DCITY: Advantages and Disadvantages of High Taxes, SIM, Active Users and Considerations

Logo dcity owned by https://dcity.io/ - edit by @libertycrypto27 - Font used is Open Source

Hi friends of ReadCash and dCity players,

I joined the game of dCity on June 20, 2020.

I am very active on the Hive blockchain on which I post a lot and play some games.

My favourite games on Hive are Splinterlands, Rising Star and Dcity.

Here on read.cash I haven't written a post about Rising Star yet but I will soon and today I wanted to make some considerations about the game Dcity focusing on one particular aspect: taxes.

In the game of dCity the percentage value of taxes is decided by the governor who is elected every 14 days by the players of dCity with a vote that depends on the amount of SIM that each player owns.

Today, February 20, taxes are at 75,10%.

In the past, taxes have often been very low.

For example, on 30 December 2020, taxes were at 21.50%.

No one likes high taxes but taxes serve to counter and reduce SIM token inflation.

But are we sure that high taxes only bring benefits?

While high taxes serve a positive function, they can also have negative effects, and often the negative effects outweigh the positive.

A few days ago, taxes were even 100%.

Taxes at 100% are extremely dangerous because they practically drive away new players and the constant increase of active players is one of the important factors for the long-term economic sustainability of dCity.

Why would a new player buy a dCity card if that card produces 0 SIMs per day?

If I am a new player and I log in to the dCity site for the first time how do I realise that the card I should buy produces 0 SIMs I simply and logically don't buy it!

That's why 100% taxes should never be applied and in my humble opinion taxes should be capped at 50%-60%.

Advantages and Disadvantages of very high taxes

To sum up, very high taxes have one only advantage:

- they reduce SIM token inflation.

But at the same time they also have disadvantages:

- discourage the registration of new players.

- put all dCity players on alert and they may get scared and stop investing in dCity.

Often the right choice is in the middle, which is why I am not in favour of very high taxes (>60%) and very low taxes (<20%)

Considerations on the value of SIM tokens

The SIM token has been one of Hive's second-tier tokens with the most stable value for a long time.

For several months, its value moved in the range of 0.0045 HIVE - 0.0049 HIVE values.

For example, in the time period between 21 October 2020 and 20 December 2020, the graph of the SIM token value was as follows.

Let's now look at the current SIM token value graph.

Today 20 February 2021, 1 SIM has a value of 0.0025 HIVE (Highest Bid)

The drop in value compared to the past is evident but it is also true that the value of SIM tokens is relative and related to the value of HIVE.

If we consider the value of SIM tokens not in relation to the amount of HIVE that you receive from their sale but in relation to the value in dollars, it is interesting to note that 1 SIM is worth more today than on 28 December 2020 when 1 SIM was exchanged for 0.00490 HIVE.

As you can see from the image below 1 SIM has lost 58.16% of the value it had on 28 December 2020 compared to HIVE.

If you now look at the calculations in the image below you can see that the SIM token has gained value in dollars compared to 28 December 2020 when taxes were less than 30% and a SIM was worth 0.00490 HIVE

I always thought that the drop in value of SIM tokens was mainly due to the increase in the value of HIVE which is by the way a source of joy for all of us Hivers :) and looking at this data I am even more convinced of that.

More than taxes and the value of SIM tokens which is still important I am much more concerned about a drop in the number of active users.

The number of active users

The number of active players in dCity has almost always been on the rise.

After the last period of very high taxes with peaks of 100% the graph of active users had a small decrease.

Conclusion

The number of active users is something I consider very important as much if not more important than the value of SIM tokens.

It is my humble opinion but such high taxes are as counterproductive as taxes that are too low.

After a period of such high taxes we need a period of optimism and balance and that is why I voted for @trumpman as governor for the second time in a row who had campaigned very actively against too high taxes.

As far as my intentions for the dCity game are concerned, I will continue to invest in order to reach my production goal of 3000 SIM per day and in the coming days I will buy new cards to expand my virtual city.

I hope for a further increase in the value of HIVE and for that I will continue to invest in dCity using not HIVE but all the SIM tokens that my city produces.

What do you think about the current situation of dCity?

Do you agree with the current level of taxes (75%)?

Do you feel the same way as I do that the disadvantages of too high taxes outweigh the advantages?

Thanks for reading

Important Note:

dCity more than a game is an investment and mainly as such must be treated.

In every kind of investment there is always a risk factor to evaluate and consider.

I'm happy and satisfied to have invested in the dCity game but I can't predict the future (unfortunately) and so this post of mine is not an invitation to invest on dCity.

If not otherwise indicated, the images are screenshots taken from the sites:

https://dcity.io/

https://hivedata.space/statistics/dcity

https://hive-engine.com/

The font used in the images related to the calculations is Open Source

Images containing formulas and calculations are of my property

Follow me also on:

Hive: https://peakd.com/@libertycrypto27

Twitter: https://twitter.com/libertycrypto27

Publish0x: https://www.publish0x.com/libertycrypto27?a=MYervALeOB

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