[bisq-network/proposals] Repay victims of the April 2020 security incident using BTC trading fees (#209)

[Chris Beams]

The proposal phase for Cycle 12 is almost over. I'd like to summarize where we are in this conversation and see if it's appropriate to submit this proposal to the DAO for an immediate vote.

Below, I will list each of the major sections of the proposal as laid out in the description above, and I'll summarize the areas where I believe we have consensus and where we don't.

### The DAO will repay victims for their losses

I believe we have consensus.

### The DAO will not repay victims immediately + The DAO will repay victims over time

I believe we have consensus.

### The DAO will repay victims using trading fees paid in BTC

I believe we have consensus.

### The DAO will repay victims directly using Bisq's Filter mechanism

This part is detailed in @chimp1984's original proposal at #205. I believe we have consensus on doing it this way.

### The DAO will repay victims the USD value of funds lost at time of theft

We do not yet have consensus here. The following counter-proposals are on the table:

1. In https://github.com/bisq-network/proposals/issues/209#issuecomment-613386563, victim @333shine argues that the DAO should pay out the exact amount of BTC lost to each victim, regardless of any movement in the BTC/USD price. The argument here is that Bisq's volume and therefore trading fees will likely increase with any increase in price, making it feasible to pay back the full amount. Multiple victims have indicated in the comments that if Bisq's trading fees do not increase accordingly, that they are fine waiting as long as it takes for the DAO to repay the original BTC amount lost.

2. @invertedbobb proposed in https://github.com/bisq-network/proposals/issues/205#issuecomment-612960276:
> I think extra effort can be made to attempt to make victims whole in their lost BTC amounts.
Surely this could mean it takes longer to achieve, and this can't and shouldn't be to infinity.
But there could be a time-window set within which extra payouts would be made to the victims to get to the lost amount of BTC.
> How about a double strategy? Using USD conversion first, when this results in the full amount of BTC being returned (lower btc price), all is good, if not (price is higher), the fees continue to get distributed for up to one or two years or until the BTC returned equals the losses.

**I suggest that we defer this decision by moving it to a separate proposal to be voted on in the next cycle (Cycle 13).** Doing so will allow us to approve everything else in this proposal and to get victim repayments started as quickly as possible. It will take many months in any case to get anywhere near repaying the full value, be it the original BTC amount lost or the BTC equivalent of the USD value of the funds lost at time of theft. As detailed in the proposal, we will track both of these values from the start, so we will be able to implement either decision.

### The DAO will repay victims as quickly as possible

I believe we have consensus on this section, with the exception of the following point:

> As a protection to ensure that the DAO is able to continue operating, it will pay victims 100% of BTC trading fee revenues so long as that figure does not exceed 40% of total revenues.

In https://github.com/bisq-network/proposals/issues/209#issuecomment-613289972, @MwithM counter-proposes the following:

> If monthly revenue increases to 100.000 instead of 30.000 USD, I don't see why Bisq should keep that 40% limit or not use the revenue increase to pay victims as soon as possible.
I would rather establish a minimum budget for Bisq survival and the rest, or at least a high amount of it, should be used to compensate the victims.

**Like with the section above, I believe we can defer this specific decision to a separate proposal to be voted on in Cycle 13.** The most important thing at this point is to develop the payment tracking mechanism and begin routing payments to victims as soon as possible.

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I will add notes to the original proposal text above indicating the sections where we do not have consensus, and where I suggest we defer decision-making to a subsequent proposal. I will then submit this proposal to the DAO such that it can be voted on immediately in Cycle 12.

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