[bisq-network/bisq] Adopt fee model to de-incentivize offers with huge market price distance (#4630)

[pazza]

I am guilty of having over 100+ offers on Bisq live on the platform at the moment. The offers have deviations from market price between 6-50%. 

I have always thought that having more liquidity would be good for Bisq. My general trading strategy has been when an offer is taken I put two in it's place. I see this a positive thing for Bisq. If one person wants to take an offer chances are other people will also take the offer. 

In the last month offers have been taken at all deviations 6-50%. Generally the smaller the offer the higher the %. The most popular offers are at the lower percentages but so far pretty much everything has been taken at some point.

When calculating the percentage I factor in any of the following; transfer fees, mining fees, mixing fees, BSQ fees, crypto exchange fees, currency exchange fee, drift fees (upwards volatility), and what profit I am seeking. It might be surprising but I can ascertain to the fact, when taking in all those factors, there is very little profit selling small amounts of BTC as high percentages.

For example selling 0.001 BTC at 30% over market value gives a profit in $'s of about $2.2 dollars. I see trades like this as providing a service to the community rather than profit seeking (I see comments occasionally on Reddit, Telegram, Keybase etc with people mentioning high percentages, but i do always think that they are not aware of the costs. If someone tries selling 0.001 BTC at 10% over market value, after all fees, they will be making a loss and giving themselves lots of work!!).

The reason I have some low offers like this is that I figured that when someone is new to Bisq, new to a market, or using a new payment method they might want to try out a small trade first to make sure the process works well for them before moving to larger trades (for example a new bank account might be more likely to have incorrectly entered details or put funds on hold). At least a couple of low offers like this will be taken each week. I have always had positive experience when communicating with buyers through trader chat. Most of them are thankful of getting signed for a low price (when purchasing over 0.0025 BTC) or excited about their first purchase and asking questions relating the the trading protocol. I always try and be as friendly and helpful as possible with these buyers. I want to give them a positive first experience of Bisq. I feel this personal touch is a big differentiating factor that Bisq has over a big exchange. >From my perspective I see these offers as being helpful to growing Bisq. Sometimes I even sell BTC at a loss just to test out a new market or payment method myself.  

I have never associated an increase in offers to be bad for Bisq. I did not know/think about the resources required from the seed nodes. Maybe their could be more education about this in the Wiki or other channels. I think I would have thought differently about putting on offers in new markets if I thought that there would be a detrimental impact on the Bisq network. I just never thought this would be the case. I saw it similar to how I might put an offer on an exchange to buy BTC at a price well below what it currently trades at in the hope it would dip at some point. I still have offers on exchanges from BTC at around $4,000 per BTC. I just leave them there in case a big crash happens when I am unable to trade. 

When I look at the total offer book at the moment I see that there is a total of 59 BTC available to trade. Surely for Bisq to become successful this needs to increase exponentially. I think incentivising market makers to add more offers will help Bisq to grow. I also think as the market grows the spreads will narrow and become more competitive. Hopefully the resources need to sustain an increase in an order of magnitude for example 5,000 offers with a total of 600 BTC will be funded by the increase in trading fees.

I think the proposal to de-incentivize offers with huge market price distance will have a negative impact on new users of Bisq that want to trade a small amount of BTC and get accustomed with the platform before moving to larger trades. 

With regards lowering the trade deviation from market price to something more like 25%, at current prices/fees would result in my lowest offer of BTC for sale at 0.003. This is fine is that is what the community wants. But that would make the lowest purchase amount at being $35 dollars. I think a new user, or someone with a new payment method, might want to start lower than this. I know I would.

My preference would be to let the market decide. The most common amount of BTC that people buy from myself is 0.01, for this reason that makes up the bulk of my offers at around 6-10% over market price. 

I think the question that should be asked is how can Bisq grow the order book exponentially and, therefore, increase fees to the DAO and decrease the cost resources as a percentage of book value.  

I really like Bisq. I think it is the best way that someone can buy and sell BTC.  I want the platform to grow and become successful so thought it would be helpful to share my thoughts. 

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