Why is Everything so Expensive? – Hypixel Skyblock

So the other day I was looking around these chests on my Island that I used to store donations in back in the day when we live streamed and I came across this 20 start of stunts worth about a hundred million coins this may not seem like anything too interesting this game is

Full of expensive items but what makes this an interesting item is that this item literally doesn’t do anything it’s just a useless piece of paper and it was originally sold by an NPC for 200 coins each now either everybody in this game knows something that I don’t or this

Autonomy is a mess given the recent talk about inflation I’m inclined to believe that the economy is at least a bit of a mess so I decided to look into this economy a bit getting some useful data from API as well as from the developers of the game itself which have driven me

Very interesting data that the community haven’t seen before like where exactly do all the coins in the game come from and where does it all end up going to and I found some pretty interesting stuff that I’ll be sharing in this video before that though I think we need to

Talk about the basics the basics of Shilling like how you should use God hell Castle when buying gems to inflate the economy even more because it helps supporting us a lot and gives you a cute little discount anyway Hypixel statlock is an MMORPG with a virtual economy that

Is arguably at the center of the entire game there’s an option house where players can sell items to each other and there’s a Bazaar where players can sell materials to each other on mass often times it’s faster and easier to grind for coins than it is to grind for items

That players want themselves because almost every item can be bought or sold to each other the main currency used for this is coins and coins are earned through various means such as enemy drops event Rewards or selling items to NPCs coins have value to players because

They can also be used to buy items from NPCs but but on top of that they can be used to also purchase rewards from boss fights and of course trade with other players because the coins themselves will always have intrinsic value by just being coins this makes them something

Economists would call humidity money this is a similar system to what early humans would use asteroids made of gold silver or even resources like salt or tea were used as currencies for trading amongst people due to their natural scarcity and the fact that they were useful on their own this is very

Different to Modern money or Fiat money which only has value because the government literally says it does and everyone just kind of trusts the government on their word anyway to put this tale of the economy into perspective the vast majority of Stabler players have at least a million coins

And a lot of players probably have at least a hundred million coins too the most expensive sword in the game is the Hyperion which is currently worth 750 million coins and there are many more items worth hundreds of millions of coins is that players want all the time

Because they’re either really good or just a bit flex item hopefully this should help you understand the scale of what I’m talking about in this video If you haven’t played in a while or if you literally never heard of this game in your life many items in the game have 8

Cost to get them for example opening loot chests at the end of dungeons costs more coins depending on how good the items inside are however the cost to obtain items is often a lot less than the cost players sell to each other this is because tablet can best be described

As a free market economy where anyone can buy or sell anything at any price with a few exceptions to items that cannot be bought sold or traded but we’re not gonna talk about those because this is a video about the autonomy in a free market economy the average price

And item sells at is not set by the developers or even the players but rather an economic principle known as the price mechanism although players do technically set the price of items and could sell an item for really any price they want that doesn’t mean anyone is

Actually going to buy something for that price the price of an item instead refers to the average price and item sells for on any given day basically a price that a player would sell an item for if they expected someone to actually buy it the basis of the price mechanism

Is actually something you may have heard of before supply and demand essentially the price of an item is the cost of an individual item where the number of players who want to buy that item known as the demand is equal to the number of items that are actually available to buy

Known as the supply when this state is achieved this is known as equilibrium everything about this is a completely natural function of a market economy so there are no players or developers working out what these ideal prices are the economy just kinda naturally falls into the state of equilibrium if left

Alone long enough even if game updates affect the supply and demand all the time anyway on stream now is a supply and demanded graph you’ll notice there’s two lines here this one for supply and this one for demand and the point where the two meat is called equilibrium The

Edge axis of the draft represents how many items are actually up for sale and the y-axis represents the price of the item and just for the sake of it let’s make this a hypothetical draft of the Hyperion sword you’ll see that this equilibrium point is right on 750

Million coins and the quantity is 55 hyperions per day and these are the actual numbers for this item let’s say in this hypothetical universe that Hypixel releases a better item in some future update as more people get the better item they sell their old Hyperion which increases the supply which means

That the supply line moves to the right of the draft and brings the equilibrium down and to the right more hyperions are being sold every day for cheaper in this universe let’s say that a couple weeks later this new item gets nerfed and now everyone wants their hyperions back the

Supply goes back down to normal because suddenly nobody is trying to sell their old one anymore and the demand line moves to the right instead which brings the price up more people are buying more hyperions four more coins obviously that’s very simplified but you get the idea I suppose this video has become

More about explaining economics through Hypixel Skyblock but whatever let’s now talk about stablock’s own economy as a whole it’s a little difficult to put numbers on a virtual economy because nobody is really counting anything and there is no central government counting all the coins being moved around every

Day and then publishing this info yearly in the real world we usually measure economies in terms of GDP essentially the value of everything an economy produces within a year without that data though the best we can do is look at the publicly available data if things sold

On the bazaar and auction house to get an idea of how many coins are being circulated luckily I have all of this data compiled by some lovely amazing people who made websites that track these sorts of Statistics so at the time of recording about 1.1 trillion coins

Are being spent in the bazaar every day and in the last year at the time of recording 287 trillion coins were spent in total similarly I also have this data for the auction house monthly which is on screen now it’s cool to see how the entire first month of style block only

Saw 27 million coins spent in the auction house an amount easily earned by a lot of players in about an hour today it wasn’t until the Dwarven mines and floor 7 updates that there were really that many expensive items to sell and that is around the time we see auction

House numbers and the tens of trillions and currently the auction house sees an estimated 30 to 40 trillion points per month of activity totaling 488 trillion coins in the last year Skyblock also has a premium currency gems which can be used to buy items that can be sold to

Other players for coins but coins themselves cannot be purchased directly if we take the price of booster treaties as some sort of Baseline we can work out that 3 million coins are worth about one dollar and applying that to the bazaar means that in the last year approximately 95 million seven hundred

Thousand dollars was traded between players a further 143 million 389 000 USD was traded around the auction house too totaling 245 million dollars in a single year between both markets although this number is in no way comparable to agdp if it were it would still be a bitter economy than three

Real world countries to Value Montserrat and nauru just barely falling short of Kiribati in any economy inflation is a a concern both in Virtual Worlds and our real world inflation is when the prices of basically everything increases over time and it can get really out of hand when it’s high inflation is usually

Measured as a percentage over a one-year period with the average taken from a bunch of items and services for example an inflation rate of 10 means something that crossed one dollar last year now costs 1.10 today the main reason inflation happens is a consequence of the way Fiat money or commodity money

Works because there is never a fixed amount of it more of it can be printed or created and because more of it can be printed or created the currency is also vulnerable to the laws of supply and demand if too many coins are created somehow they just become less valuable

Because as more and more people have the coins to afford expensive items the more the demand of every item in the game and as discussed before this also increases the price of every item in the game let’s take a look back at the draft of coins being spent per day in the bazaar

You notice any obvious Trends obviously the draft continuously goes up over time and that’s partly due to the constant inflation and just more people joining and playing the game Over time however the big thing to notice is right here this bit spite that kinda comes out of

Nowhere in March 2023 the bazaar went from averaging around 700 million points per day to over a trillion coins per day to this day the bazaar has not had a single day under 1 trillion coins since April 11 2023 even peaking at 1.7 trillion on May 15th a similar Trend can

Also be seen in the auction house although this is somewhat less noticeable because during this time a lot of items were removed from the auction house to the bazaar but the fact that the auction house reaches its second high speed the following month why did this exactly happen the short

Answer is a new update which added some new update items to the bazaar which naturally will increase how much is spent there all the time but the more complicated answer is inflation in February 2023 a new update to Skyblock was released known as the garden and it was all about farming the Buff’s

Deforming were insane if you’ve seen technoblade’s potato or video you’ll know he took over 8 months of constant daily potato farming and full minion dedication to reach 500 million potatoes formed now there is over a hundred players way past 500 million potatoes who weren’t even trying and that’s only

The ones who have their profiles public this also applies to basically every formable item in the game too so what do you do with literally billions of potatoes well you sell them obviously but to who potatoes don’t do a whole lot so the demand is almost zero surely this

Means their sell price is also basically zero right not exactly and Skyblock most items have something called an MPC sell price the NPCs will buy items for regardless of player controlled supply and demand essentially for small items the supply and demand graph looks a lot more like this because no matter how

High Supply gets NPCs have an infinitely high demand at the MPC price if players try to sell items for cheaper than that someone else is just going to buy it off of them and sell it back to the NPCs for profit the MPC sell prices for crops

Were buffed in an update at the end of March 2023 which more or less quadrupled the sell price of all forming items it actually got to the point where farming all day was a faster and more consistent method of obtaining most items in the game then actually really trying to

Grind for them yourself this price for potatoes is three coins which doesn’t seem like a whole lot but according to the bizarre 81.8 billion potatoes are sold every month on the bazaar and presumably hundreds of billions more are just instantly salty NPCs without ever reaching the bazaar now why is this a

Problem because whilst bizarre transactions are between two players exchanging coins that already exist NPC selling actually creates a new coins that never existed before and what happens when a load of new coins are created suddenly inflation now multiply this NPC selling Thing by every crop

That exists in the game and you have a recipe for an inflation problem the inflation distrossed is pretty noticeable too if you look around the price histories of several items that have not had recent drop chance changes you can see the inflation between February 2020 3 in July 2023 has been

Around 40 percent which it stands to a yearly inflation rate of around a hundred and fifty percent luckily this inflation peaked in May and has actually come down following balance changes in May that reduced this NPC sale price by 20 to 25 across the board of crops these

Balance changes came with patch notes which explained that they recognized inflation was becoming an issue but also believed that players were recognizing the fact that inflation existed and were manually increasing prices of everything out of panic more than anything whatever the case inflation appears to have settled down now although prices remain

Around 40 percent higher than they were four months ago to this day however there is an opposite Force to coin generators known as coin syncs a coin sync is any part of the game where coins are taken away from a player and then not giving back to any other player

Removing them forever the these are really the only tool available to combat inflation to developers but they luckily make inflation easier to manage than real world economics when looking to combat inflation there are two main numbers to consider total coins generated and total points sent over a

Period of time if the numbers of coins generated is larger than the number of coins sent you get inflation and everything gets more expensive but if the number of coins sunk is larger than the number of coins generated in a time period the game will actually experience deflation in which the economy gets

Smaller and the prices of everything in the game decreases both of these scenarios have their own issues which is why developers try to aim for a balance between the two although slightly more on the side of inflation because Point generation increasing is expected when new updates are released these numbers

Of coins generated and coins sunk are not available to the public unfortunately but luckily for you I actually do have access to some of this data directly from the game’s developers so special thanks to everyone at Hypixel for getting that data for me and allowing me to share it especially

Jayavarman in the last month which I believe to be the time period between 11th of June and 11th of July a total of 21.7 trillion coins were generated from all game sources in contrast 16.6 trillion coins were sent through all sources meaning that the economy Drew by 5.1 trillion coins within that month

To break it down further if the coin generators 11.9 trillion coins came from NPC selling 7.09 trillion from automated shipping 968 billion from interest payments on coins stored in the bank 120 billion from special events 809 billion from the scavenger enchantment 807 billion from skill level up rewards

85 billion from phishing and about 1.3 trillion from various other smaller sources the standout thing here is actually automated shipping if you don’t know what that is it’s an upgrade that can be added to minions these automatic resource generators that automatically sell what they create at a 50 to 90

Percent of the MPC price this adds up as these minions can produce millions of coins worth of items per day a lot of these twins can be from players who haven’t played in months suddenly coming back to a fortune in their minions but also just a lot of players have this

Apparently the 11.9 trillion from MPC selling is also expected as a result of the garden update it’s probable that this was even higher last month before the sale price Nerfs the coin sinks are a lot more varied these are 4.63 trillion from dungeon chests 3.32 trillion from auction fees and dark

Options most of which is from a special event in the dark option 1.88 trillion from a special event that no played pit event 1.55 trillion from MPC shops 1.01 trillion from Shen’s auctions 887 billion from pets including cat and golden dragons 831 billion in accessory Bank upgrades

At Jacobus 771 billion in bizarre taxes 563 billion in Slayer bosses 433 billion in bench size upgrades 385 billion and dying with coins I’ll be honest I did not expect this number to be this big just buy a booster to it is or don’t die carrying millions of coins 277 billion

From reforging and upgrading items and around 1.55 trillion from various smaller sources now to break dungeon chests down further just for some fun data 1.45 trillion spent on necron Bedrock chests 616 billion spent in Sudan’s Bedrock chests 457 billion spent in livids Bedrock chests 370 billion spent in necrons obsidian chests and 340

Billion spent in livid’s obsidian chests basically Bedrock chests are the king of coincidence and it made sense because they have the best loot another thing worth noting is what is believed to be the biggest coin sync in the game according to the developers players just quitting the game and never coming back

Or getting banned and wiped it’s impossible to know how much this accounts for Because unless someone is permanently banned or wiped there is always is the chance that someone will come back it’s also predetermined for people who are permanently leaving the game to give their items to their

Friends or give it all away and all of this just makes it very difficult to track because of this it’s probably a good idea to make sure the coins generated is higher than the coin synced at all times due to this unpredictability it’s worth noting as

Well that both of these stats do include the stats of Iron Man players who are Players whose profiles are locked to being unable to use the auction house and bizarre so any coins these players generate or send are never actually circulated in the autonomy with very limited expectations the last thing to

Note in terms of coin sync and generators is that engagement with drawing synths is very important the garden being the best way to make coins was problematic not only because it encouraged the MPC selling of trillions of coins worth of items but also because it meant players spent less time playing

Content designed to sing coins dungeons is a prime example of this as rewards cost points to claim same thing those coins and then players only get that value back from selling to other players which does not seem to or generate coins mating dungeons a massive coin sync if

Players are spending all their time in Constantine content or coin generating content problematic levels of inflation or deflation can occur so what was up with the start of stance at the beginning of the video well partially inflation you can see the price has gone up sharply since the guardian changes

But it was still several millions of coins way before then its value rather comes from the fact that it’s a completely unobtainable item anymore meaning it has very low Supply this Supply also decreases every single day as players who own the item get banned or twit for various unrelated reason the

Demand for this item comes from the fact that the item’s description States it may have some you is in the future it’s very speculative but it’s enough to get people interested to pay 5 million coins for one of these useless pieces of paper overall the economy seems a whole lot

More stable now than it was in the peak of the garden cross the inflation anyway largely due to the update hype dying down and the balance changes that were made as well as a new content update that brought players away from the garden managing virtual economies is a very difficult Balancing Act made

Possible only by collecting and constantly reviewing data about player activities I hope you’ve learned something about economies from this video even if a Minecraft server isn’t exactly the first place it’s better to learn about economics it was pretty fun to make it because I’m a bit of a data

Nerd and I love seeing all of this see ya and have a nice day