imagine the Lindens themself would try to make some money to pay for Sansar, because they would seriously hurt the group that they define as their customers, the content creators. Also this does disrupt the land market, since estate owners have to raise tier, which pisses of their tenants.

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