I play ROTMG, and yes, the economy is entirely player-generated. The primary currency is potions that are used for increasing stats. The sink for them is, well, drinking them to increase your stats.
As a game designer tip, if you have a high-level consumable used as a barter good, and you want to create trade demand for a secondary currency, then stick a vendor in the world who, for example gives you one of those potions for 10000 gems. Now, gems become the more easily traded commodity, replacing the potions themselves.
Yeah it's actually a really interesting theory called faucet-and-sink. Faucets are phat lewt and sinks are awesome NPC merchants or housing stuff. It's entirely too complicated for me to wrap my head around in a single sitting but probably something I need to learn if I'm going to hop into the MMO game someday.
Another thing to keep in mind is what some people are calling the "landfill" tactic. Balancing a player-driven economy is
hard and not actually worth the effort vs the reward you get as a designer. (in Ultima Online, nobody actually knew about all the intricate systems they designed because players broke the natural in game systems within hours of launch).
"landfill" is where you make one tier of premium gear, that say needs "gold + diamonds" ("gold" being the free to play currency), then you release another tier of gear, which is effectively recolors of the last level but +1 on everything. And that tier has a new currency, "rubies". This effectively "soft resets" the economy, since nobody has any rubies. So you have a "gold rush" a "diamond rush" and a "ruby rush" and so on, and you only need to do short-term balancing in any case.