I am new to Bisq, and I’m really interested by the idea of a decentralized marketplace which preserves privacy and is completely censorship-resistant, and cannot be taken down.
However, I’m a big critic of decentralized protocols, and I want to start with something simple, to make sure that it’s worth the excitement: what protects the DAO?
As far as I can tell, nothing but the BSQ token. People vote with their financial bond with Bisq, which is expressed in amount of BSQ. But that sounds to me like Proof-of-Stake. So, what stops me from buying all the governance myself?
Decentralized marketplaces and exchanges are the way forward. Being able to use bitcoin in a multisig as an escrow enables strangers to exchange something of value without needing to trust the other person.
what protects the DAO?
The DAO is decentralized. Any person can hold some BSQ and become a member of the DAO. Any attacker would, therefore, not have a single place to attack. This makes the attackers job a lot harder.
As far as I can tell, nothing but the BSQ token. People vote with their financial bond with Bisq, which is expressed in amount of BSQ. But that sounds to me like Proof-of-Stake. So, what stops me from buying all the governance myself?
It would be impossible for anyone to own all the BSQ. Some holders of BSQ might not want to sell, some are inactive, some BSQ is likely lost. If someone had enough BTC they could buy a significant percentage of BSQ. This would likely increase the value of BSQ. If an attacker wanted to be malicious it would have a negative impact on their own BSQ holding. Therefore, as the DAO grows in marketcap this attack becomes harder and harder as the attacker would need larger amounts of BTC (or USD value assuming BTC and BSQ go up over time)
As well as the negative financial incentive for an attacker, a couple of things protect against this:
DAO contributors have a higher weighted vote. The is to ‘allow people who buy into the project considerable influence, while hopefully minimizing the potential of whales with bad intentions from buying their way in and sabotaging the project.’ See: DAO user reference - Bisq Wiki
Bisq is open source, a new Bisq could be created users of Bisq would then either use the Bisq that is being attacked or move over to the new Bisq. The new Bisq could have a new DAO or even an alternative governance mechanism.
Both the response and the link are very meaningful. Thanks.
So, it’s sort of like how bitcoin works with a few tradeoffs. It’s more decentralized in the sense that an attacker would be further discouraged to attack (by either allocating the required votes, which would need more than 80% of the BSQ), and less decentralized in the sense that on one hand the DAO is not centrally controlled, but on the other, not completely decentralized as with an objective mechanism (as in bitcoin).