Feedback, noted, @cardochav. Thank you.
And has the community decided this is proper protocol?
There are no ‘community decisions’ here. There are decisions made by individual arbitrators, and there are decisions made by individual users as to whether they wish to use Bisq. Each is free to do as they choose, and each must also deal with the consequences of their choices, especially arbitrators. If an arbitrator displays bad judgement, it is likely that users will make that known. Your post here is a good example of how that can work. This conversation is now public, and free for anyone, including other experienced users and prospective new users, to review for themselves. When an arbitration decision gets publicly discussed, it forces everyone to evaluate their actions and decisions carefully. As an arbitrator, I know that this is always a possibility; I know that my decisions are always potentially subject to harsh scrutiny; I know that users who are unhappy with my decisions can blacklist my arbitrator address and stop doing business with me. All of these things are designed to keep me and other arbitrators in check.
How does the community know that the arbitrator isn’t in collusion with the seller?
You infer this by understanding the design of the system and its incentives, and observing that there have been zero incidences of this kind of collusion in the past. If an arbitrator colluded with a seller to defraud a buyer, it is reasonable to expect that the buyer would do everything in their power to make that known to others. An arbitrator might be able to do this once or even several times, but very quickly it would become known that Bisq is an unsafe place to trade. Even one instance of this kind of collusion, I believe, would destroy the reputation Bisq has built up over years. This is why, in the beginning, the only arbitrators were co-founders. The co-founders are the people with the largest stake in Bisq, and who have the most to lose if Bisq’s reputation were to be destroyed. It makes no economic sense for us to collude with one or even many sellers; no such collusion could ever be worth the years of work we’ve put into building Bisq. Now, as we incrementally roll out the Bisq DAO, new arbitrators will be required to post a very large bond in $BSQ to take on arbitration duties, and that bond can be confiscated should an arbitrator be found to be colluding or otherwise acting in the disinterest of users.
Are you familiar with using Venmo to send money?
Yes, we are familiar with the “social” aspects of Venmo, and familiar with the fact that users can opt out publishing their transaction details.
In any case, we publish a very prominent popup message in the application letting users know that they must not use any value other than the trade ID in the “payment reference” / “reason” field. This is simply a hard and fast rule of the Bisq protocol, and one that users must not violate, for everyone’s protection.
If, in practice, we find that Venmo is unusually problematic, i.e. that for whatever reason, users continually violate this rule, and that nothing we do makes a difference in changing that, then we will simply remove Venmo as a payment method. As you may know, we only added Venmo in Bisq v0.6.6 a couple weeks ago. Think of this as a trial period.
In my mind if arbitrators are going to continue to punish the buyers so harshly in this instance they are incentivizing sellers to use venmo to make an easy profit off new bisq users. I’d bet that this will happen to one out of five new bisq users who use venmo regularly it wouldn’t take long to make a decent profit off this exploit as a seller.
Noted. I doubt that this is a significant risk. It would be a very frustrating game to play for such a scammer, as in our experience, most users have no problem following the instructions and using the Trade ID. For example, in the last month, I have handled on the order of 30 arbitration cases, and just 2 of them had issues with the payment code. This would simply not be a profitable scheme for the scammer you describe here.
As a new user I thought the security deposit was mainly to protect against chargeback, now its being used to award how the arbitrator sees fit. I think the team needs to seriously discuss how they handle these situations because it seems like the arbitrator is pulling numbers out of the sky when making these decision.
Security deposits exist to create economic incentives for Bisq traders to act honestly and comply with Bisq’s trade protocol. When I make a decision to award a portion of a security deposit, I am always asking two questions: what would be fair to both parties, and what would maintain the integrity of Bisq’s incentives?
In the case in question, had I been the seller, I would have been rather upset that the buyer put me at risk by using the word “bisq” in the payment reference, and depending on how much previous experience I had using Bisq, I would likely have reconsidered whether I wanted to keep using it going forward. Upon seeing that I was awarded 1/4 of the buyer’s security deposit, however, I would have understood that there are in fact meaningful penalties for violating these rules—that Bisq arbitrators actually enforce the rules of its protocol—and this would have made me feel at least somewhat more confident in continuing to trade with Bisq. Likewise, as the buyer, I certainly would not have been happy to lose a portion of my security deposit, but I hope I would have found the amount (about $25 USD worth of bitcoin in this case) to be commensurate with the amount being traded and in proportion to the violation.
When choosing whether and how much of a security deposit to award, I am thinking carefully about how both parties will be likely to take the decision, and how any reasonable, disinterested third party familiar with Bisq would evaluate the decision. I am also basing each decision on my many dozens of previous arbitration decisions that were accepted by both parties without issue. As Keo mentioned above, arbitration is by nature based on judgement; if I make bad ones, that will become known, and I won’t remain an arbitrator for long.
I hope this is a satisfactory response for you, @cardochav. Thank you again for raising your concerns. Conversations like these, for the reasons I detailed above, are an important part of how the practices and policies around Bisq arbitration take shape over time.