[bisq-network/proposals] Cap max reimbursement from peers security deposit (#292)

chimp1984 notifications at github.com
Tue Feb 2 02:13:47 CET 2021


Following the discussion at https://github.com/bisq-network/support/issues/684 @spx4000 brought up some valid concern we should address. 
It is a bit off-topic to the proposal but I think it still fits into the wider problem field.

So due the volatility risks there is a risk that DAO reimbursements could be abused to get a free option on BSQ.
@spx4000 suggested to use a higher BSQ price and a guarantee that the burningman (BM) is trading those BSQ to that rate to reimburse the BTC. 
But that would cause a lot of distortion to the BSQ price.

What if we remove the agreement that the BM trades with the trader and to use the reimbursement price?
So the BM would buy BSQ asap after he received the BTC on the market to market price and burns those.
Later once the trader get issued his BSQ with 30 day average price he might be lucky that market price might be higher so he can sell to a better price and make some profit or if not lucky and price has fallen he would lose something in case he sells or keep the BSQ.

>From the DAO perspective the DAO got burned 60k BSQ (at 2 BTC trade with 1 BSQ=1 USD). 
If price go up to 2 USD the trader receives 30k BSQ so for the DAO its positive as 60k got burned but only 30k got issued. 
If price goes down its the other way around and the DAO makes have issued more than it has burned. 

I think to go back to that original model where there is no agreement that the trader can trade with the BM to a defined price solves all those problems and distributes volatility risk equally to traders and DAO. 


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