How to Bootstrap a DAO
The Bisq P2P exchange, DAO and BSQ token
What Bisq is
A decentralized bitcoin exchange
A peer-to-peer bitcoin exchange
desktop application
trading protocol
p2p network
Why Bisq exists
Bisq’s mission is to provide a secure, private and censorship-resistant way to exchange bitcoin for national currencies and other cryptocurrencies over the internet
Bisq’s mission is to provide a secure, private and censorship-resistant way to exchange bitcoin for national currencies and other cryptocurrencies over the internet
Bisq’s mission is to provide a secure, private and censorship-resistant way to exchange bitcoin for national currencies and other cryptocurrencies over the internet
Bisq’s mission is to provide a secure, private and censorship-resistant way to exchange bitcoin for national currencies and other cryptocurrencies over the internet
secure: your funds are safe
private: you control your own info
censorship-resistant: you can trade without interference
How Bisq works
$
Buyer
You want to buy BTC
Seller
They want to sell BTC
[screenshot of clicking ‘payment initiated’ in Bisq]
[waiting]
[screenshot of seller receiving USD]
[screenshot of clicking ‘payment received in Bisq]
[screenshot of buyer receiving BTC]
How trading with Bisq is different
No automatic order matching
Protocol coordinates out-of-band fiat payments
Settlement takes longer, but in return trading is...
Far more secure, private and censorship-resistant
How Bisq helps you keep your funds secure
Entirely non-custodial with regard to crypto and fiat
Security deposits from both buyer and seller
2-of-3 multisig escrow with 3rd key held by arbitrator
Decentralized arbitration system to handle disputes
How Bisq helps you keep your data private
No registration or identity verification
Every Bisq app is a Tor hidden service
No central servers or databases to record data
P2P network data is encrypted
How Bisq helps you resist censorship
Fully decentralized (distributed!) P2P network
P2P network inherits Tor’s own censorship-resistance
Bisq is just code, not a company or other legal entity
Bisq’s current status
How the Bisq project is funded today
Trading fees are paid in BTC to arbitrators
Fees total ~1 BTC/mo across two arbitrators
Project still primarily funded out-of-pocket by founders
No decentralized way to compensate other contributors
How the Bisq project is governed today
Small team of contributors
Centralized maintenance, administration and operation
Founders are decision makers
Bisq’s technology is decentralized...
… but Bisq’s governance is not
Mission status
[x] Secure
[x] Private
[-] Censorship-resistant
[x] P2P network over Tor + other protections
[ ] Decentralized Funding
[ ] Decentralized Governance
What Bisq needs now
Continued trading volume growth so revenues cover expenses
Scale up contributions to improve Bisq and foster that growth
Decentralized compensation model to incentivize contributions
Decentralized responsibility model to avoid censorship
Bisq’s technology is decentralized...
… and under the DAO,
its governance is too
The Bisq DAO
BSQ
Traders
Contributors
use
maintain
BSQ
2.5
2,500,000
=
Past
Contributors
144
0.00000100
÷
colored
into
Supporters
have donated
distributed
on merit to
~
BSQ
ICO
BSQ
Contributors
work to improve
gets more useful over time to
Traders
use
pay trading fees in BTC
Arbitrators
arbitrators
compensated
automatically
no way to compensate
others
BSQ
Traders
Contributors
Stakeholders
a) sell BSQ
compensation requests
a) submit
vote with BSQ on
work to improve
gets more useful over time to
b) buy BSQ
1. Trading
use
b) earn BSQ
3. Earning
High-Trust Roles
eg. Arbitration
a) post BSQ bond to take on
5. Bonding
b) earn interest
on BSQ bond
4. Voting
2. Spending
pay trading fees in BSQ
at a discount
pay trading fees in BTC
arbitrators
compensated
automatically
BSQ
Traders
Contributors
Stakeholders
a) sell BSQ
compensation requests
a) submit
vote with BSQ on
work to improve
gets more useful over time to
b) buy BSQ
1. Trading
use
b) earn BSQ
3. Earning
High-Trust Roles
eg. Arbitration
a) post BSQ bond to take on
5. Bonding
b) earn interest
on BSQ bond
4. Voting
2. Spending
pay trading fees in BSQ
at a discount
pay trading fees in BTC
arbitrators
compensated
automatically
do not directly compensate contributors!
BSQ
Traders
Contributors
compensation requests
use
3. Earning
2. Spending
pay trading fees in BSQ
at a discount
decreases
total supply
increases
total supply
BSQ destroyed
b) earn BSQ
BSQ created
a) submit
The Bisq DAO: Risks
Risks of rolling out the Bisq DAO
Valuation risk: token value falls too low to be viable (or rises too high too quickly)
Control risk: any kind of non-meritocratic takeover of voting power
Censorship risk: founders are pressured before governance is fully decentralized
Credibility risk: founder-heavy initial distribution, small team, etc
Solvency risk: trading volumes do not grow quickly enough to cover compensation
Stability risk: implementation problems cause loss of funds
Any of these risks could be existential
The Bisq DAO: Phase Zero
Goal of Phase Zero
Bootstrap the Bisq DAO immediately
While minimizing risks
tBSQ
Traders
Contributors
Stakeholders
a) sell BSQ
compensation requests
a) submit
vote with BSQ on
work to improve
gets more useful over time to
b) buy BSQ
1. Trading
use
b) earn BSQ
3. Compensation
High-Trust Roles
eg. Arbitration
a) post BSQ bond to take on
5. Bonding
b) earn interest
on BSQ bond
4. Voting
2. Access
pay trading fees in BSQ
for a 90% discount
pay trading fees in BTC
arbitrators
compensated
automatically
tBSQ
Traders
Contributors
Stakeholders
a) sell BSQ
compensation requests
a) submit
vote with BSQ on
work to improve
gets more useful over time to
b) buy BSQ
1. Trading
use
b) earn BSQ
3. Compensation
High-Trust Roles
eg. Arbitration
a) post BSQ bond to take on
5. Bonding
b) earn interest
on BSQ bond
4. Voting
2. Access
pay trading fees in BSQ
for a 90% discount
pay trading fees in BTC
arbitrators
compensated
automatically
Phase Zero: Approach
Prohibit BSQ token trading
Issue initial 2.5 MM BSQ tokens on testnet
Rebase to 2.5 MM and re-issue new genesis every month
Start with simple, high-trust tools
Voting tracked by spreadsheet, compensation requests via GitHub
Iterate toward sophisticated, low-trust tools
Continue growing exchange volume organically
Phase Zero: Roadmap
Inception with testnet genesis distribution today
Duration of at least 6 months
Completion
with mainnet genesis distribution and
Bisq release supporting BSQ trading + fee pmt
https://explorer.bisq.network
Process and Tools
C4 / Social Architecture
GitHub
Slack / Matrix
How to Bootstrap a DAO
Build a useful decentralized app first, build a DAO around it later
Take an iterative approach
Have a 0.* pre-release phase
Consider restricting trading of DAO tokens; allow earning and voting only
Design carefully for a sustainable meritocracy
Avoid immature dependencies; if it’s mission critical, build it yourself
Join Us!
bisq.network/downloads
@bisq_network
github.com/bisq-network