Chess Elo Trading

Ok before you read this I want you to know this sounds weird to me as well.

Lichess is a place where chess players exchange elo points over the board and as a result chess value is exchanged in what we could call a chess elo trading transaction. When you place a challenge you are actually placing a trade on the exchange and when someone accepts it they are offering to hold up the other side of that trade. (the traders among you will know what I'm saying here). The analogy doesn't stop there, when we compete in an Arena tournament we are buying an exchange-traded fund (EFT) which when the trade is complete (the tournament is ended) leaves us with a net Elo loss/gain. The swiss tournaments are scheduled and more like mutual funds which also when trade completed (the tournament ends) leaves us with profit or loss in Elo.

Anyway, why am I making this comparison to Lichess and trading? It is because we can create our own chess trading value system and use the stats and measures that are used in trading which might make lichess even more exciting.

Imagine a cryptocurrency called the Lichess coin or token that follows your elo proportionally and gets added to by your change in elo but also you can exchange between another lichess user. You create a chess monetary system driven by chess performances.

What would be the function of this chess money, the Lichess coin or token? Well you could buy and sell things between each other. We could place bets on players, tournament results and chess outcomes (total number of moves, how many pieces left, tournament performance rating ranges etc) This could add a really fun side to Lichess.

The beauty of all this is it would be based on Lichess user activity and not on real money but it would create value and grow the site in new and wonderful ways.

Don't be too harsh on me I'm a visionary lol

i don't really see the point. The rating system is not a trade. It's a mathematical model which is used to show the level of strength between a player A and a player B.
Also, I don't understand what would be the point of a lichess currency. From what I've understood, the higher your glicko2, the higher your capital in term of lichess currency. So it's basically the same thing. A player with a 2600 rating would have a bigger capital than a 1700. This is not how it works in our world. Rating is different from wealth and I don't understand why you would have access to more things if you have a bigger capital. The goal of lichess is to promote chess by making it free for everyone and make it accessable for anyone. A wealth system will for sure create a gap of inequalities.

It is based on probabilties, you cannot "trade" them.

@Sarg0n I assume you either didn’t read what I wrote or you don’t understand it. Trading is an analogy here. Elo have a probability distribution called the normal distribution and trading assets have a probability distribution called a stochastic distribution.

I’m happy to explain how the Elo distribution is only an approximation of chess performances and how a vector based distribution based on normal distribution, Bayesian distribution and stochastic distribution is probably more realistic. Professor Ken Regan discussed something akin to this and agreed it was a better model.

It is going crazier and crazier. There is no value behind "virtual coins" or "virtual tokens". I can give you 8 cent or 50.000 US-Dollars for your "Lichchess token" but there is no value. We live in times where people don't know the difference between price and value.

Virtual tokens are the new tulip bulbs.
en.wikipedia.org/wiki/Tulip_mania
"At the peak of tulip mania, in February 1637, some single tulip bulbs sold for more than 10 times the annual income of a skilled artisan."
This sounds like 2021.

We need a discussion what value is. And we need a discussion what determines a currency. It isn't a coincidence that e. g. US-Dollar and Euro are stable but "virtual tokens" have an enormous volatility.

The most important quote when it comes to investing:
"People lose money in the markets because they let their emotions, mainly fear and greed, drive their investing."
www.thebalance.com/why-people-lose-money-in-the-market-4144737

So it is very important to know the difference between value and price. I don't work e. g. one year to buy one virtual tulip bulb. Currently, there is a high price for virtual tulip bulbs but not a high value. This is very dangerous.

@Meriten I think you launched into a discussion about a virtual token that nobody but you is having. The post is about the idea of setting up a meme economy based on trading. We (Lichess) partly do this with the trends for Elo and highs and lows. The challenges being matched like bid/offer in a transactions on an exchange. It is a way to make Lichess more interesting to some people like a customisable theme or skin.

The Lichess token is just a counter to measure the activity of each Lichess user.

Don't take this so seriously try to read what i'm actually saying versus what you think or what me to be saying.

I do understand the difference between value and price but I don't think people understand the difference between social value and virtual currency. Happy to help you there if need be.

the thing is, with your virtual currency, what would you be able to to pay for? a currency is useful when there is a market but I don't see any market available. And how would you gain money? By being good? But this site is used for improvement. So if a 2800 has more money than a 1300 due to his high rating, there's no point since he's already a top level Super GM who tries to find his weaknesses by himself. While the 1300 would need help if he/she wants to improve at the game. And at this level, you need external assistance (ej: a coach or books). I can more or less say that one doesn't need at 2500 (rapid) minimum and even there, you still need some help.