[bisq-network/proposals] Used burned BSQ to become a fee receiver (Issue #359)

[chimp1984]

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An alternative, better idea to https://github.com/bisq-network/proposals/issues/358 is to burn BSQ and use that for giving the right  to receive trade fees. This could be done for BTC fees in Bisq (instead of using the burningman) as well for any new trade protocol where BTC or BSQ is not part of the trade (e.g. Liquid).

When burning BSQ one can attach a hash to the opReturn data. One can put the receiver address (e.g. BTC address for Bisq BTC fees or L-BTC address when used for swaps on Liquid) as pre-image for that hash, so there is a proof of the creator of the burn tx about the address. Additionally the address is published to the P2P network. 
Alternatively we could put the address directly into the opReturn avoiding the need for the distribution on the P2P network. Would need to look if there are any issues to use the address directly in the opReturn data, I guess not.

Any DAO node can collect those burn BSQ txs and use those for the weighted probabilistic fee payment.


That way the burningman role can be decentralised and anyone can take part.
The difference though is that they have to burn up-front and receive the fees later and there is no guarantee that the fee payments will exceed the burned BSQ. It will depend on the participation as well and it might be hard to estimate but it should regulate itself over time. If it's not profitable people will stop doing it so there will be less participants and revenue will increase, attracting more participants again.

There can be some policies applied like a decay function over time or that it's just valid for a certain duration. E.g. your burned BSQ decays linearly to zero over the time of 6 months. Actually the shorter that period the faster the pool auto-regulates itself so that its sufficiently profitable. So probably better to have rather smaller amounts with shorter time scopes.

Similar ideas have been discussed in the past but not followed further. Now with the open questions how to distribute trade fees to the DAO for Bisq 2 protocols which do not fit into the BTC/BSQ fee model, I think that idea should be reconsidered.


 




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