Since my Friday post, the Linden Dollar sell rate continues creeping up, with people selling large blocks of L$ at historically high rates. At right are the very top sell orders last night, with the largest listed quantity, L$11,186,781, worth around $4,200 now in real dollars at an exchange rate of L$265 to $1 dollar. Thing is, just last month, when the exchange rate was closer to L$250/$1, that same block would be worth hundreds of real dollars more.
What's going on? I asked Linden Lab for a response on Thursday but still haven't received a reply. I also talked with an anonymous Linden insider with knowledge of this subject, and this person discounts the popular conspiracy theories raging among SL content creators, suggesting that Linden Lab itself is somehow manipulating the exchange rate.
"We were super-transparent about this years ago," my source told me, "and I doubt it's changed significantly in the time since I left. Linden Lab doesn't control the rates, the market does. If a number of larger businesses that have been holding significant L$ decide to liquidate and are willing to push the rate temporarily less financially favorably for sellers in exchange for more rapid exchange, then short-term small fluctuations like this happen. It's not a bug, it's a feature."
But why would those larger businesses want to sell so much Linden Dollars all of a sudden? I believe the most plausible theory -- and I stress theory -- is also the most benign: Private sim owners are cashing in L$ to take advantage of Linden Lab's recently announced offer of grandfathered maintenance rates (after paying a "buy-down" fee of $600):
I first read this theory from T-Kesserex, a well-known SLer on Plurk whose family was involved in the SL "land baron" biz: "I think it's people cashing out to get capital for the $600 dollar sim price reduction," as she put it. "If you own 10 sims you need $6000 bucks, so that's not easy without some cashing out."
This theory strikes me as most possible, because the large SL landowners have the most incentive and assets to do something like this, while any other explanation I've read doesn't seem as plausible. And if that's right, it's also good news for the SL userbase as a whole, suggesting land barons are making moves to be with Second Life for the long haul.
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