[bisq-network/proposals] Implement budgeting and improve reporting (#158)

Tue Dec 24 00:29:51 UTC 2019

Thanks @m52go for the proposal! I agree to all your points.

Looking at the BSQ market we are declining on a dangerous path where negative feedback can become an existential threat. Lower BSQ/USD rate means higher compensation amounts, which means higher inflation and with that lower incentive to hold BSQ as investment. We have to avoid further decline on that path.

Here are the numbers of the past 4 cycles: 
Cycle 6 is 1.00 USD
Cycle 7 is 0.79 USD
Cycle 8 is 0.81 USD
Cycle 9 is 0.67 USD

How can we get out of that negative cycle?
- Cutting costs
- Increasing trade volume and with that revenue

I would like to discuss an additional idea to what @m52go has brought up above:
Freezing expenses to a minimum until we have a more solid management with clear targets and checks if expenses are justified. 
Those who are motived to make Bisq successful will have a strong incentive to get that management problem solved as soon as possible. I fear otherwise the process to get back on track might take too long.

Before looking how we can cut expenses lets look first to the numbers of the last cycle.

<img width="860" alt="Screen Shot 2019-12-23 at 19 27 38" src="https://user-images.githubusercontent.com/54558767/71386238-682ac680-25ba-11ea-9b75-8cae884d7cf5.png">

Here is an overview of our costs from cyle 8 by category (some requests contained mixed categories, I tried to find out which was the dominant one and used that in the assignment):

Techincal:	
Development: 86862
Infrastructure (seed ndoes,...): 6800
Testing: 4539.51
SUM: 98201.51

Communications:	
Translations: 9864.27
Communications: 8517
Webpage: 1300
SUM: 19681.27

Support:	
Mediation: 5200
Burningman (not perfect category here...): 1000
SUM: 6200

Refund agent: 27210 (the refund agent must be excluded as the reimbursement is equivalent from the burned BSQ from trades ending up in arbitration, so its zero sum ignoring volatility risk)

Here is an attempt to find our minimum required expenses to keep operation of Bisq healthy and to be able to grow trade volume (requires investment).

Min. costs infrastructure (using 100 BSQ for a heavy node and 20 BSQ for a light node, not sure if that is too low):	
8 Seed nodes: 800
12 BTC nodes:1200
5 Price nodes: 100
3 BSQ explorer: 300
1 notification relay: 20
1 market server: 100
SUM:2520

Min. costs development:		
Release: 3000 (for shipping most recent data we need a release at least every 4-6 weeks)
Release testing: 1000 (if no new features are released test effort should be low)	
Bugfixing: 5000 (investment to bring support costs down and user experience up)
SUM: 9000		

Min. costs support:	 
2 Mediators: 10000 (1 mediator did not made his request this cycle) - to get down the costs we need to improve support and fix bugs		
Burningman: 1000		
3 Support agents: 6000 (we have to improve here, so no cuts but investment)			
SUM: 17000		

Min. costs communications:
Webpage: 1000 (minimum which directly helps with management and growth)
Get the word out to increasse volume: 5000	(we have to improve here, so no cuts but investment, but we have to ensure quality and strategy is correct)		 
SUM: 6000	

Min. costs translations:
I would suggest to make a complete stop on translations expenses for the time until the revenue is back	on track

Total costs: 34520	

This is still way above the current revenue which is roughly 12000 USD assuming 0.4% trade fee for the 422 BTC volume of the past 4 weeks. To get a more correct number should be an investment for improving our management tools.

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