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Introducing Eco Loans and Bonds

September 17, 2018
Stories of financial success and ruin in the Eco-sphere

Eco looks like a game about building up a city and getting to a level of technology high enough that you can shoot down the meteor while preserving the environment. But at its heart Eco is a game about organizing with other players, managing an economy, and balancing competing needs.

I use government bonds to fund building the city, paying for roads, flattening ground, and building the government buildings.

Recently loans and bonds were added to Eco to give players another tool to interact with other players. We thought it might be handy break down what they are and how to use them as well as look at some of the ways players are already using them in their servers.

In Eco a loan is a type of contract where the person who accepts it gets some money up front and in exchange promises to repay a greater amount at a later date. The idea is that this allows people who want to do a project to buy the tools and resources they need to succeed so much faster and better that they can repay the loan with interest and still be better off than than if they hadn’t taken the loan.

A bond is like a reversed loan. When you take a bond contract you immediately pay some money to the person that created the bond, then at the end of a specified period you will then receive your money back with a bit extra. A government might issue a bond to raise money to help pay for the construction of a building or roads and count on general increased productivity to result in enough taxes to cover the costs.

What are the elements of Loans and Bonds?

The main difference between loans and bonds is who is creating it, the person giving or receiving the money. Let us look at the parts that make them up.

There are three key elements to creating a loan or a bond.

First is allowed debt, that is how much money is going to change hands when the contract is first accepted. The person creating the contract can put in a range to make it attractive to a wider range of people. If you only need a loan for a small amount of money it’s wasteful to get and then pay interest on a large loan, on the other hand if you have done very well for yourself selling things and don’t have anything to do with a pile of money a giant bond might be a good idea to keep your money working.

Next is the interest percent, this is how much money has to be repaid in addition to the initial amount. If you take a loan for 100 credits at 5% interest when you pay the money back you will pay a total of 105%. This is the benefit to the person giving up the money. They lose the ability to use the money for other things and have a risk of not getting paid back, in exchange they get a little bit extra.

Finally is payback days, this is how many days after the money has been accepted that it must be paid back. Generally the more time the recipient of the money has to pay it back the higher the interest on it is.

Once you have all three of these figured out you define who can accept the contract (generally anyone) and post it on a contract board.

Then when someone wants to accept a posted contract they get to choose an amount that they would like that is within the range of the allowed debt. Once they do the payback amount will be automatically calculated based on the amount times the interest percent. And that can decide if they would like to enter that contract.

In Game Examples

For some real examples of how people have used these financial tools in game let’s look at the server Gods of War, one of the most popular EU servers.

I used two 50 dollar loans to purchase logs to kickstart my lumber work

Andrew had just finished setting up his furniture shop when he ran into a problem, he couldn’t buy logs. One service that the furniture store provides is buying logs at a reasonable price. It allows him to focus on making furniture without having to go harvest logs himself and gives other players, especially newer players a way to get some money. They can use this money to start their own projects or buy furniture from his shop giving the money right back to him. Andrews problem is to make this work while you are offline you need a lot of money, if you don’t have enough to back the buy order while you are offline you run into issues. You don’t want people to haul their logs all the way to you only to find you are out of money. This results in you missing a chance to buy logs at a good price and them getting stuck with logs they can’t use.

To address this issue Andrew took out some loans to give himself the money he needed to put up a large buy order. That allowed him to get up to speed making and selling furniture much faster than he could have otherwise. In the end he sold off some furniture, paid off the loan, and had enough money left over to keep the process going.

On the same server the government uses bonds to help pay for public works, mainly road works and government buildings.

The road works are large networks of roads that circle the globe and make transporting goods easier and increases the amount of land that accessible for building and trade. The increased trade should result in more taxes that will cover the costs in the long run, and the bonds are a tool to get the money up front. The government buildings consist of the federal bank and city hall, both of them conduct business that will help offset costs associated and generally provide server wide support to the players.

The server uses a gold standard so the federal bank is used as the hub for buying, selling, and storing gold. It also has the government store which is used to sell of property seized by the government, mostly due to people defaulting on loans or going inactive. The city hall has an office for selling deeds as well as a courtroom, as a place for people to settle disputes, and a space for parliament, while not implemented yet there are plans to give up direct democracy in favor of a representative system.

With this addition we bring finance, a massively powerful tool for organizing labor and resources, directly into Eco. It’s also a massively powerful tool for messing up your economy, and by consequence your environment. Can’t wait to see what players do with it, and lots more to come.

The Eco Team is a collection of introverted and sometimes genius programmers/designers based in Seattle and Australia. We all grew up and thrive in the video game culture, so of course making them is our dream job. We look forward to continuing to put out quality games for the community of players.