There was something of a brief scare today on the Second Life Lindex after the Linden Dollar’s sell price jumped over 15% from the previous day’s rate, sparking fear of a run on the currency exchange as the best buy rate rose to L$300/1USD$, up from L$264 the day before.

Retailer confidence in the market started to waver as some stores started to ask questions about product prices, pondering raising them to match the lower value they were getting when cashing out.

The large shift in the value of the Linden represents the biggest change in the Lindex noted, and some think is a reaction to the recent layoffs at Linden Lab, instilling a lack of confidence in the future of Second Life.  A change of more than 10% in the Linden value is rare, and triggers a halt in the market trading, though it is unclear if this happened today.

Summer in the Northern hemisphere is generally a slower period for the Second Life economy anyway, and the current poor exchange rates in the Euro and British Pound against the US Dollar do little to encourage buying of Second Life currency.

As a result, the lack of demand in buying Linden Dollars means the value of the virtual currency drops, and anyone who is buying will get more Lindens for their money. While this is good for those who are purchasing, it poses a problem for those who are trying to cash out, as they will struggle to get as much money for their Linden. If the Linden Dollar is weak, they get less real life currency when they cash out, and that leaves them questioning their product prices, as the US Dollar cost of tier stays the same regardless of the in world economy.

The market took a turn for the worse when the number of Lindens for sale greatly outweighed the number being sold – this leads to volatile imbalance as others start to question if they should be keeping their money in world or joining the crowds and getting out while they can still get a decent return back.

Rumours started to push that parties were purposefully manipulating the market by putting large amounts (in the millions of Linden Dollars) on for sale at inflated rates, only to cancel the orders later in order to encourage a run on the market.

The Sell price of the Linden Dollar has stabilised back down to around L$260 so it’d appear the run has failed, though speculators are trying their luck and still have orders placed at inflated rates.

Though it’s unclear what happened today at the moment, but the fact the Lindex has settled down suggests it was only a blip. Whether one of SL’s major land merchants has pulled their Linden cash reserves out or someone simply wanted to play God with the Second Life economy, it’s certainly a reminder that if you have a few million Linden Dollars to spare, you can certainly have an impact on what happens.