[bisq-network/proposals] Replace burningman and refund agent by market place based solutions (#259)

[MwithM]

I'll start the discussion of this fundamental proposal:

About getting rid of arbitrator:

- What info will those bidding for dispute cases will have? This solution works good for altcoin markets, where arbitration doesn't need much info, but I don't see it optimal for fiat trades.
- I think there's a chance that a trader could fake a dispute (selftrading) to take advantage of the reimbursement claim market, buying his own trades and just taking profit from the extra BSQ for this "refund agent" service. "Closed envelope" bidding could mitigate that issue, because he could lose the auction. Leaving some of the delayed payout funds at the DAO address and making them not refundable as a kind of fee should eliminate it, but it would hurt honest traders that needs to be refunded.

Getting rid of burning man sounds so good, that's the main central point of failure at Bisq. He does two functions:

- Buy BSQ with BTC fees and burn them:
I think I did not understand completely this part of the proposal: Traders willing to pay fees in BTC should find an offer for the exact amount of BTC to be able tomake or take an offer? Even when these trading fees are equivalent to a tiny amount like 0.3USD?

I suppose it's not possible, because otherwise it would already have been done, but let me think out loud: if there was a way to pre-pay fees with a BSQ proof of burn, it would be amazing. It would allow traders to forget about BSQ volatility and Bisq to make certain promotions like "80% discount in trading fees for this low trading volume market during X period". I suppose this feature would face similar difficulties as the Bisq v2 project.

- Convert BTC trading funds from delayed payouts to BSQ and burn them

This is the most critical function of the burningman, as he can attack Bisq just creating his own sell BTC offers and wait to trigger the locktime transaction with trading funds and security deposit to him.
I still don't get how matching offers should work, but at least in this case it will be worth to take this offers as they're not tiny.

@ifarnung proposal #148 had a possible solution that could reduce slippage at illiquid markets. Something similar will be used for RSK's Money on Chain [Token exchange platform](https://medium.com/moneyonchain/introduction-to-money-on-chains-decentralized-token-exchange-on-rsk-platform-e609d07698a1). That could work for the 2nd function of the burningman, but the first function (burn BTC trading fees) should be something instant to not delay trades. Keeping a DAO address holder who only burns BSQ trading fees is not a security thread, so that's a possibility.
As said on Farnung's proposal, it would require a completely new trading protocol, but this kind of auctions should be also needed for replacing the refund agent, so the effort might be worth.

-- 
You are receiving this because you are subscribed to this thread.
Reply to this email directly or view it on GitHub:
https://github.com/bisq-network/proposals/issues/259#issuecomment-692829401
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://lists.bisq.network/pipermail/bisq-github/attachments/20200915/934839b2/attachment.html>