Auction House - It dictates the economy

The Auction House
A player controlled auction house usually controls the market economy. But because there are NPC generated items, this changes many aspects of the economy. If you make all the prices extremely high, only people who purchase silver or top-tier players will be able to purchase. If you only have high-end items on the market, once again, only top-tier/paying players will be able to afford them, and it unbalances the game and devalues the reward system from defeating high tier NPCs. It also unbalances endgame PvP when players have all their heroes decked out in R5-R6 gear from purchasing off DM market. But having an NPC generated market can be good, for both new and veteran players if done right - it also provides a silver removal system from the game.
Item Auctions
The first thing we need to balance is... well... all of it. We want the system to mimic an active community, to provide items for both new and veteran players. But we do not want a system that unbalances the game and creates items only for a certain class of players. As stated, we want to mimic a real economy. To do this we need random items of all levels and rarities to enter the market and reflect prices based on rarity and level. A level 12 item is not going to be the same value as a level 20 item (like currently, everything is just based at 2k silvers). So below is the system I have created to create a mirrored player economy.
To insert the items into the market, there should be 12 Dungeon Master auctions going for each category at any given time. To make sure players of every time zone have a chance, for each category insert 1 item every 2 hours with a 24 hours auction bid. So every two hours, each category has a new item. This may sound like a lot of items, but in reality, there will be a lot of "shit" items in the market because we use a wide range to mimic a real economy. Do not worry if a nice item slips through the cracks and gets listed, as the starting bid will be high, and players will sink their silver into it, along with them being rare to be listed - like in a real economy.
- Each category has 12 items at any given time.
- When one item sale ends, a new one begins, spaced every 2 hours, keeping a fluid rotation of items.
- Items have no buy-out price and last for 24 hours.
- Remove DM auction listing in chat, keep it for players.
- Example times of the 12 auctions ending/starting (12pm, 2pm, 4pm, 6pm, 8pm, 10pm, 12am, 2am, 4am, 6am, 8am, 10am)
Item Rarity
*Random 100
R1: (Exclude)
R2: 50%
R3: 30%
R4: 15% (95% chance rarity will be R4 and below)
R5: 4%
R6: 1%
Item Level
*Random 100
1 to 20: 5% chance a level (Equal chance for any level to generate)
Item Price

R2: 25 silver per level
R3: 50 silver per level
R4: 75 silver per level
R5: 100 silver per level
R6: 150 silver per level
Price/Level Example: 1 / 10 / 20
R2: 25 / 250 / 500
R3: 50 / 500 / 1000
R4: 75 / 750 / 1500
R5: 100/ 1000 / 2000
R6: 150/ 1500 / 3000
*Exclude following item categories:
XP Potion
Treasure Chest
Treasure Map
Transmute Item
Transmute Fighter
Crafting Resource
Gate Key
Repair Kit
Fighter Pet

Fighter Auctions
The same concept as items follows with fighters. But we do not want to flood the market quite as much with fighters. So some minor changes to the number and timing of the listings.
Hardcore:
- 3 fighters at any given time
- 1 fighter sale ends every 8 hours, and a new one begins.
- Example times of the 3 auctions ending/starting (12pm, 8pm, 4am)
Normal:
- 6 fighters at any given time
- 1 fighter sale ends every 4 hours, and a new one begins.
- Example times of the 6 auctions ending/starting (12pm, 4pm, 8pm, 12am, 4am)
Fighter Rarity
*Random 100
R1: 45%
R2: 30%
R3: 15% (90% chance rarity will be R3 and below)
R4: 5%
R5: 4%
R6: 1%
Fighter Race
*Random 1000
Human: 40.0%
Cultist: 25.0%
(Random) Giant: 10.0%
(Random) Golem: 10.0%
Skeleton: 04.0%
Zombie: 04.0%
Demon: 02.0%
Succubus: 02.0%
Lich: 02.0%
Dark Elf: 00.5%
Huppo: 00.4%
Vampire: 00.1% (1 in 1000 chance for Vampire)
Fighter Class
*Random 600 (Equal chance for any class)
Warrior: 10%
Mage: 10%
Archer: 10%
Rogue: 10%
Paladin: 10%
Healer: 10%
Fighter Level
*Random 1000
1: 15.00%
2: 12.00%
3: 11.00%
4: 10.00%
5: 09.0% (57% chance of fighter being lvl 5 and below)
6: 08.0%
7: 07.0%
8: 06.0%
9: 05.0%
10: 04.0% (87% chance of fighter being lvl 10 and below)
11: 03.0%
12: 02.5%
13: 02.0%
14: 01.5%
15: 01.25% (97.25% chance of fighter being lvl 15 and below)
16: 01.00%
17: 00.75% (99% chance of fighter being lvl 17 and below)
18: 00.5%
19: 00.3%
20: 00.2%
Fighter Price
(Level 1 base, +per/level)

R1: 1000 / 200
R2: 1250 / 225
R3: 1500 / 250
R4: 1750 / 500
R5: 2500 / 750
R6: 5000 / 1000
Price/Level Example: 1 / 10 / 20
R1: 1000 / 2800 / 4800
R2: 1250 / 3275 / 5525
R3: 1500 / 3750 / 6250
R4: 1750 / 6250 / 11250
R5: 2500 / 9250 / 16750
R6: 5000 / 14000 / 24000
Transmute Fighter DM Reward
I feel like this can be abused. It is a reward that is meant to be a prize for the player, not an opportunity to sell and profit. I would change the Transmute Fighter reward to be account bound, and free to claim. This will help anyone who wins it to change their fighters (to include new players), but will not allow them to profit off of it either (other than scrapping).
Player Market Listing
Currently, the player listing system is not that great. I can list as many items as I have inventory space for, and never really worry about a seller fee. I can just list junk, if it doesn't sell, oh well. Or I can list things for an absurd amount of silver (Check out my Vampire lol). We want to make sure players list only things they want to sell, and set a price that is real if it's worth listing. Additionally, once you have this balanced, freeing up space for unwanted items that are worth selling will not be exploited. To do this, set a fee at the time of listing. This ensures the player plans to sell the item otherwise they are just wasting silver. The buyout listing fee will make sure that a player doesn't list something at an insane price if he doesn't think he's not going to get it. The dual auction fee makes sure the player is not skipping out on his dues by choosing auction instead, depending on how high the item bids, it may save or cost him more. These fees upfront ensure that players cannot post items at an insane price to just get inventory space also. Additionally, Autobid needs to remove the total silver of the auto bid at the time of the auto bid, so a player cannot max auto bid every item to increase the cost - just to be a troll.
- 5% fee of auction starting price or 10% fee of buyout price at the time of listing. (Whichever one is higher)
- 5% additional fee at end of auction sale, of whatever price it ended at, even if not sold. (If buyout fee was not paid)
- Remove item from inventory when on market.
- At end of a sale, if item was not sold, return to inventory. (If inventory is over max, no new items can be acquired until space is made)
- Autobid removes total silver of auto bid from the player and any excess silver is returned at end of auction.
- Make minimum auction price scrap value of item.
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- Remove Guild auction fees
- Do not remove the item from inventory for guild listings

Thanks for taking the time to write this up. There was originally an auction fee, but people wanted it removed. I figured it was better to have more stuff for sale than less.
I don't really like the NPC auctions at all. They only exist as a silvers sink, but without a big enough community they go for too cheap.
I'm not sure they'll survive at all into the Dire Arena project, or will become very rare. Race Transformation potions will become "vanity only" and not created via the Dungeon Master system or NPC merchants.
I'll see what we have time to get in for the next HOD update.