So if I understand this correctly there is no net short XMR position for over 99% of the debt and the remaining 1% is backed on a non recourse basis by in game assets. Given that the in game assets would likely hold their value against XMR under most scenarios, there is no resemblance to pirateat40 in any practical sense.
The situation I am talking about is a classic short position where the asset purchased with the borrowed XMR is uncorrelated to the value of XMR, not a heavily hedged situation such as the CK case.
There is no net position of anything. The game currency, moneretos, is only pegged to XMR so that 1 XMR buys 1,000,000 moneretos, but we do not offer redemption because we don't feel it adds any value at this point to give even the remotest ground for anyone to believe his manmade laws are violated by our humble game.
If people go long and short on moneretos as part of their gameplay, they can use it as a real-world hedge of their actual XMR position, but at present we are talking about minuscule amounts. Since CK internal growth rate is about 2% per day, in a few months the economy may have grown so that this opportunity starts to make actual financial sense for the (admittedly limited) target group of high-finance understanding yet meager means. It is highly likely that the rates go down then, though, as can be seen from the shape of our current interest rate curve (0.38% daily at 3mo, 0.19% at 12mo).
The whole game is now in the stage of economic simulation, the gameplay will be built on this economic structure soon, which is the reason we have banks and interest curves serving 87 characters currently.
