I just saw the September analytics summary and though there could be many factors, trading volume is way down. I would say the main factor is that the higher fees have driven away the Monero trade. As I’ve been trading it for the past few weeks and there are just less and less trades, especially the bigger volume 2.0 BTC trades. Obviously on the small trades on BISQ, the BISQ fees are minor. Most of the small trades will cost more in mining fees than in BISQ trade fees. But does it really make sense to charge 2 people trying to do a 2.0 BTC Monero exchange 1.6 million sats (.012 taker + .04 maker fee)?
The other issue is that the BISQ Monero-BTC is frequently a layered trade both for the customer and the market maker. The customer may want the privacy that Monero combined with BISQ provide so they may be required to make multiple conversions (for example, fiat to BTC to Monero and back to BTC and fiat) The market maker can provide liquidity, but let’s say they are paying .25% on their exchange to hedge, and .2% on BISQ plus mining fees, plus reserving liquidity in offers, plus taking directional market risk while they are unhedged, it implies that the markets are going to be pretty wide, right? The breakeven would be more than 1% market width and the market makers aren’t going to work for free.
So I would recommend lowering the fees to try to bring back some utility as a conduit for that Monero trade. Or maybe creating a fee cap instead to cut a break to the guys doing 1-2.0 BTC at a time… It doesn’t make sense to me that they pay $120 to BISQ for that trade. A trade that likely goes smoothly as the stakes are quite high for both parties, meaning the friction on BISQ ‘staff’ is often lower.
I’ve been locked in a BSQ/BTC trade dispute for 8 days over .01 BTC of BSQs, caused by a pretty common problem where their BSQ wallet doesn’t recognize the coins, even though they can see on the explorer that they are confirmed. If BISQ is paying a mediator/arbitrator 50 BSQ to fix that and the trade earned .51 BSQ total, those are not great economics. Also, if someone is being paid 50 BSQ to mediate the problem, should it really take 10 days to resolve? With trader chat, I can ask my trading partner what happened, and what they heard from the med., but we only hear back from the mediator every few days. That’s another topic I suppose!
But based on the BSQ market, things are looking less healthy than they did a month ago. BTC is down 20% and by my calculations BSQ is also down about 20%, the best real bids in the market are <8000 sats versus >10k sats and >10k BTC last month. And it’s very clear from the ticker tape that almost none of the 100,000 BSQs that were issued last month were sold this month. Last month, at around this time, contributors had already sold the BSQ they wanted to, and traders drove up the price of BSQ almost to the point were the discount wasn’t worth the hassle. This month, those traders just don’t seem to need to much BSQ at all.
I would recommend setting the fees at .1% Maker in BTC, .3% Taker in BTC and BSQs would give a 50% discount to that rate based on the 30 day average BSQ price.
I understand that a person can use BSQ to lower their trading fees, and any frequent trader will do that. But understand it’s a massive hassle and an illiquid BSQ market with high relative fees since it involves multiple on-chain transactions. Not to mention that I think 4 of 10 of my BSQ trades ended up in Arbitration, where as maybe less than 1 of 100 of the other trade pairs. So I feel that including the BSQ discount shouldn’t be the base case to evaluate the BISQ trading fees.I very much like BISQ, and I am focusing on the problems I see in this post.
Of course, there are many good news in BISQland with lots of USD trading, EUR, BRL, new JPY market, and I’ve even brought the RUB market back from the dead (over 1 year without a RUB/BTC pair trade)! The developers seem to be doing an amazing job with improving the software and delivering updates. Trader chat is awesome. Dark mode, can’t live without now…