How Do dCity SIM Taxes Work?
INTRODUCTION
For those who do not know, dCity is a game you can find on the HIVE blockchain where you can earn rewards for building and managing a virtual city, as well as owing NFT's representing game assets which are yours to buy, sell or transfer as you please. In dCity, you can generate earnings in different Hive-Engine tokens [such as SIM (the games native utility token), WEED, BEER, ENTRY and GAMER] and as your City grows you can also earn native HIVE tokens.
In managing your city, just like in real life, you must pay taxes on the income generated by your city. However, not long ago, taxes in dCity were dramatically raised and some long time game participants complained that the taxes were excessive. In fact, at one point taxes were assessed at 100% resulting in no earnings on a players assets invested in the game.
Game taxes are still very high, but are below 100% (usually running in the 90% range). So in this supplement to the dCity Coin Guide, let's investigate several common questions concerning taxes in the dCity ecosystem.
HOW IN THE HELL IS THE TAX RATE SET IN DCITY?
Within the mechanics of dCity, every 14 days, there is a vote of the players to choose a new President.
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The most important job of the President is the influence the position has over setting the amount of taxes paid in the game. The President can increase/decrease income taxes, increase/decrease war tax, and turn on or off the following taxes: police tax, education tax, art tax, eco tax and jobs tax.
Additionally, players have the ability to lobby the candidates on four issues, two of which are tax related: income tax reduction and war tax adjustments.
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Using the City tab and then the map tab, you access the bubble map of your city together with all of the relevant statistics necessary for you to manage your city. From the statistics (left side of your screen) you can access the current daily tax assessment imposed on your city.
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THE PROS AND CONS OF HIGH TAXES
Your author presents this section of the article for your review and consideration. It is up to you to make a determination where you stand of the subject of ultra high taxes imposed in dCity.
THE PROS ASSOCIATED WITH HIGH GAME TAXES
- High taxes help to reduce SIM token inflation, which in turn should increase (or at least maintain) the value of the SIM token for the investors benefit.
- High taxes help to insure the sustainability of dCity moving forward into the future.
THE CONS ASSOCIATED WITH HIGH GAME TAXES
- High taxes may discourage new players thinking they will not produce sufficient income to justify their investment.
- Current active dCity participants may get put off by the high taxes and the resultant decrease in their earnings potential. They may either stop investing in the game and continue to merely collect, or, worse case, may sell off their assets and leave dCity entirely.
IS IT POSSIBLE TO EARN A POSITIVE RETURN ON INVESTING IN DCITY WITH THE HIGH TAXES
The answer to this question is a resounding YES!
However there is a caveat to this. Patience is required in order to realize a positive return in dCity, Once the investment is made in an game asset, that asset is yours and will continue to earn you daily income until you dispose of it. Patience enters the picture as the higher taxes will increase the amount of time necessary for you to recoup your investment. But once recouped, that asset will continue to return you positive earnings and move you into the black.
So basically, the more you invest, the greater your return will be, but you will be required to wait longer to realize the gains and income due to the high taxes.
IS THERE ANY STRATEGY TO LOWER THIS HIGH TAX BURDEN?
YES! One.
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You should buy a somewhat pricey Law Firm. Why? Well, the Law Firm gives you a 10% discount on your taxes - daily. Accordingly, if you are seriously into managing a city, the purchase of a Law Firm is a beneficial addition to your city.
CONCLUSION
Even with the high taxes present in dCity, it is still, in your author's opinion, a good investment vehicle for the future production of passive income.
And, your author has put his money where his mouth is on the status of dCity:
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Your author's city has outgrown the size of his computer screen.
Enjoy the game and best of luck!
DISCLAIMER: This article is intended as educational content only. It should not in any way be construed as investment advice. Any foregone gains or sustained loss by you in relation to dCity are yours and yours alone and shall not be imputed to this author.
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Electronic-terrorism, voice to skull and neuro monitoring on Hive and Steem. You can ignore this, but your going to wish you didnt soon. This is happening whether you believe it or not. https://ecency.com/fyrstikken/@fairandbalanced/i-am-the-only-motherfucker-on-the-internet-pointing-to-a-direct-source-for-voice-to-skull-electronic-terrorism
Thanks for the insight! Also - that's a sexy city you got there
Thanks for the compliment on my city and for taking the time to read my article. Greatly appreciated.
Whenever I recommend dCity to someone, the question that always comes up is: 'But aren't the taxes too high to make money?'
They see the SIM income relatively lower than what it was a few months ago due to taxes and get annoyed.
But what they should be asking is 'what gives the SIM token value?'
Or why would anyone see the SIM token as valuable enough to buy it off the market after they dump it every day...
dCity taxes are a key mechanism for controlling the supply/demand imbalance and therefore helps keep price steady.
The bottom line is that without this level of taxation in dCity, the SIM price would have gone to zero already because the mountain of supply hitting the market would have overwhelmed the tiny demand.
When demand picks up, something that I think definitely will happen as new players start to see dCity for the DeFi juggernaut it can be, then taxes will naturally drop.
The system is genius.
It always makes me chuckle that 99% of people don't want to know where demand for the tokens they're earning comes from, they just want to endlessly be able to dump at high prices.
dCity taxes are the reason that we can make a consistent SIM income from playing dCity at all.
Long live dCity taxes!
PS. This was actually on my to-do list as more of a personal research mission so I can better understand the game.
Looks like you've done all the work for me, so cheers! ;)
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As I am still expanding my city, I actually quite often buy SIM off LEODEX. Why, the price differential between paying in SWAP.HIVE versus SIM. Paying in SIM you are paying approximately 1/2 the SWAP.HIVE price.
If more people did this it would help the token balance as well driving down taxes. Hell anything to get SIM out of circulation would help.
Sorry if I unwittingly stole a project from you. It was not intentional, but I found the subject quite interesting.
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Very interesting article!
Don't forget about the churches, though !
They give you a 1 SIM tax return !
From my point of view, the tax system is really usefull to keep the SIM value afloat, but still not perfect...
You clearly pointed it, the only real way to drive SIM price up is to attract new player. But currently what's happening is : Taxes high => No new player 'cause taxes high => SIM continues to drop => Taxes get higher => ...
I don't know what could help. Maybe a burning mechanism on the market ? I think the fee on the market is there for the rewards, maybe some part should be burnt ?
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