[bisq-network/proposals] Change way how we determine the BSQ rate for a DAO cycle (#270)

pazza notifications at github.com
Sun Oct 25 18:52:37 UTC 2020


I think this proposal is an improvement for both traders and contributors in that it ensures the price of BSQ is more closely tied to actual prices it is being bought and sold on BISQ, and less vulnerable to manipulation. 

To avoid subjectivity it would be useful to define how the price was determined from the 30/90 day average, and also how outliers where determined.

Using the 30 day average (adjusted after the outliers have been removed) would add more volatility to the BSQ price, but would give a more real time reflection of current prices. 

Using the 90 day average (adjusted after the outliers have been removed) would add more stability to the BSQ price, but would give a less accurate reflection of current prices. 

To take both into account would be a compromise if done in such a way that can be calculated, and is an objective measurement. For example: 

((30 day adjusted weighted volume BSQ/BTC price) + (30 day adjusted weighted volume BSQ/BTC price) / 2 )
This could then be converted to an BSQ/USD price.

The removal of outliers could also take into account the increased price someone might be willing to pay for a small amount of BSQ. A buyer of 10 BSQ will likely pay a significant increase on market price. Therefore, it would be useful to define what constitutes an outlier. I would suggest this could be calculated on the spread. Outliers would be defined as any offer which traded at a premium or discount to a given percentage spread from current mid market rate. NB: It would not be accurate in this instance to use the 30 or 90 day average, as they are in themselves made up of all the BSQ trades, including any self trades, test trades, trades attempting to manipulate the BSQ price. 


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