Reduce by half the min and max BTC limits to adjust fiat BTC price increase.

[MwithM]

This is a Bisq Network proposal. Please familiarize yourself with the submission and review process.

BTC price has increased drastically in the past months, causing many annoyances to Bisq limits. I propose to halve all those limits to make the limits closer to its original fiat values and make them work as intended. As prices for this proposal could be too influenced by volatility, I will be using a 30.000USD instead of the current price of ~40.000USD.

This proposal could be divided into 2 or 4 parts, but I think it's better to keep it together at least until we concrete the pros and cons of each measure:

Max limit to buy BTC for unsigned accounts and min security deposit.

Min amounts for security deposit and max buying limit stopped potential traders from onboarding Bisq.

1. Min amount for security deposit is 0.006 BTC (180 USD). The goal of this lower limit is to make the security deposit big enough to not make it irrelevant to just lose the security deposit if a trader doesn't attend to it. New amount would be 0.003 BTC (90USD) but I find many good reasons to make it even lower, like being able to buy the necessary first BTC at an ATM or make it easier and less risky for market makers at the new Keybase group at Use Keybase to increase accessibility to Bisq for new traders with no funds for security deposit, trading and mining fees #283.
2. Max buying limit for unsigned traders is 0.01 BTC (300USD). The goal of this limit is to reduce chargeback risk for unsigned accounts. We thought that 180USD was too high in a past proposal (Increase buy limit for new accounts from 0.01 to 0.02 BTC #95 and at that time that was total limit for any buy). Reducing it to 0.005 BTC (150USD) should be a no brainer. The only con is that with current blockspace prices the total amount on mining fees for 0.005BTC trades is very high.

Max trading limits

3. Trading limit for fiat payment methods is diverse, ranging from 0.25BTC to 2BTC (7.500USD to 60.000USD). I would halve all of them to 0.125 to 1BTC (3.750 to 30.000USD. It's a good change for @pazza83 and growth team to rethink if some payment methods need to adjust the limits between this new ranges.
   To show some examples, some of new limits would be: SEPA, Revolut, Zelle, USPSMO, Interac e-transfer, Amazon: 0.125 BTC
   Transferwise, Faster Payments, F2F: 0.5 BTC.
4. **Trading limit for alts is 2BTC (60.000 USD). The goal of this limit is to protect the DAO and traders from loses in case something goes wrong. Anyway, what contained DAO loses at April's attack was security deposit, not trading limit. Alt trading is generally safe, and specially XMR traders complained some time ago that limits were low. Reducing this limit to 1.5 BTC (45.000 USD) instead of 1BTC could be enough.

Accepting this proposal would require that Growth team changes all wiki and docs, and announces them properly. Maybe a specific project would be needed.

[pazza83]

Thanks @MwithM for making this proposal. I think with the recent price increases rethinking the above fees is a good idea.

I agree with reducing the min security deposit to 0.003 BTC.

I disagree with reducing the limit for unsigned traders. I think 0.01 BTC (300USD) should be kept. Reason being a reduction of 0.005 BTC (150USD) will cause mining fees to double in proportion to the trade amount and will cause a lot of new users complaining about Bisq being too expensive. It would likely also put more people off from trading. Segwit has been a fantastic implementation but also mempool activity has been a lot higher since it was implemented so the savings have not really been hitting peoples pocket.

With regards max trading limits, I am unsure about this. Ideally I would like to keep them as they are to maintain revenue for the DAO (BTC / BSQ denominated). If the long term goals is to reduce trading limits as BTC price increases then I think it will will also limit DAO revenue and, therefore, Bisq's growth. A profitable DAO would also also be better protected from errors.

[Conza88]

In principle: minimum should be lowered.
Reduce the barriers of entry.

The maximum should not be lowered.
Why in the world reduce liquidity? Especially forcing people to trade more etc with a full memepool and high fees etc?

If a seller wants to do a particular amount and a buyer is keen why get in the way?!
Educate on the risks and potentially reprompt if needed, or request they confirm the ability to pay (e.g. may be limits on amount that payment method supports).

In principle I'm against both maximums and limits.

[m52go]

Would be helpful to get advice from @bisq-network/bisq-devs on how limits are determined -- it seems like maximum trade limit is a DAO parameter, and all other limits are determined by multiplying this number with risk levels.

So if the DAO parameter for maximum trade size is halved, for example, then all limits are halved...meaning if we want to reduce high-risk fiat limits to 0.125 BTC from the 0.25 BTC they are now, then altcoin limits would have to become 1.0 BTC? I assume minimum deposit (.006) and maximum unsigned trade size (.01) can be adjusted independently in code.

Reducing it to 0.005 BTC (150USD) should be a no brainer. The only con is that with current blockspace prices the total amount on mining fees for 0.005BTC trades is very high.

As mentioned in the linked thread (#95), fiat transfers used in the March 2019 scams were much smaller than the current fiat value of 0.01 BTC, so this one parameter in particular should be addressed quickly, ideally in the very next release. I realize fees make this look unattractive but I'm not sure it makes sense to keep them so high given the reason they exist in the first place.

[sqrrm]

I'm not completely sure about the max limit but I think it's meant as a safety limit for Bisq as a project. It did help when we had the unchecked payout address bug. I think it makes sense to keep the new account limit closer to USD100 and not change the max limit.

The small trade limit is hard coded so it could be rolled out in the next release, problem is that if it's lowered then current offers buying more than the new limit would not be valid. It's a hard fork.

[chimp1984]

We should try to figure out if there is a feasible way to use the BTC/USD rate to dynamically adjust those numbers.
As limits are verified by trade peer that is not a trivial challenge. No concrete idea yet...

Before changing limits we maybe should wait a bit longer. It might be (unpolular opinion) that the BTC price will go down again to levels of 10-20k USD and then we would need another adjustment. Also not clear how we deploy it, if its done via activation date it would have a delay of 1-2 months so adding more risks that our guess would be off at time when it gets activated.

[sqrrm]

I think using the bisq price feed could work. The changing sizes would cause some trouble but allowing a fair margin to current price should avoid most issues for most honest users. Still needs a lot of special case handling. Would be a lot easier to do with a no fee tx offer model where no bitcoin is committed until the offer is taken.

[chimp1984]

There is a DAO param (MAX_TRADE_LIMIT) which determines the max trade limit which is 2 BTC atm. It could be changed by max hlaf/double, so 1 BTC or 4 BTC.
But offers with currently max limit of e.g. 2 BTC would not be valid for taking anymore after change. So that would require some non-trivial code change to look up the DAO param value at create offer time and verify against that. We do not have the block height but only the date. But block height would be needed to find the past cylces param value.
One solution could be to update the offer so it will become a min-max amount offer and the min amount is set to the new limit.
But I think its better to invest dev efforts into a better concept with acts more dynamically and automated on price changes.

[m52go]

BTC has gone up another 10,000 USD since this proposal was discussed.

Could it be more feasible to instead implement a toggle on offers made by signed sellers so that only unsigned buyers could take them, and to advise these sellers to make such offers smaller? 0.01 BTC is currently >400 USD, whereas the lower limit for getting an account signed is 0.0025 BTC, which is just above 100 USD.

In this way, there doesn't need to be a hard fork mess, but sellers (likely those who are more active Bisq users) can be more protected from scammers. I realize such a measure would fragment the markets a bit but we've seen what can happen without signing...also this toggle idea was discussed before and reaction was generally favorable from a trading standpoint.

[pazza83]

I think making lots of lower offers for new users is a good idea. Not sure they need to be restricted to new users only. I think the higher premiums would themselves put off existing signed account holders that could buy more BTC at lower premiums.

I would be happy to do this just waiting for the mempool to calm down a bit. The high miner fees do not make small offers attractive to place currently.

[MwithM]

To stop having to go through the hassle of changing it, what about removing the min security deposit and keep the min 15% security deposit for all trades, even smaller ones?

[pazza83]

I have considered this before. However I do think having a set minimum security deposit floor amount ensures that all traders have a minimum amount of skin in the game.

For example in a $100 trade for BTC I would consider $15 too low for any of the following:

• Mentioning Bitcoin in payment reference,
• Paying user from wrong account
• Attempting a scam
• Fishing for account user / data
• Compensating the innocent party for the time spent dealing with any of the above

0.006 BTC means that all traders traders have ~$300 on the line for their trade. This seems a good amount to me, if a little inaccessible for new users looking to start with small trades.

[Conza88]

To stop having to go through the hassle of changing it, what about removing the min security deposit and keep the min 15% security deposit for all trades, even smaller ones?

I am for removing min security deposit entirely. With a warning perhaps that there is no security deposit, for someone offering 0% (or make 1% default) that... and for someone accepting that... with the option they can disable that popup message.

The economics (value free analysis) are pretty clear cut—any minimum excludes those from entering the market. You will continually have to re-adjust as price rises.

Just like minimum wage laws e.g. $15per hour, make it illegal to hire anyone below that amount (FORCED UNEMPLOYMENT) and net loss of jobs that otherwise would have been created, it hurts and harms the poorest and least skilled in society (the exact people it was meant to help). Unions also love it, because it reduces labor competition (younger less skilled folk entering the market, increasing supply of labor). For anyone not grasping the principle ask yourself, why not a minimum wage of $100 per hour? $1,000?! what happens then. Exact same, where the marginal rate of productivity is lower than the wage rate—it is not viable to employee the individual.

What happens after such a policy is put in place i.e. $15? More costly to hire people, so a few may keep the rise, others lose their jobs - and get replaced by capital (i.e. touch screens at McDonalds), and more historically no more elevator assistants.

What happens here? Folks can't use Bisq. How in the world are we meant to HELP THOSE IN NEED in the nations that NEED BISQ THE MOST?! You're literally barring those in Venezuela, and other 3rd world nations - vast swathes of humanity from using Bisq. Seriously.

What's the point of spending time and resources adding payment methods for them—when this barrier to entry still exists for most there?

Why not try freedom? Two individuals agreeing to the terms?

In conjunction with this, also think should be able to change security deposit % for maker, and taker. e.g. as a BTC Buyer, I'd have no problem putting 100% security deposit to signal I am trustworthy... come sell me BTC. As a seller, I'd be inclined to use those who have higher security deposit for them, and less for me.

Again, should be adjustable to those setting the 'contract' for trade. And warnings / education provided clearly about what effects things have e.g. security deposit is important because...

[pazza83]

Why not try freedom? Two individuals agreeing to the terms?

I agree that individuals should be able to set their own terms, but when using a platform like Bisq they have to adhere to defined rules. You could take it a step further and say that users should be able to choose the trade fees they pay, or the trade window etc, but it would be chaotic and difficult to manage, and would not be in the best interest of Bisq.

Removing security deposits entirely would lead to lots of option trading, If I am a BTC buyer and take a trade and the market falls by 5% what incentive is their for me not to to walk away from the trade?

[Conza88]

I agree that individuals should be able to set their own terms, but when using a platform like Bisq they have to adhere to defined rules. You could take it a step further and say that users should be able to choose the trade fees they pay, or the trade window etc, but it would be chaotic and difficult to manage, and would not be in the best interest of Bisq.

Haha, fair enough. Adds complexity. Suppose part of service and customer experience is via protcol/process and simplifying things so less involved/smoother transactions, no issues etc.

Removing security deposits entirely would lead to lots of option trading, If I am a BTC buyer and take a trade and the market falls by 5% what incentive is their for me not to to walk away from the trade?

Besides my sense of honour & integrity? Not wanting to get blocked, or piss off a seller? (the hand that feeds me? lol).
Nah, fair point. Why did BTC seller not put a security deposit request for buyer then? They certainly haven't thought it through.
Clear warnings etc. would help educate.

I'll back-track the 'freedom' angle, given naturally all of this is voluntary... but regardless of that the economic effects still occur whether a price control is set by a central planner, or protocol.

[pazza83]

Besides my sense of honour & integrity?

Maybe not everyone will have the same sense of honor and integrity as you. Especially on a decentralized, somewhat anonymous platform. Or maybe I am just being cynical!

Not wanting to get blocked, or piss off a seller? (the hand that feeds me? lol).

It would be easy to just set up a new onion address. I imagine you could to this will altcoins all day long and it would be hard for Bisq to prevent. Take an offer, if the price moves in the direction for you complete, if it goes against you walk away.

Nah, fair point. Why did BTC seller not put a security deposit request for buyer then? They certainly haven't thought it through.
Clear warnings etc. would help educate.

Yes, I think that sellers put a security deposit request for buyer. They would only have to get burnt a few times (with no deposit trades) with wasted trade fees and miner fees before they decided it wasn't worth it. That is just my opinion though, some people might have more patience and tolerance of miner fees / trade fees wastage than me!

[sqrrm]

Free is good, but that also means free from mediation and arbitration within the bisq network. The cost of these services means the DAO has to take some care to keep the incentives aligned. We have seen that 10% deposit hasn't been enough to keep the mediation cases low in volatile times so I think 15% is quite reasonable as a minimum.

Reducing the absolute minimum probably makes sense with these higher bitcoin prices though.

[pazza83]

@huey735 and @MwithM this might be a good issue for a poll

[huey735]

@pazza83 I haven't been following the finance side of Bisq. I think anyone can suggest a poll on Discussions

[pazza83]

Thanks I did not realize it was for discussions only.

[pazza83]

With BTC on the rise again I thought I would share my thoughts about this proposal:

• Reduce minimum security deposit to 0.003 BTC.
• Keep limits for unsigned traders to 0.01 BTC.
• Keep limits for all payment methods the same as current.

[m52go]

Yeah this proposal needs more attention.

Maybe it would be easier to translate talk into action by splitting into separate proposals that only concern distinct variables:

• minimum security deposit (currently 0.006)
• maximum signing amount (currently 0.01)
• trade size scaling factor (currently 2)

[BtcContributor]

I think this is the most prioritary change that we need to implement ASAP.
It is easy to do and will probably bring a lot of liquidity easy.

[pazza83]

Yeah this proposal needs more attention.

Maybe it would be easier to translate talk into action by splitting into separate proposals that only concern distinct variables:

• minimum security deposit (currently 0.006)
• maximum signing amount (currently 0.01)
• trade size scaling factor (currently 2)

@m52go

Good idea might help get to consensus quicker.

I would be happy to make a proposal for the first two, if you could do the third one (I am not fully aware of how trade size scaling factor works)?

[MwithM]

Closing as superseeded.