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Improve incentives for Arbitrator (formerly known as Refund Agent) #222

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cbeams opened this issue May 18, 2020 · 8 comments
Closed

Improve incentives for Arbitrator (formerly known as Refund Agent) #222

cbeams opened this issue May 18, 2020 · 8 comments
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@cbeams
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cbeams commented May 18, 2020

This is a Bisq Network proposal. Please familiarize yourself with the submission and review process.

Background

The Arbitrator role (bisq-network/roles#93) often requires large outlays of both BTC and BSQ, putting the person playing that role at significant risk without much incentive for doing it.

Proposal

Proposed is that we improve incentives for this role by establishing:

  • a 50 USD per case fee, and
  • a 1% per cycle interest rate for BTC paid out.

Example

Let's assume that during Cycle 13, the arbitrator handled 8 cases, paying out a total of 4 BTC. Under the proposed incentive scheme, the arbitrator would be entitled to 8x50 = 400 USD plus 4*0.01 = 0.04 BTC.

Let's assume the posted USD / BSQ exchange rate for Cycle 13 is 0.63 USD / BSQ. This means that the arbitrator would be entitled to 400/0.63 = 635 BSQ.

And let's assume the current 30-day BTC / BSQ exchange rate is 0.00007553. This means that the arbitrator is entitled to 0.04/0.00007553=530 BSQ.

Total compensation requested in this example would be 635+530=1165 BSQ.

Benefits

The main benefit is to ensure the arbitrator is sufficiently compensated for their time and risk, such that they continue performing the role. A secondary benefit is that these higher values should incentivize the DAO to reduce the number of trades that go to arbitration. Ultimately we want to do away with the role entirely, and have traders submit reimbursement requests manually, but that can only happen when there are a sufficiently low number of arbitration cases per month. It's still too high to do this.

Notes

@RefundAgent already submitted a compensation request for Cycle 13 (bisq-network/compensation#571) based on this scheme proposed here. If you vote to approve this proposal, you should also vote to approve for that compensation request and vice versa.

@cbeams cbeams added a:proposal https://bisq.wiki/Proposals re:roles re:compensation labels May 18, 2020
@cbeams cbeams self-assigned this May 18, 2020
@cbeams
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cbeams commented May 18, 2020

DAO proposal txid: e56ae10d2f0f3232b019a0ffa954095fc6a3792e1a0b0be2bce0582d542987b0

@clearwater-trust
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clearwater-trust commented May 18, 2020

Did we find a new person to perform this role?

@wiz
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wiz commented Jun 13, 2020

While I can see why we might need to do this temporarily, I would really like to see a more general discussion about how we can fix the overall Arbitration system in Bisq to consider the currently unhandled case of an unresponsive trade counterparty.

@cbeams
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cbeams commented Jun 17, 2020

@clearwater-trust wrote:

Did we find a new person to perform this role?

We did not.

@wiz wrote:

While I can see why we might need to do this temporarily, I would really like to see a more general discussion about how we can fix the overall Arbitration system in Bisq to consider the currently unhandled case of an unresponsive trade counterparty.

Agreed. That work needs to be defined and prioritized.

@cbeams
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cbeams commented Jun 17, 2020

Closing as approved in DAO Cycle 13 (100% approval).

@clearwater-trust
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clearwater-trust commented Jun 17, 2020

Thank you @cbeams and @wiz. Where/how is the best way to discuss improving Bisq Arbitration that won't spam everybody with my/your "decentralization" propaganda 😄 . How can we discuss improvements?

@cbeams
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cbeams commented Jun 17, 2020

How can we discuss improvements?

This is really an open question; we have many communication channels / options, but each have their pros and cons, and it's not really obvious where best to have such a discussion. See https://github.com/orgs/bisq-network/teams/dao/discussions/1, where I discussed these options a bit.

@cbeams
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cbeams commented Jun 20, 2020

How can we discuss improvements?

This is really an open question; we have many communication channels / options, but each have their pros and cons, and it's not really obvious where best to have such a discussion. See https://github.com/orgs/bisq-network/teams/dao/discussions/1, where I discussed these options a bit.

For more on this topic, see #231 (comment), where I've suggested the creation of a bisq-dev email list.

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