IIP-66

REVISIONS NEEDED

Simple Summary

This proposal suggests removing the current bonus fuel system from IIP-39. The change aims to improve market transparency, stabilize fuel prices, and enhance the user experience by providing a clearer and more predictable marketplace for fuel trading.

Abstract

The Illuvium fuel exchange system currently utilizes a bonus fuel mechanism, which has led to market confusion, inefficiencies, and significant price fluctuations. This proposal advocates for the elimination of the bonus fuel system and the introduction of an order book model. By implementing an order book, players can place buy and sell orders transparently, which is expected to enhance price stability, improve user satisfaction, and create a more efficient marketplace.

Overview

The existing bonus fuel system in Illuvium was designed to give players the psychological effect of receiving a discount on fuel purchases. However, it has led to confusion and volatility in the fuel market. The lack of transparency in pricing has caused unpredictable price swings. This proposal advocates for the elimination of the bonus fuel system and the introduction of an order book model, where players can view all current buy and sell orders, facilitating better price discovery and market stability.

The proposed order book system would include the following key features:

• Order Placement: Players can place limit and market orders, choosing to buy or sell fuel at specified or current market prices.
• Minimum Order Size: A minimum order size of 20 fuel units would be set to maintain market efficiency and eliminate the rounded losses.
• User Interface Improvements: The fuel exchange interface will be redesigned to clearly display the order book, bids, asks, fuel price history and recent trades, providing players with a comprehensive view of market activity.

Rationale

The primary reasons for transitioning to an order book mechanism are:

• Market Confusion: The bonus fuel system lacks clarity, leading to significant market confusion and high price volatility. Players often find it challenging to determine the true cost or value of fuel, which undermines their trading decisions.
• User Experience: The complexity of the current system deters participation in the fuel market. A more transparent and user-friendly order book would enhance player engagement by providing clear information on fuel prices and market dynamics.
• Market Stability: The proposed order book system would reduce the extreme price fluctuations currently observed by providing a clear view of the supply and demand for fuel. This would lead to more stable pricing and a more predictable market environment.