[bisq-network/proposals] Make burning man a tradebot and add BSQ auction market (#304)

Conza notifications at github.com
Sat Feb 6 14:08:03 CET 2021


> ### Auction market
> The trader creates an offer transaction where he sets the BSQ to be burned and the BTC they want to receive [1]. That relation defines the BSQ/BTC price of that offer. The trader signs his BSQ input with the SIGHASH_ALL | ANYONECANPAY sighash and post that transaction to the auction offerbook. The trader do not need to be online when the BM takes the offer.
> 
> ### BM takes offer
> The BM will select the best offer (best price) and sets the missing BTC input, signs the tx and publish the tx. If the trader would have spent the BSQ already it would be detected as the BSQ input would be invalid. Such offers would be removed automatically from the auction offerbook.
> 
> ### Trade schedule/algorithm
> The exact algorithm how the BM selects and at which schedule need to be further explored. But basic idea is that it tries at certain intervals and/or balance thresholds to fill the best offers with the available BTC funds. It calculates the price based on the required input and not with the BTC output as the miner fee and the BTC value of the burned BSQ need to be taken into account.

Very interesting. And great idea to consider. The technicalities go a bit over my head, but super intrigued from an economics perspective. 

What about mimicking bitcoin and looking towards for solution? Just putting some considerations out there. 

I'm not suggesting BSQ BM takes an offer roughly every 10 minutes... 
But maybe it relates to the amount sold within a certain period? So e.g. in the next DAO cycle there is 400k being issued... the portion the BM can sell during the period is a certain %? The timing of the offers accepted is adjusted based on how much of that % has been taken in this cycle? 

So someone buys a ton of BSQ from BM e.g. 10% of the allocated % for this DAO cycle - it adjusts to LESS frequent auctions?
If then less being bought etc. for a period of time, it then adjusts to MORE frequent auctions based on countdown to new DAO cycle and how much BSQ it has left? 

How this effects those who are rewarded BSQ for compensation/work would need to be considered i.e. if the supply increases now more than it otherwise would, then price will decrease as a result. So they're competing with BM?

Consistent supply increases (all else being equal) with a 0% premium? I suppose since it is an AUCTION and a long enough period, it would just tend towards the market rate then.



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