How arbitrator's deposit work?

[Feynt]

Hi all!

I’m not able to understand how are managed arbitrators’ deposits.

These 2 bitcoin deposits are paid to whom and in which form?

Who decide if the arbitrator, or the senior arbitrator, loose its deposit in case of a bad behaviour? And who receive these 2 bitcoin?

Thanks

[alexej996]

That is not implemented yet, there is still only one arbitrator, so who knows, it might even be changed from a current plan. Here is the quote from the FAQ page

@https://bitsquare.io/faq/#10

If an arbitrator’s dispute resolution is not agreed to by both traders, a second round of arbitration can be requested by either of them.

The Bitsquare system in this case will then select an arbitrator from among the highest-rated arbitrators. If collusion is found to have taken place, the misbehaving arbitrator will lose her deposit. This puts the arbitrator at a significant loss, as her security deposit was more than she made by being dishonest.

I don’t know exactly the answer to your questions, but I assume that an arbitrator deposits money to a senior arbitrator or a multisig of senior arbitrators, which I see are the arbitrators personally invited in the bootstrap phase. I also assume that they will buy some DAO coins and burn them or split the BTC between themselves. I know this would rise some decentralization concerns, but this is the best I can think of. The bitsquare is an open source project after all, so a fork in case of controversy is always a possibility.

[ManfredKarrer]

The planned decentralized arbitration system was not implemented yet. I am the arbitrator as it is not safe to open it up yet. With the DAO we have found a good solution how we can open and decentralize the arbitration system (secured by a high security deposit of DAO tokens). As soon we get the final review from our lawyers we will publish the paper…

[Feynt]

Ok, thank you very much!

I wait for the paper!