DAO thoughts ahead of the document being released

Ahhh, the tension of waiting to learn the details of the DAO!!! Frantically hitting refresh in hope of seeing THE post. But as I lay awake at night, I have worries that keep me from sleep. Reading the occasional snippets of information Manfred shares gives you a partial picture, but with big bits missing which I can’t help but try and fill in.

To be clear, everything I say comes from a place of deep appreciation of all that Manfred has built and is doing. Anyway, think of these thoughts as a cross between shower thoughts, night terrors and a love letter to Manfred :smile:

In the recent post regarding fees in the DAO version of Bisq, he states that there will be a new Bisq DAO token. He also describes a new fee structure (which can be paid in BTC or in the new token with a discount of 90%) and discusses the fee going to the arbitrator. Distributed arbitration isn’t going to be in the next release.

So here are the thoughts that nag at me as someone committed to contributing to the DAO and project at large but willing to go all in if the model is right…

The DAO token holders must get a share of the fee right? I mean otherwise it’s just another cryptocurrency right? I mean a DAO token is a token that represents more than just a coin, it pays out a share of the profit it creates to its token holders who funded it’s development. That’s what a DAO is. It’s just Manfred has not said anything about dividends to my knowledge yet. If no profit share, Aaaaaaaahhhhhhh!!! Nightmare :frowning:

If a profit sharing dao is what you want, why a new token? The whole Bisq platform is built around BTC. Why not sell Bisq DAO Tokens (which could be colored coins on the bitcoin blockchain) for 1BTC each, holding 90% and using the income for development etc and selling the other 10% of tokens to the public? Profits could be distributed every time the profit wallet became 1000 x the cost of a high priority BTC fee so tranaction costs were only 0.1%. That would make you the worlds first DAO paying out in BTC and could produce huge free press for the project.

Instead, the new DAO coin will be used as a currency by everyone because you’d be crazy to spend 10 x more for the convenience of using the native currency of the platform. It seems like a recipe for newbie confusion, extra steps and a lot of price instability for the next few years. So are we using a DAO token as a currency? which doesn’t make sense, or just a currency? In which case, how is it a DAO and not an ICO? Does the currency get mined? Is it proof of stake? Noooooo Aaaahhhh!!!

See the nightmares I’m having? I can’t wait to see the details for myself. It’s difficult when we are being asked for feedback on details like fee structure but not on the bigger question of how those fees will be distributed. Manfred is building something of great importance to the world and we don’t know how long we have before it’s critically needed by millions of people. I am one of the people who understands that and wants to be a part of funding a team of developers. I just hope that the structure is right and that it will be a success because there is a lot riding on it.

Sorry for the cathartic brain dump, I hope it’s received in the spirit intended. Have others been guessing what the DAO will look like? Want to share your hopes and fears while we await the announcement? I promise, it feels good :slight_smile:



i’m also confused about this, can wait :fearful: . i also worry about it being complicated for noobs, or not genreating enought greed. interesting topic- how do you get enought greed but not to much greed? :slight_smile:

I’m not sure this term fits in bisq’s philosophy. You can find lots of it though in every custodian exchange…

PS. Explanatory notice: I’m not saying that ‘Greed’ can’t and won’t try to intrude into bisq, but it can’t last since the environment is not fertile enough (at least for now).

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How about we replace the word greed with profit motive? :slight_smile:

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Anyway, looks like we got a BIG announcement of some great news, that didn’t take long!. The new version, Bisq, will be released shortly, minus the DAO functionality, to solve the transaction fee problems now. The DAO will come in the next release. Yay for more time to perfect the DAO!

yep, my wording lacking. “how to get profit motive hight enought but pervent greed”.

Wanna bet?
People can get very creative trying to game a system.
One could actually argue that most if not all of human progress/development/chaos is predicated on the desire to make a buck, get ahead of the competition, find a shortcut, get the best side of a deal, etc., all of which are predicated on survival of the fittest, and so morally and naturally justifiable.

Interesting train of thought, although when I hear the expression"survival of the fittest", there is very rarely a connection to anything moral or justifiable in any way.
So, no I don’t want to bet. Greed is banks and multimillionaires creed and bitcoin was built to go against that. The fact that there are people making money out of it is an unfortunate side effect which will last until bitcoin becomes so big that it will either be characterised as a “terroristic means of disruption” or -in case of total acceptance- leaves no space for speculation.

The whitepaper is almost finished. The tokens will indeed be coloured coins, managed and traced by Bisq. The tokens will not give any dividends, in part due to legal reasons, but also due to technical reasons. Instead the tokens will be burned, if used to pay the trading fee. The number of tokens will thus decrease with time and there will also be a market for the tokens. One may expect the value of the tokens to increase in proportion to the decrease of the total number of tokens.
Hopefully this makes you sleep better :slight_smile:

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Not really :frowning:

How does “legal reasons” even make any sense for GLOBALLY decentralized software?

To quote the Bitsquare home page…

“You never change things by fighting the existing reality.
To change something, build a new model that makes the existing model obsolete.”

― R. Buckminster Fuller

Projects like Sia have obviously solved the issue of crypto fee sharing and Bisq can too.

Without offering a share of future fees to the people funding the projects expansion, it is just another alt coin ico, no matter how unique and interesting. It is offering far less value as a purchase, so will have a far lower value. Did you know that siafunds are the only crypto asset worth more than a bitcoin with a current valuation of 3 Bitcoin each? That’s the power of selling future revenue now, and that’s the way to create a big upfront development fund now, guarantee ongoing developer fee income long term, and have a mechanism to share the fees with investors you need to make it happen.

I’m aware that the changes I’m proposing are not trivial. They would require Manfred to ditch a bunch of code that took a lot of time and effort to write and to write a lot of new code. But I care deeply about this projects long term success and think that the DAO funding model has the ability to make or break the project. It is critical that the funding model for this critical project is right. I think the decision to do a pre-dao hard fork to solve the stuck transaction issue was a smart one in it’s own right but it also gives us a little breathing time before releasing the dao version.

That’s my 0.2 satoshi’s worth :slight_smile:

we dont know all the details of bsq, calling it an ico when your original post mentions this is exactly what you want, stinks as an idea (unless manfred wants to exit scam then it sounds like an awesome idea!) the team at bsq (which seems to be minimal, for shame programmers who just want to spend time on spawning ico’s/clone scams instead of help expanding the eco system with useful systems) have fucking integrity…well, so it seems.

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For the record, I dislike ICO’s and am not advocating for one here.

I don’t have time for a detailed answer. Just to avoid confusions, here the main points:

  • There is no fucking ICO
  • The Bisq DAO has nothing to do with TheDAO, Etheruem or smart contracts (though in a wider sense the Java code is smart contract)
  • The initial distribution will be done to those who have worked for the project so far (some of you will be part of it)
  • The token is a colored coin on BTC
  • Trade fee can be paid in BSQ and you get a huge discount in fee compared to BTC (it is optional to use BTC or BSQ for fee payment)
  • Conceptually it is an AppCoin (used to access a service -> pay trade fee)
  • The DAOs core function is management and funding of the work on the project
  • It will be completely decentralized and open
  • Is was analyzed, discussed and approved by a renowned Swiss law firm

Stay tuned the doc with all details is nearly finished and will be open for comments soon.

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It will be very hard to attack Bisq by legal means that is for sure. Still it is better to be legally compliant as a second layer of defence against time-consuming hassle.
See the token burning as a stock buyback. If Bisq turnover increases the buyback rate increases and the token price will increase. Anticipating this price rise now and buying tokens is similar to getting future revenue “now”.
It is important that there is a guaranteed market for sellers of tokens since traders will like to buy and use them.

That’s for a lot of great info Manfred, thanks for the share. Let’s wait for the document now, I think it’s going to make for an exciting read!

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Combining these three quotes a question occurs:
If the BSQ value increases with time and as its numbers decrease (burned with every use to pay fees), would it be possible at some point in the future that it will be irrational to pay fees with BSQ instead of BTC? If that is correct what will be the purpose of existence of BSQ? Will it be evolved into some kind of unpurposeful asset? If yes, wouldn’t that eventyally lead to loss of value and functionality?

Not really. It would make more sense to pay fees in BSQ and buy the same amount of BSQ to balance. In such a trade you don’t lose 10 times as much as you would if you just used BTC, not counting the fees you pay in order to buy new BSQ. The whole idea is that developers are the ones that are selling you the ability to trade on bisq. If you buy the token, you get a discount, since it would make sense to buy as much as BSQ at once to avoid the trading fees on that BTC to BSQ trade. Keeping them just means that you paid for the service of bisq to developers and didn’t use it.

BSQ will make sense to own and hold if you think the project will rise. As you will save on fees and also you can sell the BSQ you own at any point (so it is not like a gift card) and make a profit. You don’t get dividends, but you do get an asset that rises in price (hopefully), so it is more like lending money to a company, a debt, not a share.

However, it is more like a share since you get voting power. The bisq development will follow what the DAO votes, if they want to get paid. So putting money aside, it is also important to know how the DAO will work in the decision making process to insure the right future of bisq project.

It will not be trivial to deal with BSQ, that is for sure, as you will have responsibility to make right decisions and vote for what you believe is the right path for bisq to take. And if you make it profitable and worth your time financially, that it will be up to market prediction.

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The amount in BSQ needed for the fee will be adjusted over time to reflect the market value of the BSQ.


Yes the height of the fee (both BTC and BSQ) will be defined by voting (every month). So it will get adjusted to market value to reflect a reasonable value.

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Looking forward to reading the white paper. Curious to see how you get around btc fees or reduce them or speed up the process by only adding a color coin still connected to the bitcoin network.

I’m still looking for that decentralized Cryptsy/Poloniex with some automation and very light fees to support continued development and maybe some type of token share. I guess you can make money being a market maker here, but without something to make this system a people magnet I fear Bitsq being overshadowed by OpenANX, or one of the other projects currently being funded. Maybe Rootstock going live in June might give us some boost in functionality and speed?

Programmers tend to get the business models really wrong. Can be great a coding of course but most have only been employees or freelancers which isn’t the skill set. Everybody cannot be great at everything. As a person with a business background as an investor and entrepreneur I feel the freemium model, however noble and needed, is useless for fast growth. Even if the cost is set near zero, the key word is it isn’t zero. Because the economic model hasn’t been properly addressed, development is at a relatively snail pace. Addressing the developer funding only doesn’t come close to address the lack of user on-boarding. A better developed ecosystem will help bring in some, but there is nothing like self interest to push marketing.

  1. above zero€ pricing even if 1 cent for transactions.
  2. TumbleBit/Joinmarket or another Mixer added to the client (with fee) even if 1 cent (more)
  3. Trustless Web server/nodes for Mobile clients or web browser access with account generation and logon via Airbitz/BitID/Trezor. Transaction history can be stored remotely (dropbox/sia/) if wanted or paid for with small fee share for participating nodes. I would happily run such a headless node for free but even more so for pay.
  4. Push notifications and mobile app control of Node or Desktop client.

I feel that not all incentives are presently aligned to take a good market share. Maybe that will be outlined in the paper. I love Bisq and want to see it win and not be overshadowed by a much better funded project that pays attention to the incentives of all possible stake holders especially those that market or have social pull and incentive to use it.

end of rant.