Deep Dive: The PLEX Wall


There’s been a lot of fuss made about about the so-called “wall of PLEX” recently. I certainly scratched my head about it for a while and read up on some other people’s attempts to make head or tails of it. Here’s my take on the whole thing: what probag Bear did was slot together two doors CCP should have never left open and make himself a bunch of ISK. And yet, for a person with such a large wallet, he should be a little ashamed for his poor maths when it came to exploiting it further.

Bloodless Scalping

To understand the legitimate but misleading claim of tripling his ISK, you need to understand scalping. Scalping is the practice of noticing a difference between the buy and sell prices that is large enough to make a profit from. Due to transaction costs (in EVE: broker fees and sales tax), scalping can only occur when the buy-sell spread is greater than those costs. A scalper is taking advantage of the premium charged to urgent sellers and buyers to scrape off a few percent of an item’s worth by acting as a middleman.

For a career scalper, scalping requires a quantity of ISK that acts as a buffer. This ISK is used to buy the item traded, with the intent to sell it as soon as possible and recover that ISK. The size of that buffer only has to be enough to absorb the volume of trading. The actual ISK consumed in this practice is the fees, the net profit being what remains from the spread minus those fees.

PLEX is ideal for this as it ticks all the boxes of well-traded, value, and volume

For a scalper, there are some ideal traits to items on which you want to trade on. As you’re only profiting a fraction of the price of the item you’re trading on, you want the right combination of high individual value and high volume to make the effort worthwhile. Secondly, you want a well-traded good with an established value. With more esoteric items you run the risk of holding a large volume of what ends up being worthless items due to any number of shenanigans. PLEX is ideal for this as it ticks all the boxes of well-traded, value, and volume.

What makes scalping a difficult game is that most competition with other scalpers means reducing your own profits. This causes a ‘race to the bottom’ in which scalping ceases to be profitable at all, so the market potential for scalping often dies out quickly. The only other area with potential is costs, but within a game like EVE, under normal conditions they are fixed and unavoidable. Being able to reduce your costs when no others can is powerful: it means you can compete at price levels for which other scalpers would make zero profit. This allows scalping of all orders on a market where scalping can’t otherwise occur; it places you beyond competition.

In this case, the change in fees were percentage based broker fees. The difference between 0.5% and 3% on items trading at a billion ISK each like PLEX is pretty huge. Then, consider that PLEX is trading at a volume of 4000 items a day. Napkin math makes this out to be 100B ISK worth of potential scalping a day, which is along the right lines of what probag claimed.

Therein lies CCP’s first big mistake. By allowing buy orders to carry over and compete against a market with adjusted costs, they made this situation possible. It’s not surprising that an enterprising player was savvy enough to identify the ideal market for it. Yet the truth of the matter is that this exploitation harms nobody: all the scalping that is occurring is merely scalping off ISK that, in any other transaction, would sink out of the economy via the transaction costs. The only person probag really is scalping is the money that would otherwise have vanished into the ISK sink of transaction fees.

The Problem of Scale

Here is where I think probag potentially shot himself in the foot thrice

Naturally, things didn’t stop there. Why triple a little ISK when you can triple a lot? Here is where I think probag potentially shot himself in the foot thrice.

First, in order to inflate his buy orders to extend the ability to scalp as long as possible, he used the broken implementation of the Margin Trading skill and escrow mechanics to create a huge number of empty uncovered buy orders. The risk on these orders is actually pretty low due to the normal buffer collateral held for normal scalping. His wallet likely holds more than enough to absorb the volume of a full day’s worth of PLEX orders, so the ability to ‘pop’ his empty orders would need an unprecedented volume of PLEX dumped on the market. Furthermore, doing so would have no benefit to the person dumping said PLEX; if successful it would only serve to sabotage probag’s buy orders and turn them into losses.

Margin Trading and escrow have been broken for a long time; forum threads with developers have discussed the problem, but it remains unfixed to this day. I don’t think probag’s intention was to highlight this and I’m sure there are market traders and scammers alike who don’t want it to change. Unfortunately, CCP will likely renew their investigations into Margin Trading as a result of this incident (hint: in real life margin trading, you drain the escrow last, not first). The ability to ‘bump’ a buy order perpetually should also be looked at.

Another way probag did and didn’t shoot himself in the foot is the fact that cashing out is the real bottleneck. Consider: if a friend offers to triple your ISK, do you accept? The answer comes up often: it depends. When will the ISK be tripled? The rate of this scalping is not unlimited and the more people invested in such a scheme, the longer it would take to pay them all off. Furthermore, this type of scalping does take effort to engage with and scalp the market.

Given probag’s estimate of cashing out at a rate of 10B/day – a tripling of 3.3B of the money tied up in the buy orders – cashing out 1 trillion ISK worth of buy orders would take a little over 300 days. The average rate of return on 1 trillion ISK spent amounts to 6.6B a day, a mere 0.66% daily return on the total investment. On top of that, to absorb 1/3rd of the daily PLEX market volume for both the purposes of buffer and insuring your buy orders don’t fail, you would also need to have another 1.3 trillion ISK on hand. Factoring that into the initial setup costs, you’re down to 0.29% daily return on total investment. All this considered, you would be better off putting your 2.3 trillion ISK into other schemes that have better rates of return and/or need less effort.

To his credit, he resisted getting too many people to invest and didn’t overdo it any further. If he had, huge amounts of cash would have been sunk into buy orders that would not realized their tripling for many years to come.

Finally, probag went public with his scheme. This is also a debatable move; it’s possible people may have worked out what he did from the market alone, and CCP certainly should have noticed something amiss given their special interest in the stability of the PLEX market. Yet by going public, he invited not only scrutiny but the opportunity for players to call CCP to action and hold them to account for their errors.

Closing the Doors

Due to the fact CCP opted to make a two-step change to broker fees, they now have to reconsider what they’re going to do both now and when they make the second change. The simplest thing to do would be to cancel all buy orders and refund the broker fees, an annoying imposition on the market, but not a game-breaking one. The alternative would be to lock up pre-patch buy orders and require additional ISK be paid to reactivate them, or to otherwise somehow add in an excess charge to bring them back into parity with newer buy orders.

Fixing Margin Trading isn’t a new solution and would only serve to mitigate the exaggeration of this position. I can only hope the fuss surrounding this situation galvanises CCP to finally do so, even if it isn’t required to solve this particular issue.

As for the money made by probag Bear and any fellow, less-forward entrepreneurs, let them keep it! Well done to them for capitalising on the situation so far. It just wouldn’t make sense to let them continue to do so for the better part of a year as a result of borderline exploitation of EVE’s market mechanics.

Tags: business, Danikov, money, plex, trade

About the author


Like all great EVE players, Danikov lives in Scotland, where he enjoys deep-fried food and the world's best whiskys. Despite being an eclectic player of games, EVE has been his one and only MMO ever since late 2011.

  • Justin

    It was exploitation, ban him.

    • Rob Kaichin

      How was it exploitation?

      • dittotothatbro

        Justin said so!

  • Jarhead

    When I first read about this I had a few thoughts;

    Firstly if he drops the buy orders from 949m to 849m to keep them safe does he pay broker fees to raise them back to 949m? If the the market for PLEX raises to 1.2B how much extra broker fees is he up for to raise his buy orders? I guess he still avoids 3/4 of the fees.

    More importantly what happens to his investment when the PLEX market moves to “New Jita”? I never did the math on it taking 300 days to cash out but even without doing so it seemed like he was locking himself to the Jita market right when we were all considering a move away from it. Sure he can just let the orders fall over but if he has not yet reached his break even point by that time then the whole endevour was for naught.

    As for having enough ISK for his daily transactions; I assume he would raise one of his buy orders into play at the current price while he was actively watching. Only buy what he had funds for and then drop them back down to the 849m safety price while he was offline. Set his sell orders to sell and use the funds from those to trade the next day.

    • Brendan Drain

      Two great questions, I wondered the same myself. When he dropped his orders down from 949m to 849m on patch day to stop them being annihilated by someone dumping 8k PLEX on the market it was free, but if he raised them up again to 949 he’d pay the broker fee on the 100m difference. Thankfully buy order prices have remained low so he won’t be hit with that much, but if they increased a lot again he’d pay fees on a greater proportion of the buy order and his profit margin would definitely drop.

      If someone does manage to set up a New Jita trade hub citadel and it has a broker fee of under 0.43%, then probag could end up making a loss as he has essentially locked in a low rate of 0.43% and that’s where all his profit comes from. His orders would be worthless and he’d also be locked to Jita. This is why I think it was fortunate that probag only put a small amount (I think it was 70-80b) into the scheme. Although he wrote about wanting to pump trillions into this, that would have drawn out the scheme for hundreds of days and the longer it runs, the higher the odds that a player market hub would be built and ruin it.

  • Brendan Drain

    The article didn’t go too far into the maths, so I’d like to take a stab at that here in the comments. Assuming you invested 1 trillion actual ISK into the scheme (probag reportedly only invested 70-80b into it), you’d end up with about 232 trillion ISK of orders (for about 244,000 PLEX). Even if you slammed the orders against the profitability wall for margin flipping to get the market all to yourself, the gross profit per unit would be an absolute minimum of the market spread caused by 2.75% of fees minus the 0.75% transaction tax, so at least 18-20m per unit.

    The claim has been made that about 35% of the PLEX trading falls within a few hours each day and is all down to margin flipping, so if you price margin flippers out of the market you have about 35% of the market to yourself. On any standard 4000-plex day that means you would be responsible for ~1400 PLEX sales (buying 700 and selling them again). At this rate it would take about 349 days to fully deplete all of your buy orders, and the daily gross profit would be a minimum of 12.6b to 14b. The initial investment in pre-patch fees for this hypothetical day’s trading would be about 2.86b, so you’re talking about an minimum net profit per day of around 9.75b to 11.15b. That profit is dependent on the size of the market rather than the amount of ISK invested — extra investment only gives you additional days of making that profit before your market orders run out.

    In terms of a daily return on investment figure, ~10b/day would be great if you invested 70-80b into the scheme like probag reportedly did, but on 1 trillion ISK it’s only 1%. Keep in mind though that this is very low effort (2-3 hours Jita market flipping per day), that very few schemes can even scale up to make use of 1 trillion ISK, and that 10b/day is only the minimum achievable. If the profit per unit is higher than 20m or the amount traded per day is higher than 4000 or the percentage market capture is over 35% then the return will be much greater. Probag’s original estimate was 10b profit per hour (not per day) based on a 2.5 hour trading day, which is quite a discrepancy. Unless I got my maths wrong, I can only presume that he was being a lot less cautious in his calculations. Perhaps he also didn’t take into account that although 4000 PLEX are traded each day on the market that represents only 2000 complete flips (as both buys and sells count in the trade quantity figures), causing him to arrive at a doubled ISK/hr figure.

    Regarding keeping 1.3t on hand to absorb a large portion of the daily PLEX trade volume, you shouldn’t need anywhere near that much. You can just move one buy order to the top for a few hours per day and actively babysit it while flipping the bought PLEX to sell orders. The worst case scenario would be if your entire buy order was being filled and you didn’t manage to sell any in that period (highly unlikely), and in that case you could just drop your buy order down again and let it go inactive until you’ve made more sales. It’d be a pain in the arse and drop your profit per day rate, but it’s definitely possible to do this without having a ton more of ISK on hand.

    • Daniel Plain

      this is exactly what i would have written, albeit with less words and more insults in the mix.

    • Rhiaden

      He traded 1200 two days ago, with 41 total modifications required, for 27b profit

    • probag Bear

      Re: cautiousness and my 10bil/hr figure. Going to list off mistakes I made.

      0. First off, that figure was made assuming that I would set up buy orders for more item types than just PLEX. In the end I didn’t, and I never bothered to correct the figure.
      1. My flippable-PLEX-per-day volume figure was based on the time period Mar 18 – Apr 18 and gave me back 2374 total flips on an average day. While I did not fall victim to that factor of 2 error, there may have been some other systemic bias. After all, the script that spat that out was calibrated on various slices of the T2 rig/ship and T3 subs/ship market, all the way back in 2013, and has not really been modified since. I also used Apr 18 PLEX prices (1bil vs 950mil), which is another 5% error.
      2. Long story short, that script says 48bil / day for PLEX, 51.7bil / day for Injectors, 16.7bil/day for Extractors and ~4bil / day for the rest of the top 10 items combined. Totals up to ~120bil / day.
      2a). Knowing that PLEX and Extractors are intertwined, I decided to remove Extractors from that total, and then round down to 100 for good measure.
      3. I erroneously decided that I didn’t have time to do research and that I could just approximate all items as PLEX-like, and assume that they all shift ~35% of their daily flippable volume during the ~2.5 hour duration of the EU + US peaks.
      3a). To “make up” for such a ridiculous assumption, I shifted 35% down to 25%. I doubt even 25% is accurate for non-PLEX-related goods.

      In the end, those numbers gave me the 10bil/hr. How accurate any of them are, I’m still not sure.
      The doubling error you saw in my math was as a result of mistake #0: the fact that in the end, I only had enough time to set up buy orders on PLEX.

      • Brendan Drain

        Interesting breakdown, I’m surprised there were so many approximations involved in the initial workings with so much ISK on the line but I gather that you had very limited time to capitalise on this scheme. Point 0 and 3 definitely explain the 10b/hr discrepancy, and factoring in a few other trade items would easily have increased the return rate enough to meet that target so that makes sense. Since the profit in this scheme was based on fee differences and tied to trade volume and margin stability rather than actual price increases/decreases, you could easily have had fingers in a lot of different pies, so I can definitely see how this scheme could have potentially scaled up into the trillions of ISK investment.

        Ultimately I think it’s probably best that you only did a small investment as a large investment that would take more than a few months to recoup could risk a low-tax player trade hub coming in and upsetting your profit margins. If someone essentially locked down a large percentage of the trade on several items on the market for months, CCP could also have been forced to step in. The scheme does highlight the problem with Margin Trading, namely that the escrow is released first rather than last or proportionally over the course of the order, and it makes a good case for the kind of ISK someone could make if they had a preferential tax rate at a player trade hub citadel. Will be interesting to see where both of these points lead us.

        It was mentioned below that on a recent day’s trading you traded 1200 PLEX for 27b profit with only 41 market order modifications. I assume given the numbers that this is 1200 full flips rather than 600 buys and 600 sells, but is that 27b gross profit or does it take into account the 0.43% investment (about 4.9b on 1200 PLEX), and how many hours did the orders need babysat? I’d actually love to see a breakdown of your daily trades at some point, do you think you could maybe publish a detailed post-mortem of the scheme after you’ve cashed out? Would make for a fantastic read! Any idea how long it’ll take you to cash out at the current rate?

        • probag Bear

          Just refreshed this page while waiting for someone. I could wait until I have time for a proper reply, but instead I’ll just write a to-the-point one:

          – So many approximations: “interesting” is a generous word to describe my approximating :p. But no, putting self-criticism aside, I’m confident the final number I got was within 15% of the real-life value. There was reasoning behind all those approximations, I just left it out of this post.

          – To be perfectly honest, this new idea of “off-shoring” with citadels and remote orders never occurred. Apart from that very significant detail, I saw the threats, but I just thought they were acceptable risks as long as I could keep the pay-out timescale at 4 months or shorter. Some of it is a matter of “In my opinion, there’s no way in hell that’s happening”, some of it is a matter of “I can still cash out above the break-even point even if this happens”.

          – Just btw, that day, Sunday, was the first post-patch day I got a chance to actually play around with my orders and see what I can do. I flipped more plex on Sunday+Monday than the rest of the post-patch timescale combined.
          1200 full flips. 27B gross profit; also, do note the net investment is 0.43%*1B + 2%*0.05B due to relisting, which iirc is about the equivalent of 0.52%*1B?
          Total duration was 6 hours (it went on unattended for another 45 minutes or so, but I counted that into Monday), with 1 of those hours being wholly unattended (lunch). Average time between order modifications was ~10 minutes. That’s still far from good, especially once you turn gross profit into net profit.

          – Breakdown / Detailed post-mortem: If WalletJournal API stretches that far back and I get around to modifying a tool to give back user-friendly results. Which is to say, a hard maybe, strongly depending on what I’m doing in life when this is all over.

          – Cash-out time: my guess is as good as yours. Apr 27 – May 7 was about what, 1500 full flips. May 8th was 1200 full flips. And I still need 14800 flips. I anticipate having more time to experiment this month, which would put cash-out at “by the 25th”. But there’s also the possibility of me doing a bit more summer traveling before I can iron out a routine, so in the end, who knows.
          If I have a strong motivator to hurry it up, I can probably cash out by the 20th at a slightly lower margin (22mil ea -> 18mil ea). I don’t think I currently have one though.

          • Brendan Drain

            Great follow-up! I figured the same about citadel market hubs, that if one DID take off it’d take months so as long as you’re in profit by that stage it’s all good. A trillion ISK investment could have worked, but there would have been a considerable pressure to cash out quickly and it’d have been months before you’d be in profit. With only 70-80b invested there’s obviously no hurry to cash out quickly, and it doesn’t look like anyone’s trying to set up a market hub yet.

  • Bryan Frye

    Reminds me a lot of real world ‘gold trading’ Though more gold exist on the market then it does in reality and people speculate on it and trim the profit

  • Dirk MacGirk

    CCP no longer has a “special interest in the stability of the PLEX market.” That died when Dr.E left the building and turned off the lights of the EVE Central Bank. They do monitor for changes to the game that might have an unintended consequence for PLEX, but the idea of maintaining price stability is gone.

  • probag Bear

    Two small corrections:
    – “for a person with such a large wallet” not sure I would call 250bil pre-extraction / 350bil post-extraction large. I certainly don’t regard it as such.
    – “On top of that, to absorb 1/3rd of the daily PLEX market volume for both the purposes of buffer and insuring your buy orders don’t fail, you would also need to have another 1.3 trillion ISK on hand.” this is assuming I set the orders up at 0 profit when I wake up, go leave for the day, come back in the evening and relist once before I go to bed.
    The reality is much worse. From the beginning I assumed I’d have to put in continuous effort for the ~2.5 hours of PLEX-flipping peak time, every day I could afford to, constantly keeping a ear out for q script I made to beep whenever my liquid isk would get to low. This restricts my physical position to near a phone/laptop, and restricts my possible activities to “can be interrupted on a moment’s notice in case someone dumps 100 PLEX in one order”.
    This has the upside that cashing out is not 10B/day, but 10B/hour (25B/day). Also means I don’t need 1.3T isk on hand, but only something modest like 100B. It has obvious downsides.

    Now, how it actually worked out has been different. I got back home on Saturday, and experimented on Sunday. Like Rhiaden mentioned below, the end-of-day stats were ~1200 PLEX flipped, 41 total order modifications, 27B profit, and 10min2s average time between modifications.

    That’s still terrible. That was over the course of ~6 hours, during which I just happened to be available, only doing housework. But w.e.

    • probag Bear

      Anyway, what I originally wanted to reply with:

      Apart from those two things, I don’t think I see anything you’re incorrect about. This is a good, if detail-light, analysis. Going public was a mistake, wanting to do more than just my personal isk was a mistake that ended with me not even being able to put in a third of my personal isk, escrow mechanics have been conceptually annoying for ages and are one of the things that should be fixed, etcetera etcetera. I personally don’t think this will make CCP change the way they implement the second step of the fee changes, but that’s more of a philosophical question.