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

chimp1984 notifications at github.com
Fri Apr 10 15:29:14 UTC 2020

> by having untrusted people control the Bisq donation address

The filter is operated by a highly trusted and bonded core contributor. 

> having to program this into the new filter implementation seems non-trivial

See PR. Its pretty straight forward and I consider it low risk.

> whoever maintains the filter now single-handledly controls Bisq's revenue stream.

Any abuse would be detected quickly and would lead to confiscation request of the bond. It is only the BTC fees not the BSQ fees, so not 100% of revenue stream.

> 2. If the burning man doesn't buy BSQ off the market and burn it, this will have the same exact effect as if we simply issue BSQ to victims and they sell it on the market. These market forces cancel each other out, 

Theoretically yes, but in practice we have seen in the past that some past contributors have crashed the market by selling far below market price as they wanted to sell quickly larger amounts. That led to the super low BSQ price a couple of months ago. The burningman takes the best offer and does not create dump offers, so the impact on the market between a BM buying BSQ at best price and a victim trying to sell off as quickly as possible with maybe a 50% discount are not the same and indeed very dangerous to crash the BSQ market another time, and this time even harder as amounts are larger.

> 3. Instead, I think we should simply issue BSQ to the victims as any other reimbursement request, but split up the amount over X monthly payments, to spread out the cost over time. For example, if there is $240K to be paid out, that would be $20K per month for 12 months, which would represent 1/3 of our current budget. It would be painful, but we could make it work. The burning man can prioritize buying BSQ from the victims each month at the issuance price, to make them whole in BTC as BTC, and everyone would be happy in the end, without having to modify any code.

I have no problem using BSQ and no problem with the inflation, we just need to avoid sell-off risk and volatility risks and that is not trivial.

Using the BM here might be problematic from an coordination perspective (he takes best offer, what if victim set up an offer with best price but then not being online and another trader adds an offer with better price? Should BM wait and delay and complicate trade process until victim is back and adjusted his price or should he take the not-best price offer and therefore introduce new risks that victims might game that? Also adding anything to BM seems a bad idea, we want to get rid of him not extend his role. 

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