<p>I really like the idea of burning (or perhaps donating) the output before asking for reimbursement. That makes this scheme viable and I would support that if we go this way. It's a nice way to get around the arbitrators and the incentives seem to align quite nicely.</p>
<p>Using an atomic setup tx would be nice but I don't see how that could work with the current bitcoin scripting as you mention. It doesn't seem possible to avoid relying on the target address, or in fact impossible in the case of burning the BTC.</p>
<p>The main question is for me if this is worth implementing and pushing out if there is going to be another big change to the trade protocol using bonds. Perhaps they could work in parallel as not everyone will want to use the bonded way. This proposal seems like the fastest way to get rid of the arbitrator however and that is a good thing.</p>

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