Mastering the LindeX

[SibyllVane]

After years, I finally decided to venture into the (for me) mysterious practice of cashing out. I have zero knowledge in economics/stock markets, and although I think I somehow managed to get the very basics of LindeX down, I am finding the whole thing pretty fascinating and would like to learn more about it. Can anyone point out/recommend readings that provide more insight...? blogs, websites, even articles if they exist! Google hasn't helped so far  TIA!

[Finite]

It's not what you think. It's not a stock exchange. You can only withdraw net gains.

[Rolig Loon]

Always turn first to the Knowledge Base when you have a basic question about AL.  In this case, start with

and

In a nutshell, the things to remember are:

• The LindeX is not a market.  It is a currency exchange. You are not buying and selling L$ with Linden Lab.  You are making agreements with other SL. residents and Linden Lab is facilitating the bargaining, in that same way that the stock exchange facilitates trades between buyers and sellers in RL.  LL takes a percentage of the sale as a fee to pay for that service.
• When you want to sell L$, you must first place an offer to sell.  (On your dashboard, select Lindex >> Manage >> Sell L$)   Until you know what you are doing and are comfortable with the process, I strongly suggest choosing the Market Sell option instead of the Limit Sell option.
• When the sale goes through, the amount you receive will be deposited in the USD balance in your account.  You may use it for many things (like paying for tier), or you can transfer it out of SL altogether.  Doing that is called a Credit Transfer.
• You may only do a credit transfer to a verified and registered PayPal account (or Skrill account).  There are no other options.  Follow the instructions in that second KB article.

[SibyllVane]

@Finiteyes, from my understanding it's not a real stock exchange and you can't make a profit - you can only "maximize" the earning from the Ls you're selling, and I'm fine with that. is that what you mean with "net gains"?

[SibyllVane]

@Rolig Loon thank you for the info and the advice! I've been reading all the threads/comments on the topic that I could find in this forum and found myself wishing I understood all the dynamics - it's quite exciting, for now XD

[Rolig Loon]

The LindeX is a currency exchange, very similar to currency exchanges in RL, so you can learn some of the basic concepts that are involved by doing some reading on the web.  For example, I just grabbed a pretty basic article at https://www.investopedia.com/terms/c/currency-exchange.asp .  That site has a rich collection of articles and tutorials to let you delve as deeply as you want into understanding how the exchanges work.  In SL, the LindeX is letting you exchange USD for L$ or vice versa in trades with other SL residents, just as you might trade USD for Euros or Yen in RL.   As you read the KB articles I cited earlier, you will find that you can trade almost any L$ that you have in your account.  The only exceptions are L$ that you receive directly from Linden Lab for certain promotions ( a rare restriction).  To clarify what Finite probably meant, one major difference between the LindeX and a RL exchange is that the LindeX will only allow you to trade USD that are currently in your account's USD balance.  You cannot make short sales or speculate in any way. 

[Finite]

24 minutes ago, Rolig Loon said:

The LindeX is a currency exchange, very similar to currency exchanges in RL, so you can learn some of the basic concepts that are involved by doing some reading on the web.  For example, I just grabbed a pretty basic article at https://www.investopedia.com/terms/c/currency-exchange.asp .  That site has a rich collection of articles and tutorials to let you delve as deeply as you want into understanding how the exchanges work.  In SL, the LindeX is letting you exchange USD for L$ or vice versa in trades with other SL residents, just as you might trade USD for Euros or Yen in RL.   As you read the KB articles I cited earlier, you will find that you can trade almost any L$ that you have in your account.  The only exceptions are L$ that you receive directly from Linden Lab for certain promotions ( a rare restriction).  To clarify what Finite probably meant, one major difference between the LindeX and a RL exchange is that the LindeX will only allow you to trade USD that are currently in your account's USD balance.  You cannot make short sales or speculate in any way. 

Yes that and you can only send money from your USD balance to paypal (process credit) via net gains earned meaning not from lindens you bought or received via promotion as Rolig said. So if you bought say $10 worth of lindens and profited $12 only the net $2 could be processed to paypal. The initial $10 USD balance could be used to buy more lindens or pay other SL related fees but not as means for processing credit.

Edited September 4, 2021 by Finite

[SibyllVane]

12 minutes ago, Rolig Loon said:

L$ that you receive directly from Linden Lab for certain promotions ( a rare restriction)

Ooo I've never heard of those promotions, probably because I became a Premium only just recently - I will look it up! and TY for the link, and the clarification

[Rolig Loon]

1 minute ago, SibyllVane said:

Ooo I've never heard of those promotions, probably because I became a Premium only just recently - I will look it up!

That's a pretty rare situation. Most people will never run into it. Another example of non-tradable L$ (again not one that you will ever see) is that I believe Linden Lab employees who have business accounts cannot trade L$ that the company gives them for business expenses in SL.  As you poke around the edges of the LindeX, you will find the same sorts of restrictions that you would expect any business to put in place to prohibit money laundering, misuse of company funds, speculation, and other activity that might be illegal, not in the company's best interests, or against their clients' fiduciary interests. All of these are things that 99% of SL residents never have to think about, but since you asked ....

[SibyllVane]

8 minutes ago, Finite said:

So if you bought say $10 worth of lindens and profited $12 only the net $2 is could be processed to paypal.

That makes sense, and I had no idea (maybe because I never considered doing it) - so thank you for mentioning @Finite! but by reading old threads, I am wondering if this regulation has been introduced only recently? I think I recall people saying that buying/selling Ls for a profit isn't worth the work or the wait - and even some speculating about traders dumping millions of Ls to influence the rates? unless I completely misunderstood, which is not that unlikely XD

[Finite]

10 minutes ago, SibyllVane said:

That makes sense, and I had no idea (maybe because I never considered doing it) - so thank you for mentioning @Finite! but by reading old threads, I am wondering if this regulation has been introduced only recently? I think I recall people saying that buying/selling Ls for a profit isn't worth the work or the wait - and even some speculating about traders dumping millions of Ls to influence the rates? unless I completely misunderstood, which is not that unlikely XD

Well if you buy say $10 at 251 lindens per dollar and sell at 241 lindens per dollar. You only net 10L per dollar spent. So for $10 you netted a whopping 100L. It's really not a money maker by any means.

As for the regulation it's been in their TOS for quite some time in multiple places. It's to prevent people from dumping and controlling the market as well as so not to make SL fall under some other more strictly regulated business category. A Linden used the term "real-world money transmitter" when discussing this recently.

Edited September 4, 2021 by Finite

[Rowan Amore]

I cashed out recently and have never earned a dime in SL.  You do have to.take into consideration the fees involved.in both selling Ls and cashing them out to Paypal.  It's only the special promos that @Rolig Loonmentioned that can't be cashed out to USD.

 

[Rolig Loon]

10 minutes ago, Finite said:

I think I recall people saying that buying/selling Ls for a profit isn't worth the work or the wait - and even some speculating about traders dumping millions of Ls to influence the rates?

It used to be possible to transfer USD directly from your credit card or PayPal account into your USD balance.  That is no longer possible, just as it is no longer possible to have money transferred to your bank or sent to you as a check, presumably because some people could have used the USD balance for money laundering ( transferring money in and then turning around and sending it back out to a different account).  Now, money that you bring into the LindeX is used to buy L$, so there is always an internal paper trail.  

As Finite says, Linden Lab controls fluctuations in the market rate for L$ so that it is not easy to make much profit by speculating on changes in the exchange rate. This was not so in the early days, but has been the norm for the past 10 years or so.  The whole idea is to make the LindeX convenient for SL residents but not very attractive for large scale trading by outsiders. These days, if you start handling large amounts of money through your account, you will attract the attention of someone in the company's audit group. 

[Finite]

It's certainly a case by case basis but it's not SL's policy. Two times I was denied a week apart because of this policy I am referring to. And when I recently asked the Lindens for clarification on the topic since there seemed to be some inconsistency and confusion I was told:

"Second Life is not an alternative to a real-world money transmitter. Sending or receiving Linden Dollars (L$) for the purpose of sending the L$ to PayPal is strictly against our Terms of Service.

 

As such, Linden Lab cannot continue to process credits resulting from the sale of your Linden Dollars on the LindeX immediately following the purchase of such Linden Dollars. Therefore, you should only buy as much Linden Dollars as needed for immediate use.

 

If you wish to send money to PayPal, it must be money that you earned legitimately in Second Life." - Slate Linden Account Security.

Edited September 4, 2021 by Finite

[SibyllVane]

Thank you everyone for the insight! Since I have you here, I would like to hear your opinion: looking at the rates right now,

 
https://gyazo.com/6bc31c434dcd9f2fe583f510e57e86

and assuming I was to try the limit sell, is it likely that an order lower than that huuuuuge chunk at 239/1US$ would ever get sold? I did a small market sell and I'm happy about it, but I would like to give the limit sell a try at some point, since I'm in no rush of cashing out!

[Rolig Loon]

34 minutes ago, Finite said:

It's certainly a case by case basis but it's not SL's policy. Two times I was denied a week apart because of this policy I am referring to. And when I recently asked the Lindens for clarification on the topic since there seemed to be some inconsistency and confusion I was told:

"Second Life is not an alternative to a real-world money transmitter. Sending or receiving Linden Dollars (L$) for the purpose of sending the L$ to PayPal is strictly against our Terms of Service.

 

As such, Linden Lab cannot continue to process credits resulting from the sale of your Linden Dollars on the LindeX immediately following the purchase of such Linden Dollars. Therefore, you should only buy as much Linden Dollars as needed for immediate use.

That's consistent with what I understand of the safeguards against money laundering, which could potentially get you and the Lab in trouble with the tax authorities.  The important part of the note you reported above is in the words "Linden Lab cannot continue to process credits resulting from the sale of your Linden Dollars on the LindeX immediately following the purchase of such Linden Dollars." It is certainly true that you can withdraw money that you have had in your accounts over a longer period of time, but the fuzzy part is how long you have to wait.

[Finite]

5 minutes ago, SibyllVane said:

Thank you everyone for the insight! Since I have you here, I would like to hear your opinion: looking at the rates right now,

 
https://gyazo.com/6bc31c434dcd9f2fe583f510e57e86

and assuming I was to try the limit sell, is it likely that an order lower than that huuuuuge chunk at 239/1US$ would ever get sold? I did a small market sell and I'm happy about it, but I would like to give the limit sell a try at some point, since I'm in no rush of cashing out!

As a buyer I haven't bought at less than 248L per dollar. Takes about 10-20mins to fill usually. When people instant buy they are buying at the best rate from the pool you listed. However if its a small amount say 10-20dollars worth I'll sometimes just do the instant buy for convenience.

[Rowan Amore]

6 minutes ago, Rolig Loon said:

That's consistent with what I understand of the safeguards against money laundering, which could potentially get you and the Lab in trouble with the tax authorities.  The important part of the note you reported above is in the words "Linden Lab cannot continue to process credits resulting from the sale of your Linden Dollars on the LindeX immediately following the purchase of such Linden Dollars." It is certainly true that you can withdraw money that you have had in your accounts over a longer period of time, but the fuzzy part is how long you have to wait.

I imagine the amount would send up red flags if it were too large.  As you saw, I only processed out $12.  Hardly enough to constitute laundering.  Tilia also doesn't say anything about earned money.  It just says 'at their discretion' when referring to cashing out to Paypal. 

[Rolig Loon]

5 minutes ago, SibyllVane said:

assuming I was to try the limit sell, is it likely that an order lower than that huuuuuge chunk at 239/1US$ would ever get sold?

The greatest volume of offers to sell is at L$239/USD.  If you offer to sell at L$240/USD, your offer will be executed before any offers at L$239 or lower.  The further down the table you go, the longer you will have to wait before your offer will be considered.  The probability of a trade does increase the longer the offer has been there, of course, so theoretically even an offer at L$226/USD will be executed some day in the distant future.  My normal practice is to sell at L$1/USD above wherever the largest volume of offers sits currently.  Doing that, I usually get a sale within a day, and sometimes even within minutes. The difference between selling at L$240 and L$239 is miniscule (If you are selling, say, L$50,000, the difference is 88 cents), so it's worth taking the quicker sale.

[Finite]

6 minutes ago, Rowan Amore said:

  Tilia also doesn't say anything about earned money.  It just says 'at their discretion' when referring to cashing out to Paypal. 

They say it's up to the platform's or provider's TOS...

and the availability of any refund will be subject to the relevant Platform TOS and the determination of the relevant Provider. 

https://www.tilia.io/legal/tos#Virtual-Tokens

[Rowan Amore]

I actually couldn't find anything specific or strictly against it in the LL ToS.  

I guess it is on a case by case basis only.

[Finite]

27 minutes ago, Rowan Amore said:

I actually couldn't find anything specific or strictly against it in the LL ToS.  

I guess it is on a case by case basis only.

It's mentioned in 3 parts and Slate said specifically...

[Rowan Amore]

1 hour ago, Finite said:

It's mentioned in 3 parts and Slate said specifically...

Could you please direct me to those parts in the ToS?

[Finite]

4 minutes ago, Rowan Amore said:

Could you please direct me to those parts in the ToS?

Account Balance

Process credit (withdrawal)

Net proceeds from your sales of Linden Dollars remain as credit on your Second Life account, and this credit is automatically applied to your account fees as described above. If you do not wish to apply your Linden Dollar sales proceeds to your fees, you may withdraw this portion of your account credit through a real-world credit process. (See Process Credit) Note that you may only process credit due to net proceeds from sales of Linden Dollars. Purchases of account credits and credits due to gift codes or other promotional account credits are nonrefundable, and may not be processed as a payment to you. (so only promotion credits?)

 

TOS

 

4.4 Linden Lab has no obligation to accept returns or provide refunds of any amounts paid for products or services purchased from Linden Lab.

Except as set forth above or in any Additional Terms, purchases of Linden Content (including but not limited to Usage Subscriptions, Virtual Tender,  and/or other Virtual Goods and Services) are final, non-refundable, have no monetary value (i.e. are not a cash account or equivalent) and are purchases of only a limited, non-exclusive, revocable, non-assignable, personal, and non-transferable license to use content Inworld, even if they come with a durational term (e.g. a monthly subscription).

Process Credit page

Net proceeds from your sale(s) of Linden Dollars remain as a credit on your Tilia account. This credit is automatically applied to your Second Life account fees as described here. If you do not want to apply your Linden Dollar sales proceeds to your account fees, you may process this portion of your account credit as a payment to you. You may only process credit due from net proceeds from sales of Linden Dollars.

A Linden's own words on this exact subject..

 

 

[Crim Mip]

When I sell L$ on the Lindex, I always go 1 higher than the highest exchange rate. Usually these days that's 241L to 1$US. My L's sell first and fast and I only lose a very small amount vs if I'd sold them at say 240 to 1. Remember there's a transaction fee and yet another fee if you do a process credit. You aren't going to make a profit trying to play the spread between buy and sell prices.