[bisq-network/proposals] Burn BSQ to pay for trading fees (#281)

MwithM notifications at github.com
Wed Nov 18 09:04:26 CET 2020


> How would it work for different types of traders? E.g. The casual trader who does 1 or 2 small trades a month would pay much more if there is only a fixed fee/month as the pro trader who trades large amounts and volume. Now our main revenue comes from large XMR trades so as that would not be bound to the trade amount it would also make it more expensive for fiat traders and much cheaper for those pro traders.

XMR whales are the main beneficiaries of the proposal in the current state (free trade), and that not be good for Bisq as at the end of the "day" they will be paying less total fees than they currently are, while extra volume would not be generating extra fees if they trade mostly just between them. An option to mitigate this could be to make them bid in an auction for this tickets and offer just a few (2-5 tickets per month) so it would act like a Market Maker discount.
Let's say that Bisq offers 2 tickets and I pay 50USD/month in fees. I would offer 40 USD to get this ticket, another trader would offer 60 USD and another only 30 USD. Me and the second bid would win this tickets while outbidding the third bidder, and for that month, we would be offering better deals to the rest of the market as we know the more we trade, the less we pay in fees, increasing total volume and probably total revenue in fees. If we think we can estimate the price for this tickets, the auction won't be necessary, but I think that for free trading, this tickets should be scarce. The auction has positive outcomes, but also negative, like preserving trader's privacy (traders locking the bond for the DAO to destroy biggest bids is a possibility within the DAO, but that process would require 2 cycles and losing bidders would have locked BSQ for nothing).
Another option would be to implement this only for low volume markets  which, to me, is any except XMR as XMR generates most of the volume. Again, if the tickets are scarce, we should not worry if one "privileged" trader gets free trading as long as he increases total volume which will benefit other traders and probably overall revenue.

Overall, a fee decrease for those who pay for the tickets would work much better. Any extra trade that ticket owners generate will be extra volume for the market and extra revenue for the DAO, while still decreasing BSQ exposure for traders. Something like paying 10USD in BSQ to get a 10% fee reduction and paying 50 USD to get a 20% fee reduction (paid either in BTC or BSQ) removes the bad incentives that 0 fee trading would generate as now there's a different offer for occasional and big traders so small traders can still directly benefit. 
Please, don't consider this exact numbers, they're too rough just to show my point. Maybe there's no way for smaller traders who only spend a couple USD per month to benefit from this, unless we extend the period of the ticket duration.
On the bad side, fees, specially due to BSQ price volatility, are already hard enough to understand and explaining this system will take a lot of time.

BTW, I just also realized that this could be a way to stop paying mining fees for trading fee tx while no trading fee tx or 1 single tx trading protocol is implemented.

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