[bisq-network/proposals] Federated trade fee aggregators (#329)

sqrrm notifications at github.com
Sat Apr 24 15:38:05 CEST 2021


> _This is a Bisq Network proposal. Please familiarize yourself with the [submission and review process](https://bisq.wiki/Proposals)._

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This is an idea inspired by https://github.com/bisq-network/bisq/discussions/5418 and recollecting the issues with an off chain protocol as discussed in https://github.com/bisq-network/proposals/issues/32

### Problem
Trade fee transactions are low value transactions that cost a lot in mining fees and are difficult to handle. Currently they're paid as either BTC outputs to the burningman or by burning BSQ. Both cases cause extra costs on users, but the BTC case is the most problematic as it's causing small value txouts.

### Previously Discussed
It has been suggested that a third party could be part of trades to burn BSQ for trade fee and receive BTC as compensation as part of the trade transaction. This still doesn't eliminate the problem of low value txouts. 

Another related problem from the off chain trade protocol is to have a pool of locked up BSQ that could have a lien put on it to use as collateral for trades, problem here being that without a block chain it would be impossible to guarantee that the data is properly distributed on the network making it unreliable as collateral.

### Fee Aggregators
- A Bisq contributor puts up bonds to act as a fee aggregator (FA).
- Traders that want to use FAs put up a BSQ bond for the amount of fees the want to be able to aggregate. This bond is tied to a particular FA with a hash or some other data.

The FA acts as a notary during a trade. The peers connect to the respective peers FA to let them know how much trade fee they are paying, including trade id and amount. Then they connect to the peers FA to verify that the correct amount was assigned.

The FA keeps a record of credit for each bond assigning them as their FA. The users prove that they are the rightful owners of the bonds and can deduct up to the amount of the bond as fee payments. If a user want to reset their credit they can buy the credit from the FA as a Bisq trade, receiving the verification of credit reset in the form of BSQ burnt by the FA.

### Accountability
Traders can check with the counterparty's FA if fees are paid properly, this ensures that traders are paying fees. The verification from the FA is a signed statement from the FA.

FAs should continously publish a record of their outstanding credit, this could be a merkle tree with hashes of signed statements and associated values so that traders can verify that their payment is included. There might be other ways to handle this part better.

### Non FA Users
A trader with BSQ locked for usage with a FA could pay for a counterparty that doesn't have such an arrangement in exchange for BTC as part of the deposit tx.

If both users aren't setup with a FA this wouldn't work.

### Other Usages
Using a similar arrangement to solve the issue with the off chain trade protocol might work, but there's more at stake since the collateral is locked up and the corresponding "Collateral Aggregator" would have to post a much larger bond, I doubt it would be feasible.

### Summary
I think this could be a way to aggregate the fee payment for BSQ users and those that they trade with. It still doesn't solve the case where both traders want to pay the fee with BTC though.

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