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

pazza notifications at github.com
Tue Jul 6 18:51:05 CEST 2021


Following discussion earlier in the year. I prepared some financials based on standard accounting practices. Please note I don't have a background in finance.

Here are copies of what I produced for the fiscal year 20/21 (01.04.20 - 31.03.21)

- [Bisq - Balance Sheet -  Fiscal Year 20/21](https://docs.google.com/spreadsheets/d/1hpq01cjSFAkockRYLTCiLiPOYezlyxrqgfExKyrzeFM/edit?usp=sharing)
- [Bisq - Profit & Loss - Fiscal Year 20/21](https://docs.google.com/spreadsheets/d/1b6OkJmZwuxOit-x0zKBzag4VsfH2NPwUDOxFU0j9DWk/edit#gid=255820709)

Originally I included the total market cap of BSQ as an asset for the DAO, but based on negative feedback from @cbeams and @m52go on accounting this way I removed it in the above accounts.

**My observations**

My observations from doing the accounts are:

- In 2020/2021 Bisq was breaking even (The cash flow was $52k positive for the year) . This was due mainly to the fact that revenues where pretty much equal to contributor compensation claims.  Contribution costs were in part high due to the way BSQ compensation claims were based on a 90 day average during a bull cycle. This has no been reduced to 30 days and the price has been falling so it is less of a factor.
 
- The $52k positive cash flow does not take into consideration the security incident that that resulted in a loss of  ~$236k for the DAO.
 
- Maybe concerningly the security incident seems to have been overpaid by ~$71k in [USD denominated amounts](https://github.com/bisq-network/proposals/issues/249) when more than 5.2 BTC had been sent at a value of ~$59,000. Repayment amounts can be seen [here](https://github.com/bisq-network/projects/issues/31). The price fell shortly after meaning the USD equivalent has not been paid back. I am unaware of all the aspects of the repayments as I have not really been keeping tabs on the process, so I might missed something with regards to this.  
 
- I do not think accounting in USD is as helpful as accounting in BTC. As BTC is so volatile the information gets old quickly. These accounts were done when the price of BTC was $59,000. Comparing accounts year to year would make more sense if done in BTC terms. Essentially the USD figures are just dragged about by the price of BTC at fiscal year end.
 
- Trade reimbursements are high. It is not obvious from the BTC addresses what is reimbursement for fees vs arbitration (I imagine the bulk is funds that are sent to the arbitration address). It would be good to distinguish between the two. Having separate deposit address for BTC trade revenue and funds being sent prior to arbitration would be useful for accounting purposes. Currently I think trade fees and arbitration amounts can be sent to the same addresses. This would make it easier to see percent of people that pay in BSQ over BTC.
 
- Doing this makes me think an audit would be good at some point in the future.

- Whilst I am tempted to give an outlook for 21/22 fascial year based on these financials I would think it would be best to receive feedback first. however I do not think it would be controversial to say that if accounts are to be denominated in USD then the price of BTC will be highly correlated to Bisq's cash flow.

 **Answering questions for contributors, investors, and traders**

When sharing with @cbeams he felt the accounts did not answer the question posed here: https://github.com/bisq-network/bisq/discussions/5171#discussioncomment-370427

- How liquid is BSQ? 
- Will I be able to cover my expenses with the compensation I earn?
- How sound are the fundamentals of the Bisq DAO? 
- Is buying and holding BSQ likely to be a worthwhile investment?
- How liquid are the currency pairs I'm interested in trading?
- How quickly, and how much volume am I likely to be able to trade?
- How does the "total cost of trading" on Bisq compare to my other options (privacy premium + trading fees + mining fees)?
- Should I buy and use BSQ? 
- How much does my total cost of trading drop if I pay for my trading fees in BSQ vs BTC?
- Can I profit as a market maker? 
- How should I size and price my offers to optimize the likelihood of their being taken?

I agree these accounts do not answer the above questions. 

I think the answers to many of these questions can be found in Bisq. Maybe the information is best displayed in an automated way.

Happy to hear any comments / questions.

 

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