[bisq-network/proposals] Distribute trade fees paid in BTC to victims if the recent security issue (#205)

ifarnung notifications at github.com
Thu Apr 9 17:46:24 UTC 2020


I like the idea that the DAO routes some portion of its revenue to pay back the victims. 

Adding a monthly budget expense of, for example, $20,000 on top of the $60,000 existing budget shouldn't break the BSQ market, though it will certainly influence it.  Victims could be issued BSQ that the burning man would buy from them at a weekly burning for let's say 10000 sats each to make the math simple.  Similar to the way the refund agent has priority in trading with the burning man, the victims would have priority to trade with the burning man and receive BTC.

I really don't like the idea of coding the distribution into the donation address:

- Overly complicated for one thing. (Sending and accounting for 1000s of tiny 5000 sat transactions?!)  

- Lack of control over the distribution process for another. And I reject the idea that it somehow wouldn't effect the price of BSQ.  

> "This would have the benefit to not force them into the BSQ ecosystem and does not directly add market pressure in case we would issue BSQ which would get sold to BTC by the victims and therefor could cause negative price dynamics. It is also easier to deal with as it does not add another exchange rate and its volatility risks."

An absence of buying (by the burning man) is the same as selling, as far as its effect on the price, they are equal.

- I know we don't have an exact number on the percent of BTC fee revenues but if it were 50-60% that would likely be too large a percent of monthly revenues to route to the victims. It would be too disruptive to the DAO budget in my eyes.

- There's no legal guarantee for making the victims whole from this attack, it's a decision (good I think) that the **DAO**  is making, right?  It's an investment in the DAO's reputation and marketing, so let the DAO handle it like business expense.  Bad precedent to be hooking up the donation address to various people, as well.



Unfortunately, this large loss is a dilution of the value of BSQ and therefore the exchange.  Just like burning BSQ concentrates the value of BSQ, raising it; issuing BSQ dilutes the value of BSQ.  The money reimbursed that could have been used to buy and burn BSQ but now will reside in the pocket of the attacker.

On a positive note, I think the DAO can overcome this hiccup and the quick response of the devs and the transparent response of the marketing team really gave me confidence in the project!



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