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Third level of colonists living on an island, can be accessed after getting enough Vassals (1500). Most buildings at this level requires wood, stone and tools. You need 250 merchants before you can create trade ships for buying goods. Also, you need 1000 merchants to create level 2 ships (with increased cargo capacity and item slots). Not to be confused with the Merchant.

In addition to Vassals' needs, Merchants require:

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