[bisq-network/bisq] Running the numbers on Bisq DAO revenues (#5171)

[pazza]

@chimp1984 
> Another important metric is the tradde volume. It was 53M USD in 2020.
If the above numbers of 10k+28k are correct we would have had 456k on fees (including victims payments) which would be an average 0.8% trade fee.

The 0.8% trade fee makes sense.

I think it would be good to choose a denomination for Bisq's unit of account. My preference would be to primarily account for things in BTC. Growth in trade volume / revenue could then be measured in terms of BTC. Fiat could then be applied secondarily to the figures to give comparisons.


@m52go 

> It's not particularly difficult to get some of this data, but it's tedious to put it all together, consistently, in a way that makes it informative. Whoever takes on this role will have this issue. The remaining tasks to automate reporting (as discussed last year) and make the information we have useful are largely technical and beyond my ability.
> 
> Therefore I think a better use of time would be to get whatever resources are needed to complete a dashboard integrated with mempool.space as proposed in [project 41](https://github.com/bisq-network/projects/issues/41) done.

I agree, that this will be a job that would be better if automated. I wonder if doing this manually first could help to guide the process as to what information is important to display. I think there are potentially a number of ways to account for the financial aspects of the DAO and it would be good to consolidate a standard way to account for the financials and them implement this into any future automation.

@cbeams

> wonderful to hear you'd be up for getting this new role started. Here are my thoughts on how to do it minimally and manageably:

I agree, I think keeping things simple would be best.

> Confine the role to accounting for Bisq's financial resources, but not for allocating them. Basically, the comptroller would not have decision making power about where funds go. Only about how we think about, account for and report on them (which is a lot!). That's what I like about the connotations around the "comptroller" versus "finance director"—the former really means "head of accounting", not more. Budget decision making is currently the domain of team leads (and ultimately DAO stakeholders through voting) and we can leave that status quo for now. The comptroller role can greatly help in this decision making process by feeding higher-quality data into it, but I think the comptroller should not have any direct power over the budget.

Understood thanks for explaining the distinction between roles. I do think there does need to be some discussion about finances and strategy to achieve agreed objectives, hopefully when the DAO financials are regularly updated it will allow for this discussion to occur.  

> Start simple. Come to consensus on just a few key accounting metrics that would really make a difference, and nail 'em. Systematize data collection for and reporting on those metrics, get them on a dashboard, see what impact they make, get feedback, refine them / move on to whatever makes most sense next.

Agreed

> So practically speaking, I'd suggest working toward consensus on those first key metrics here in this conversation, then post a proposal to create the new role, including initial rights and duties, bonding requirements (if any), a task list of stuff that will need to be done, e.g. creating a role issue, wiki doc and GH team for the role, and then just go for it implementing accounting and reporting on those metrics in whatever way makes the most sense.

Sounds good to me. I think prior to making a proposal I would like to have a go at creating some accounts. I think the process of creating them would help me answer the following:

- Am I able to do it?
- What information is required?
- What information is / is not accessible?

I agree it would be good to agree some key metrics in this thread to ensure the data gathered is of use.

> Once this kind of foundation in place, the role could be handed off to someone with even more domain experience to refine it, take it to the next level, etc. A lot of the value in this initial phase is just getting the ball rolling and establishing things, pushing past initial inertia, and you've proven very good at that, @pazza83, so certainly have my vote if you'd like to do it.

Sounds good. Happy to get started and then pass over to someone with more financial prowess than myself.

> For me, the first would be a single, USD-denominated monthly revenue number. Basically the number I was trying to get at in my original post that started this discussion. The Bisq DAO's "top line", if you will. We would naturally want to be able to drill down from that top line number to see details on how much of it is coming from BTC trading fees, BSQ trading fees, etc, but it would be so helpful to have a single, simple, rolled up number we can trust that tells us how much revenue Bisq is bringing in.

I agree it top line revenue should be included as a metric. However, I think revenue should be BTC-denominated for the reasons:
 
- BTC is the trading pair for everything on Bisq
- I think increasing BTC revenue should be the objective. Big increases in USD revenue look nice but can hide falls in BTC revenue. Increasing BTC revenue should be incentivized. Measuring this would be a good start.
- Comparisons in years, months, quarters would be best measured in BTC
- Thinking to the future I would rather look back a chart showing me the changes in BTC revenue over time than the changes in USD denominated revenue. Bisq no control over BTC/USD rates but it is very much in control of how much BTC is traded on the platform.

> follows that the second most important number would be our bottom line, showing how much (if any) is left over after expenses (including BTC victim repayments, BSQ issuance, etc).

I think this is the most important metric. Turnover is vanity profit is sanity but cash is king.

With regards cash is king. A third metric to measure is cash flow. Essentially each month is Bisq burning less or more BSQ than it is issuing. 

> I think it's a very interesting challenge to figure out how to make sense of all this. It's anything but "boring, run of the mill accounting" when considering all the nuances of the Bisq DAO and the various unprecedented ways in which this organization runs.

Yes, I think it would be really interesting, the tokenomics involved are fascinating. I think I would like to apply standard accounting techniques to Bisq and see how far they get me and then see what needs adjusting to make something that works for Bisq.



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