Keybase meeting Thursday, April 22nd 21h00 UTC

[huey735]

Previous meeting discussion

Topics for the next meeting:

With @sqqrm working on a new mode for trading involving a single transaction it makes sense to discuss some of the current problems with BSQ, it's privacy and the model we use for receiving trading fees in BTC and later redistribute it.

A. BSQ privacy

Video summary
Paper

Summary - BSQ inherits bitcoins bad privacy and adds to it. The constructions allowed are very limited and it's trivial to track down ownership. Plus the implementation itself distinguishes between different types of BSQ transactions to further break down fungibility.

B. Better way to gather the trading fees and get rid of the Burning Man role

Bisq generates revenue by mainly charging fees for traders to make and take offers. A great part of these fees are still paid in BTC which leads to an undesirable entity having custody of them and the creation of lots of small amount UTXOs that become later very expensive to spend.

Related proposals
#304 - Make burning man a tradebot and add BSQ auction market
#316 - Distribute trade fee in BTC to DAO stakeholders by using locked up BSQ
#317 - Distribute trade fee in BTC by using proof of burn
Replace Burning Man with Burning Woman

[Conza88]

Possibly dumb - but possibility of using Bip 47 - style implementation for BSQ? https://github.com/bitcoin/bips/blob/master/bip-0047.mediawiki

[m52go]

a. bsq privacy

privacy-wise, bsq inherits all issues of btc.

• coinjoins cannot work since it must be possible to follow tokens
• moving to another chain like liquid may be workable but may be difficult with all the functions the bsq token has
• this decision may become forced (not optional) as fees go up
• in interim, best solution is to simply advise users how to protect privacy when using bisq dao

liquid seems to be a strong contender, but there is general hesitation at the thought of basing the bisq network on a federated network.

points:

• l-btc is very similar to btc
• confidential transactions make liquid more private than btc
• listing new assets is permissionless
• if bsq were to become a liquid asset, no value would actually be stored on the liquid (it would just be used as a ledger keeping track of consensus from bisq network)

so there are 2 distinct issues: moving bsq off-chain, and movnig the bisq trade protocol off-chain.

regarding next evolution of bisq trade protocol, a lot has been said, but little has been done so far:

• lots of ideas but none have been complete and compelling enough to warrant implementing
• see chimp's write-up for reference (Investigations for a new trade protocol bisq#5430)
• see wiz's proposal for adding l-btc as base currency (Research project to integrate L-BTC as a Bisq base currency proposals#198)

even with an l-btc-based bisq trade protocol, every trade would still require an on-chain btc transaction to exchange l-btc for btc, so what's the advantage?

• bisq can run an l-btc-to-lightning swap service, so on-chain transactions would never be necessary

two core bisq contributors volunteered to work together on integrating l-btc as a base currency (!) and creating proof-of-concept to see if all desired functionality is possible.

b. better way to gather the trading fees and get rid of the burning man role

[conversation was brief since last topic ran long, and points were scattered]

bloom filters are problematic for privacy

moving bsq and trade protocol to l-btc may make it possible to collect all trade fees in bsq

as long as btc is used for trade collateral, donation address will be hard to remove -- simply moving to another chain won't solve this issue. it can be seen as one of the biggest issues with bisq right now.

[pazza83]

Please can I put forward the below to be added to the agenda for some point in the future:

Discuss proposed FATF rules - What can Bisq do to prepare for likely future changes including protecting past, existing and future contributors & traders?