Iron Prairie: Another P2P Trading Exchange

The VC-backed start-up Sparter isn’t the only new entry in the real money trading (RMT) industry offering “peer-to-peer” trading. Iron Prairie, which launched in November 2006, also lets gamers trade virtual currency directly with one another and uses an escrow system to protect buyers and sellers. As with Sparter, much of the current inventory is being supplied by existing exchanges like IGE, EZGaming and TeamVIP.

The two companies have different backstories, however. While Sparter is managed by veteran game industry executives and funded by venture capitalists, Iron Prairie is the handiwork of two Indiana college students who spent a year developing the exchange and web site. “Our philosophy is that an open, transparent pricing mechanism is better than the current way to purchase virtual assets,” said co-founder Mike Shepard, who says Iron Prairie currently offers the ability to trade in WoW gold and will soon support Vanguard and Second Life.

Iron Prairie’s fee structure includes a $3.00 per transaction “trading fee” as well as an “exchange fee” that can run from 8 to 12 percent of the total transaction - meaning fees on a $50 sale would total at least $7. There’s a twist: the fees are borne by the buyer, rather than the seller (as is the case with many online marketplaces). As we noted in our posts about Sparter, gold suppliers are key to the success of these peer-to-peer platforms, and shifting the fees to the seller is one way of making the system more attractive to sellers.

Iron Prairie also offers graphs tracking pricing trends in major game currencies to help buyers and sellers trade with the latest information on market conditions. We’re seeing more sites offering pricing data on virtual currencies.