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| − | The Bisq exchange network is organized as a '''decentralized autonomous organization''' (DAO). The DAO's purpose is to make Bisq's governance model as decentralized and censorship-resistant as the Bisq network itself. | + | The Bisq exchange network is organized as a decentralized autonomous organization (DAO). The Bisq DAO's purpose is to make the Bisq's governance model as decentralized and censorship-resistant as the Bisq network itself. |
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| | The Bisq founders realized that decentralized software—no matter how technically robust—is no good if it’s still controlled by a single entity. All the software’s technical strength would be worthless if the whole project could be ruined by attacking the single entity that runs it. | | The Bisq founders realized that decentralized software—no matter how technically robust—is no good if it’s still controlled by a single entity. All the software’s technical strength would be worthless if the whole project could be ruined by attacking the single entity that runs it. |
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| | The Bisq project needed infrastructure to provide these functions, and the Bisq DAO is its solution. | | The Bisq project needed infrastructure to provide these functions, and the Bisq DAO is its solution. |
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| − | You can see a video version of this introductory article in [https://www.youtube.com/playlist?list=PLFH5SztL5cYPAXWFz-IMB4dBZ0MEZEG_e this YouTube playlist].
| + | '''''This page collects all resources which aim to help you learn more about the Bisq DAO, what it is, and how it works!''''' |
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| − | __TOC__
| + | == General Informtation == |
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| | + | === Introduction to the DAO === |
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| − | =What is a DAO?=
| + | [[Introduction_to_the_DAO|A plain language introduction to the Bisq DAO]] |
| − | {{What is DAO}}
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| − | =The Bisq DAO= | + | === Bisq DAO in Brief (videos) === |
| − | The Bisq DAO forgoes a system where governance is dictated by the rigid rules of software in favour of a self-contained economy where governance is ''guided'' by software but ultimately determined by the collective, subjective judgments([[Voting]]) of its community.
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| − | It achieves this by introducing a unit of value called the '''[[BSQ| BSQ token]]''' that enables Bisq [[Stakeholder|stakeholders]]—[[Category:Contributor_Docs|contributors]], [[traders]], or anyone who owns [[BSQ]]—to make subjective value judgments. This token underlies all actions in the DAO.
| + | [https://www.youtube.com/playlist?list=PLFH5SztL5cYPAXWFz-IMB4dBZ0MEZEG_e Quick, short video series] on the Bisq DAO. Get up to speed with a handful of 3-4 minute videos. |
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| − | ==BSQ Token== | + | === Bisq DAO Basics (videos) === |
| − | {{:BSQ#BSQ Token}}
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| − | ==Overview== | + | [https://www.youtube.com/playlist?list=PLFH5SztL5cYOLdYJj3nQ6-DekbjMTVhCS A more thorough treatment] of the DAO covering everything from the basics of bitcoin transactions and colored coins to the economic and technical roots of the BSQ token and how it powers the Bisq DAO. |
| − | Here’s a graphical overview of how the DAO works at a high level:
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| − | [[File:User-dao-diagram.png|thumb|User-dao-diagram]]
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| − | Let’s observe some of the dynamics of this system:
| + | == User Guides and Use Cases == |
| − | * [[Category:Contributor Docs|Contributors]] ''maintain'' Bisq through valuable work
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| − | * [[Traders]] ''use'' Bisq to buy and sell bitcoin and other cryptocurrencies
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| − | * [[Category:Contributor Docs|Contributors]] ''earn'' BSQ tokens when their compensation requests are approved through voting
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| − | * [[Traders]] ''buy'' BSQ tokens in order to pay lower trading fees
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| − | * [[Stakeholders]] ''vote'' on compensation requests
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| − | * [[Category:Contributor Docs|Contributors]] can ''lock'' a [[bond]] in BSQ to ensure integrity in high-trust [[Category:Roles]]
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| − | Now let’s see how these dynamics enable the Bisq DAO to provide 3 core governance functions without any central points of authority.
| + | === User Guide for Traders === |
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| − | ==Earn and distribute revenue==
| + | [[DAO_user_guide_for_traders|Use BSQ]] to get lower trading fees and compensate contributors |
| − | Every project needs to be financially sustainable to fund ongoing operations and development. But traditional means of handling revenue and revenue distribution are necessarily centralized—any receiving address or account must be owned by one person, or a small group; determining how much a person should be paid must be determined by one person or a small group; etc.
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| − | ===Contributors produce, creating BSQ=== | + | == Contributor Docs == |
| − | In the Bisq DAO, trading fees are collected from traders and distributed to contributors, but there is no central authority to do this. Here’s how it works: after a Bisq contributor does work, they file a '''[[compensation]] request''' in the DAO with a description of what they did and how much BSQ they want in return. Then, stakeholders (who are other contributors, traders, and anyone else with BSQ) vote for/against the request. If the request is approved, the contributor is issued new BSQ in the amount they requested and '''BSQ supply is increased'''.
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| − | ===Where does new BSQ actually come from?=== | + | === User Guide for Contributors === |
| − | Recall that a BSQ token is merely coloured bitcoin. When a contributor makes their compensation request in the DAO, they must also include the tiny amount of bitcoin to be 'coloured' as BSQ ([[Bisq_DAO_technical_overview|the spec]] requires 100 satoshis). So if a contributor requests 1,000 BSQ, they will need to include 100 * 1,000 = 100,000 satoshis with their compensation request—just about 10 USD at a rate of 10,000 USD/BTC.
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| − | If their request is approved, those satoshis are 'colored' and recognized as 1,000 valid BSQ tokens on Bisq. Assuming a BSQ market value of 1 USD (exact value will fluctuate), the contributor will have been granted 1,000 USD worth of BSQ for a negligible cost of 10 USD.
| + | [[DAO_user_guide_for_contributors|Govern Bisq]] through the DAO by obtaining Bisq, making proposals and voting |
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| − | ===Traders consume, burning BSQ=== | + | === Contributor Checklist === |
| − | Then, a [[trader]] looking for lower trading fees can buy those BSQ tokens from a contributor. When they buy BSQ tokens for BTC, the contributor is paid for their work, and the value transfer from producer to consumer is complete! When a trader pays trading fees with BSQ, those BSQ tokens are burned or "decoloured" and '''BSQ supply is decreased'''. This process of creating and destroying BSQ tokens enables a sort of monetary policy controlled by Bisq stakeholders and traders.
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| − | In this way, there is no need for a central entity to collect and distribute revenue: the BSQ token enables a transfer of value from producer to consumer without any single entity controlling any aspect of the decision-making or distribution process.
| + | [[Contributor_checklist|The one-stop doc]] to help you start contributing to Bisq. |
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| − | * The Bisq DAO does not require traders to use BSQ for trading fees. They’re free to pay trading fees directly with BTC, but they will pay higher rates than if they bought BSQ with BTC and paid with BSQ instead.
| + | === Requesting Compensation and Voting === |
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| − | ====Note on BTC revenues====
| + | Contributed to the Bisq Network? Great (and thank you!). [[Compensation|Here is how to request compensation for your work.]] |
| − | In the past, before the Bisq DAO launch and before the integration of Bisq’s new trade protocol, trading fees were only collected in BTC and only went to arbitrators. There was no mechanism to distribute them to other contributors. The DAO solves this distribution problem with BSQ through the process outlined above.
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| − | But since traders can still pay trading fees with BTC, where do those BTC fees go?
| + | === DAO Proposals === |
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| − | BTC fees go to a bitcoin "donation" address held by a [[Donation_Address_Holder|bonded contributor]], who uses the BTC to buy BSQ on a regular basis to distribute the BTC fees to stakeholders, and the BSQ obtained [https://github.com/bisq-network/proposals/issues/55 is burned].
| + | How to make a [[Proposals|proposal]] to the DAO. |
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| − | ==Determine strategy== | + | == Reference Material == |
| − | Another point of centralization in traditional organizations is with strategy. How can a project determine strategy without some form of designated leadership: an executive, manager, or leader to give direction and allocate resources?
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| − | The Bisq DAO beats this tradition with collective decision-making on strategy and other matters through '''weighted voting''' based on BSQ stake.
| + | === Bisq DAO Technical Overview === |
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| − | Here’s how it works: any [[stakeholder]] can make a proposal in the DAO. It can be anything: a change in a [[DOA_PARAM|trading parameter]], a new bonded [[Category:Roles|role]], or even something more generic like an adjustment of the overall project strategy. [[Stakeholders]] vote on the proposal, and their voting weight is based on BSQ stake, through a combination of two metrics:
| + | [[DAO_technical_overview|Technical details]] of (1) what BSQ tokens actually are, how they’re created, and how they’re destroyed and (2) the various functions of the Bisq DAO and how BSQ enables them. The document includes several example transactions so you can explicitly see the processes. |
| − | * amount of BSQ committed to a particular vote
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| − | * amount of BSQ earned over time through contributions
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| − | Taking both metrics into account discourages deep-pocketed whales from suddenly seizing control of the project, while still valuing dedicated stakeholders with consistent contributions over time. It brings about a '''strict meritocracy''' in which people need to somehow buy in to the Bisq project in order to take part in its governance, and the more significant their stake, the stronger their voice.
| + | === Phase Zero: A Plan for Bootstrapping the Bisq DAO === |
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| − | In this way, there is no need to rely on a single leadership team for direction: the community collectively manages itself.
| + | [[Phase_zero|An overview]] of the philosophy behind Bisq, the Bisq DAO, why both were created, and how it planned to decentralize its own governance from the very beginning. |
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| − | ==Ensure honesty in high-trust roles==
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| − | Despite the Bisq project’s attempts to resist concentrating control as much as possible, it’s impossible to avoid in some places. Domain name owners, social account admins, mediators, various node operators: these are all roles that must exist, but necessarily retain significant control and require a high degree of trust.
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| − | Part of the benefit of a centralized team of thoroughly-vetted people reliant on a paycheck, as is the case in most companies, is that the risk of trusting people with significant responsibility is lower: they have a lot to lose if the company finds they have violated their integrity and engaged in foul play.
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| − | This dynamic can be reproduced—at least partly—in a project without a central authority through bonding. The concept is simple enough: create skin in the game. Require that a person interested in taking on a high-trust role post a [[bond]] that’s high enough to discourage them from engaging in foul play.
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| − | But what happens if that person goes rogue? In a project without central authority, who decides when they’ve crossed the line, and what their fate should be?
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| − | As with strategy and compensation, the community decides through voting. Anyone who suspects foul play can make a case for confiscating a bond with a new proposal, and stakeholders vote to determine an outcome.
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| − | * Confiscating a bond is a harsh penalty which should not be taken lightly. Therefore, the Bisq DAO makes confiscation proposals especially hard to approve: they require a quorum of at least 200,000 BSQ and 85% acceptance to pass (instead of the typical >50%).
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| − | In this way, the risk that people in high-trust roles misbehave is minimized, and the community has access to a responsible mechanism for handling such a scenario in cases that warrant it.
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| − | =Learn more and stay in touch=
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| − | To learn more about the Bisq DAO, please see:
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| − | * The [[Category:DAO| DAO Category]]
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| − | * Bisq [[DAO user reference]], a doc which offers practical details on the workings of the DAO, along with high-level technical details.
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| − | * Bisq [[DAO technical overview]], along with technical details of BSQ tokens, this doc shows example transactions for several DAO functions.
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| − | * [[Phase Zero: A plan for bootstrapping the Bisq DAO]], a doc which offers a more comprehensive overview of Bisq and the Bisq DAO.
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| − | * [https://www.youtube.com/playlist?list=PLFH5SztL5cYOLdYJj3nQ6-DekbjMTVhCS Bisq DAO Basics], a YouTube video series that covers foundational concepts underlying the DAO such as bitcoin transactions, coloured coins, etc.
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| − | Feel free to get in touch with us on [https://twitter.com/bisq_network Twitter], [[Keybase]], or [https://bisq.community/ the forum].
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| − | = User Guides =
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| − | * [[User Guide: Bisq DAO for Traders]] — Use BSQ to get lower trading fees and compensate contributors
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| − | * [[User Guide: Bisq DAO for Contributors]] — Govern Bisq through the DAO by making proposals and voting
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| − | [[Category:DAO]]
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The Bisq exchange network is organized as a decentralized autonomous organization (DAO). The Bisq DAO's purpose is to make the Bisq's governance model as decentralized and censorship-resistant as the Bisq network itself.
The Bisq founders realized that decentralized software—no matter how technically robust—is no good if it’s still controlled by a single entity. All the software’s technical strength would be worthless if the whole project could be ruined by attacking the single entity that runs it.
Thus the need for decentralizing the resources in charge of running Bisq itself. These resources cannot be organized in the form of a company, a nonprofit, or any other traditional organization because a single entity would be a single point of failure. But what to do? How can a project do anything useful without becoming an organization with some kind of structure? How can strategy be determined? How can resources be allocated? How can work get done? How can revenue be earned, and how can it be distributed?
The Bisq project needed infrastructure to provide these functions, and the Bisq DAO is its solution.
This page collects all resources which aim to help you learn more about the Bisq DAO, what it is, and how it works!
General Informtation
Introduction to the DAO
A plain language introduction to the Bisq DAO
Bisq DAO in Brief (videos)
Quick, short video series on the Bisq DAO. Get up to speed with a handful of 3-4 minute videos.
Bisq DAO Basics (videos)
A more thorough treatment of the DAO covering everything from the basics of bitcoin transactions and colored coins to the economic and technical roots of the BSQ token and how it powers the Bisq DAO.
User Guides and Use Cases
User Guide for Traders
Use BSQ to get lower trading fees and compensate contributors
Contributor Docs
User Guide for Contributors
Govern Bisq through the DAO by obtaining Bisq, making proposals and voting
Contributor Checklist
The one-stop doc to help you start contributing to Bisq.
Requesting Compensation and Voting
Contributed to the Bisq Network? Great (and thank you!). Here is how to request compensation for your work.
DAO Proposals
How to make a proposal to the DAO.
Reference Material
Bisq DAO Technical Overview
Technical details of (1) what BSQ tokens actually are, how they’re created, and how they’re destroyed and (2) the various functions of the Bisq DAO and how BSQ enables them. The document includes several example transactions so you can explicitly see the processes.
Phase Zero: A Plan for Bootstrapping the Bisq DAO
An overview of the philosophy behind Bisq, the Bisq DAO, why both were created, and how it planned to decentralize its own governance from the very beginning.
