ThePokerCoop

Liquidity post continued from yesterday.  I made two claims the other day about the Co-Op…  how in the long run, 1) you won’t get scammed and 2) that all trades will happen.  How so?

1) In the long run, the reason we we will all be able to trust each other is that the Co-Op is holding each member’s poker site insurance.  The poker site insurance is going to be a significant percentage of most player’s bankroll.  If a member goes “rogue,” you can be compensated out of their insurance money.  But I would be surprised if most people didn’t find all the benefits of the Co-Op to be worthwhile enough to make sure their reputation in the community was impeccable.

I’m not sure what the exact procedures are going to be yet, but an easy solution is to have a secure web site where I post everyone’s Co-Op email account and “pre-approve” people to trade certain quantities (like $250, $500, $1,000, $5,000, etc).  This way, you can transact up to that amount with peace of mind.  This will severely limit the scamming possibilities.

Just the other day, some poor schlub on 2+2 may have gotten scammed for $900 – he hadn’t heard from the counterparty for 2 days.  It pays to have a network of players where everyone has posted collateral.

2) So you might be wondering how I can be *sure* the trades will happen.  You may not remember, but I used to be a trader.  As a fellow player, I can provide a back-up market to all members, in case no one is interested in your request.  Volumes will be small in the beginning but will increase over time as the insurance fund grows.  I can post a 5 cent wide market for each of the sites: for example, 85 cents to buy Carbon funds and 90 cents to sell Carbon funds.  The prices will change, based on supply and demand.  The huge bonus is that once I post those prices, all the members can trade INSIDE of that price range.  If you know you can buy Carbon funds from me at 90 cents, people wanting to buy are probably going to bid somewhere between 85 and 88 cents.  Similarly for people who want to sell.  I’m think most transactions will occur very close to the middle of the range I set.  A similar concept would work for transfers across sites.  I’m hoping we have enough member flow so I don’t have to get involved at all.

In the beginning, I may have to limit the sizes of transactions until I get a feel for supply and demand and how the cashouts at various sites work.  But as time goes on, I will be able to do more size.  Again, we have to make sure the transfer volumes aren’t “excessive,” so as not to annoy the sites.  But with many members, one trade here and one trade there among fellow players shouldn’t be too much of a problem.