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Do not pay out the security deposit of the trade peer to the arbitration case winner #386
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Tangentially to this, maybe to potential reduce the number of non responsive peers taking cases all the way to arbitration maybe it would be a good idea to ban the onion addresses of non responsive peers post arbitration. Should the above proposal be implemented non responsive peers would be even more of an inconvenience to traders using Bisq then they are currently. |
I am in favor of this should #390 be accepted. I think that traders however should be able to claim back reimbursement for any mining fees / trading fees for these trades so they are not out of pocket. They could do this using the same process that is in place for failed trades. |
@jmacxx Would you be available for implementing the required changes in the arbitration payout screens? |
Yes. |
I agree with the need of this proposal, but seeing that even after getting the security deposit some traders are upset, Bisq needs to explain why this is necessary a lot. There are some trades that end into arbitration due to a bug or something else, where there is no winner. How should I proceed with those?
It wouldn't be very helpful, unresponsive traders don't use the same onion address. They must stop using Bisq after losing funds.
I find this messy for traders. I consider the amount of trading and mining small enough to be reimbursed by refund agent, it would suppose a very low risk. |
Agreed, I think the wiki will need to be updated in quite a few places once the new trade protocol is in place to make this clear. |
I think you should be able to use your discretion and refund the full amount if you feel it is appropriate to do so. |
I've been using BISQ since Nov 2022 providing liquidity. I grew my liquidity to provide 3 to 4 open orders a day. On Feb 5 I had my first bad trade that needed full arbitration. It took 20 day of my BTC locked up with little to no explanation of the process. It was extremely difficult to figure out if the arbitration process was even moving forward as I was not aware o a small "arbitration" tab inside support. MY HOPE through this process is that I was assured that I would receive the losing parties' deposit. I CANT put up 15% minimum collateral for NO personal benefit it a trade goes sideways. I want to use BISQ but I cant continue when their so much upfront collatoral needed and absolutly no benifit to either party. Please let me know when this proposal is overturned. |
Thanks for the comments sorry to hear you had a bad experience. What changes would you like to see to improve user experience and make you more likely to provide liquidity? |
The personal benefit of the security deposit is that it enables traders to exchange without knowing each other (reputation means less privacy), as it happens in more than 99% of the times, which is the frequency of arbitration in relation to total number of trades. One way to reduce the harm of getting into arbitration would be to reduce the amount of time necessary until you're able to open it: #297 |
The mediation process is difficult. BISQ does a good job with having pop-up boxes to help explain things. The mediation is like going blind. I didn't even know there was a difference between mediation and arbitration until yesterday. This is not clear to the user. As far as liquidity goes, I do not understand why there needs to be a security deposit for the liquidity provider. Who or what is that for if it doesn't go to the winner of the arbitration? Their security is the BTC they have locked up to make the trade. It is like there are all these hoops to jump through and in the end, if you go to Arbitration, there is Zero upside. The liquidity provider is taking WAY more risk than the buyer. My recommendation is either remove the security deposit for the liquidity provider OR return the winning arbitration reward. |
I agree that mediation and arbitration UI is not great, and there is a project to improve that, hopefully you keep using Bisq but don't need to see if it really improved often.
Instead of going to the one who wins the arbitration case, it goes to DAO contributors who have burned BSQ in advance. The security deposit is completely lost for the one who creates makes arbitration necessary, which is an incentive for them to accept mediation and at least keep a part of the security deposit. Why can't you receive that security deposit as compensation? |
What security do we traders have in providing 1 or 2 bitcoins in an offer knowing that if it goes to arbitration we could spend 20 days with the bitcoin locked up? Also receive only 0.5 BTC and the rest in BSQ. There is also the risk of receiving a blacklisted bitcoin. I send XMR and the counterparty sends me a blacklisted Bitcoin, when I deposit it in any broker I will have them blocked. This has already happened to me, I had to explain myself to the cybercrime department in Germany, and only after 4 months my bitcoins were released. I think that in mediation the winning party should receive 5% or 10% and in arbitration too, 10% or 15% at least. |
If a CEX blocks your money for a while, you can file a lawsuit for lost profits, and the judge will give you reason. As we are a community and not an independent broker, we must review this, and at least give compensation of at least 5% to the winning party. |
1 BTC trade with min security deposit 15% (0.15 BTC) and 5% of the trade amount as compensation for the winning party in arbitration would give a burningman doing a self trade 0.043 BTC as a reward, if they had burned BSQ to get the max share of 11% of the amount sent in the DPT. So, if Bisq compensates the way you propose to traders, I promise that, being one of the burningmen, I'll begin to create fake orders myself before someone else does. |
Sorry I did not understand. |
I place an offer to buy 1BTC. I place 0.15 BTC as security deposit. |
I think this idea of yours will bring down the price of the BSQ token. For example: Maker deposits 0.15BTC for a 1BTC bid for XMR. It sends the XMR to the taker, and the taker stops responding. The maker will only receive 0.5 BTC and the remaining 0.65 BTC converted into BSQ at the 30-day average price. |
These are different issues: |
Purchases of BSQ to burn should be given priority to those who obtained a refund from the arbitration. My offer id: |
Offer ID's are not visible to those taking an offer. You could publish your onion address, I wouldn't do it here as generally, traders will only get best offers and that's how it should work. |
rcudj5a57z6bjvukydn4qdmyxvecnaqeuiz2s66fpk7kuooht3c5msyd.onion:9999 |
I agree with @onlymarcus - Bisq should liquidate itself in the attempt to make TRADERS WHOLE. Else, what is the point? The unresponsive trader, we can fix this. We must fix this. Somebody buy this man's BSQ! We cannot allow the unresponsive trader to beat us! |
Maybe another Refund Agent could be introduced. Currently there is only one Refund Agent. The reason for traders being partially refunded in BSQ is that the Refund Agent does not have an unlimited supply of BTC. If there were two Refund Agents this would half the amount of refunds any one Refund Agent has to make, and hopefully end to practice of only partially reimbursing traders. As big grows I think more than one Refund Agent will be needed to scale with Bisq's growth. This would not fix the problem of not paying out the security deposit of the trade peer to the arbitration case winner (however this proposal does go someway to addressing it), but it could end the practice of only partially reimbursing high volume trades. |
Can this be proposed for voting in the dao? |
Since BISQ can only commit to refunding 0.5 btc per failed transaction, I propose lowering the BTC limit to be transacted from 2 to 0.5. |
Does the client offer a warning message for this dangerous scenario? Trades over .5 btc cannot be made whole- except through BSQ market. How many trades do we have of this type? Greater than .5btc ? The risk seems to be a little more than our system can bare at this time. I agree we should only allow trades that Bisq can Wholesomely handle. |
I think this would be a valid proposal. I think it would be better for you to open it as a new proposal though to get more visability. See the guide to proposal here: https://bisq.wiki/Proposals |
No, it does not. I think a warning somewhere would be good. But my preference would be to avoid it by restoring full refunds.
Maybe a couple a month. You can check out DAO > Governance, and see the list of reimbursements in each cycle request.
With the old trade protocol although traders were reimbursed with BSQ for trades over 0.5 BTC they always had the option to trade with the burningman as the same BTC/BSQ to be made whole in BTC terms. Changing the trade protocol means the BTC is distributed to multiple contributors. Therefore the burningman is not getting any significant amount of BTC (less than 0.02 BTC last cycle), and so there is no option for reimbursed trades to trade directly with them. There seem to be a few ways this could be addressed. I agree it is something should be done as currently I feel reluctant to recommend Bisq for people that want to do trades over 0.5 BTC which seems like a shame. |
What's the current status on "Arbitration Pay"? Is the liquidity provider still screwed? I haven't posted a trade on BISQ since Feb and wont until it's safe again for liquidity providers. I dont want to get screwed again. |
If security deposit is over 17.5%, the peer who replies in arbitration will get a compensation of at least 1.5% of the trade amount from unresponsive peer's security deposit. |
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so is it good or not? such a headache to understand all of this |
Only now after 10 months I managed to sell all the bsq at a loss. I opened two trades selling XMR. Two offers of 0.5 BTC on the XMR/BTC pair. Once again they took my orders, I paid the XMR and the trader stopped responding. Will I be harmed again after 10 months of trying to sell BSQ after a case like this? I should receive the 15% from the other party as compensation. |
At the moment the winning party receives next to its own loss also the security deposit of the peer (minus a arbitration fee in some cases).
The proposal or removing the burningman would have more open risks is we keep that model. Therefore that proposal suggests to alter that model to not pay out the security deposit of the peer.
The details about the potential abuse scenarios where this aspect matters is discussed here:
#385
I am aware of the motivation to give some compensation for the lost time and effort to the trader. But I think its better to reduce the risk from the suggested changes to remove the burningman. Also one need to take into account that such reimbursement is not typical. If there are troubles at any service (like a CEX blocking your payment) they usually never reimburse their clients for lost time, extra work, etc.
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