Thoughts on Bisq growth

[flix1]

Bisq needs to have a growth plan, just as any startup would.

This is absolutely conditioned to the DAO making a profit and staying profitable. There's no point in hiring a bunch of people, train them and then have to fire them later because you cannot afford them. Headcount growth can be quite organic, with new team leads coming from existing team members, core contributors being hired from experienced external contributors and these being hired from people that have already worked on bounties or one-off projects.

Bisq is and will always be FOSS. So anybody can always make a proposal on github and, if accepted by the DAO, start working on it and request compensation for it later. Just because this is shown in the same diagram as if it was a startup, it does not mean it is centralised.

The idea is to imitate Bitcoin. Miners, node runners, wallet devs, blockchain explorers and many others "work" for the bitcoin DAO, but do so independently

It's hard to imagine... but we have already seen it happen on Bitcoin and now we are seeing it on Nostr. Different teams, different implementations, varied business models... all using the same protocol.

[flix1]

If Bisq 2 is as open and modular a platform as planned... we could have completely external teams building their own apps on it completely indepently of Bisq and the DAO.

We could see:

-Blockstream build an app for Liquid assets -RGB guys build an app to trade their assets. -Hodlhodl building a lending app -Robosats build a lightning based exchange app -Cashu build an app to exchange their minted ecash tokens -Peach build a mobile app -10101 build an app to trade options and futures -LNMarkets futures, options app -Coinjoin apps -Monero atomic swap apps -Bisq Easy app -Bisq 2-of-2 ms -Bisq 2-of-3 ms with arbitration -Simple "buy your first sats with one click" apps, both P2P and centralised. ...and a lot more...

But the point is that each of these can be built by a different team. With little or no input from Bisq teams and with no responsability or permission by Bisq (and no possibility of censorship).

[flix1]

One aspect I forgot to mention is security.

For legal, opsec and decentralisation reasons each team should act as an independent cell: -full internal communications within the team. -Inter-team coordination should be via the DAO and in public (github, etc). -Anonymity to be encouraged with nyms, different usernames, etc.

Ideally contributors true names should not be known. When there is an attack on one contributor (be it by authorities or hackers) it should not endanger anybody in other teams.

This is another important reason to encourage external contributors and one-off collaborations. When an external team is hired to complete a project, they complete the work and then disappear like Satoshi... risk is reduced for everyone.

For recurring tasks (support, mediation, pricenodes, refund agents, etc) should be open to markets and decentralised following the model of Bitcoin miners - meaning that compensation should come automatically from the trade protocol, rather than rely on a monthly compensation request (this is how arbitrator compensation worked back when Bisq protocol was 2-of-3 multisig with arbitration). It should be 100% based on proof-of-work, so that no identity is needed and these can be replaced frequently with no penalty. BSQ Bonds can be used for assurance, instead of reputation.

...and of course as a fallback, there should be a Bisq Ragnarok Release ready. If a very strong attack comes that scares away all contributors for a time, a simplified version of Bisq that can work for years with no support or dev work should be released.

[leo816]

Couldn't agree more. I think that right now that is being done progressively, the trouble is some of the roles that will be critical in the near future are not operational or fully defined yet (the same way a bitcoin miner could come in and out) but on the topic of having different communities that take care of several trading protocols, we have open communication channels with some of the entities you've mentioned, getting ready for when bisq 2.0 is ready.

In terms of privacy my only concern is the new BM role and how it incentivises contributors to use the same identity again and again. The barrier of entry for new BMs is getting higher every cycle and It is pretty clear now how different the profitability is depending on the economies of scale so it essentially means a huge loss for a contributor that wants to change his handle if there is a identity leak or something along those lines. Not sure what the solution could be but it's definitely a concern.

[HenrikJannsen]

In terms of privacy my only concern is the new BM role and how it incentivises contributors to use the same identity again and again. The barrier of entry for new BMs is getting higher every cycle and It is pretty clear now how different the profitability is depending on the economies of scale so it essentially means a huge loss for a contributor that wants to change his handle if there is a identity leak or something along those lines. Not sure what the solution could be but it's definitely a concern.

I think there is a misunderstanding. You could create a new identity and use the for a new BM every cycle and the profit will be the same as if you would aggregate all. It might look different due the complexity of the aggregated and decayed accounting. But the math behind the aggregation of one BM identity and multiple identities is the same. One must not forget that theoretically a BM gets into profit zone in 1 year (decay time). If one has a BM which has aggregated many burn events already then the profitability seems to come earlier due the accumulation of the payout shares from each burn event. Imagine it as multiple layers of linear decays based on the burn amount.

[leo816]

and the profit will be the same as if you would aggregate all.

100%, what I mean is that if someone invested for example 50k BSQ over a period of 10 months on a BM, they are incentivised to continue with that identity because starting with the same burning progression on a new identity will incur in a huge loss on profitability, Ideally they can put 50k BSQ upfront and have the same profitability but for the average contributor who is unable to do that, the loss of changing identity is too big. (also if you want to change identity you may want to do it progressively so that is not obvious and that also means a loss)

[HenrikJannsen]

No, thats not the case. Example: Burn 1000 BSQ, assume thats 1% receiver share and assume thats is 100 BSQ per month. Decay is 10 months. So first month you get 100, then 80, then 60...
Accummulated profit from a one time burn:

1. month: 100
2. month: 280 (100+80)
3. month 340 (100+80+60)
4. month: 480 (100+80+60+40)
5. ....

If you burn the second month 1000 BSQ you accumulate the profits for the every burn event.

1. month: 100
2. month: 100 + 280
3. month 280 + 340
4. month: 340 + 480
5. ....

If you burn the third month again 1000 BSQ

1. month: 100
2. month: 100 + 280
3. month 100 + 280 + 340
4. month: 280 + 340 + 480
5. ....

So profit gets more progressive.

But it is the same as if you would burn with 3 independent identities as its all just sums. But the individual profit progression is lower so it might give the impression its less profitable.

[flix1]

As detailed here https://github.com/bisq-network/roles/issues/111

Bisq DAO was profitable for 7 out of 10 months in 2023 so far. I expect 2023 will end firmly in the black.

It is the right time to consider growth plans.

As mentioned above: organic, staying lean and profitable. Never over-expanding. relying as much as possible on external contributors on a per-project basis, etc...

But some thought and plannning should start to be put into this, for execution in 2024.

For example if we wanted to grow from the 2023 to 2024 situation in the above diagram, over 2024 the DAO would need to recruit 2-3 additional team leads to lead projects in growth, security, infrastructure. In turn each of these would over the course of the year recruit 2-3 team members each and/or external contributors. Existing teams would also grow by recruiting 1-2 new contributors each. In total we are talking about growing the number of contributors by ~20-30% in 2024. In practice that means "hiring" at most 1-2 people per month over the course of the year.

As P&L numbers in 2024 come out on a monthly basis this can be accelerated or slowed down, always with staying profitable in mind.

[namloan]

@flix1 thank you for sharing your thoughts here. Looks exciting!

Using the average profit from April 2023 until October 2023 (33408 USD, 0.7534 BTC) and using the average monthly closing price since April 2023 for BTC (31026 USD) to predict profit for the whole 2023 / 24 fiscal year:

	Profit (USD)	YoY profit growth (USD)	Profit (BTC)	YoY profit growth (BTC)	YoY BTC price growth
2021 / 22	243951		5.07617878
2022 / 23	322914	32.37%	13.37893602	163.56%	-49.78%
2023 / 24	400901	24.15%	9.04090765	-32.42%	28.55%

The YoY profit growth curve is decreasing in both USD and BTC terms despite market conditions being more positive. Any thoughts on this?

[pazza83]

The YoY profit growth curve is decreasing in both USD and BTC terms despite market conditions being more positive. Any thoughts on this?

I think the main thing that has decreased DAO profits are:

Change to Burning Man Protocol

The change to the burning man protocol has had many benefits in terms of decentralizing an important aspect of Bisq. The downside is that ~30% of the 'revenue' from the delayed payout transactions is distributed to the burning men as opposed to being distributed to the DAO. So far, for every 1 BTC distributed to the burning men they burn 0.7 BTC worth of BSQ. Hopefully this will increase overtime.

Increase in contributors compensation

Bisq has been busy funding the development of Bisq 2. Compensation to contributors has increase in USD terms as more contributors have been added and more developers have joined.

I think it would be great to have a growth plan for Bisq. The more users Bisq has, and the more volume that goes through the platform the more profits Bisq will have to fund platform development.

The other factor that has a big potential to decrease profits in future years (in BTC terms) is an increase in BTC price. If bitcoin goes up 10X then potentially USD trade volume stays similar ~ $10,000,000 per month but BTC volume goes down by 10X. I think it would be good for this to be acknowledged and mitigated for, but that would likely mean going down the path of improving the use-case for users that want to trade altcoins on Bisq, a topic that can be controversial, and historically has not seen the same resources being allocated to it than improvements for fiat traders.

[HenrikJannsen]

The change to the burning man protocol has had many benefits in terms of decentralizing an important aspect of Bisq. The downside is that ~30% of the 'revenue' from the delayed payout transactions is distributed to the burning men as opposed to being distributed to the DAO. So far, for every 1 BTC distributed to the burning men they burn 0.7 BTC worth of BSQ. Hopefully this will increase overtime.

This can be changed if the existing BM or those who have the option to become a BM will burn more to the recommended amounts. But I also do not see that very negative as there is a big overlap of the active BM with the active contributors, thus giving them a higher profit might not be something that negative.

... improving the use-case for users that want to trade altcoins on Bisq...

As you noted it has been a controversial topic in the past and maybe even more so in the future. I think the goal of Bisq never was and should not be maximal profit but to be closest aligned to the reason why Bitcoin was created. As long Bisq is profitable enough to provide a viable funding base for contributors I see Bisq as success.

On the contrary, if Bisq would make much more profit but starts to make questionable compromises I would have my problems with seeing Bisq sticking to its vision (which maybe was never spelled out too concretely but is show by its actions - which counts more than words).

[pazza83]

I agree the burning man change has been a big positive for the decentralization of Bisq. Just think it will take some time for burn amounts to reach a closer equilibrium with bitcoin distributed. I imagine this will change over time, and I think there should be the expectation of profit for the burning men for it to work well.

As you noted it has been a controversial topic in the past and maybe even more so in the future. I think the goal of Bisq never was and should not be maximal profit but to be closest aligned to the reason why Bitcoin was created.

Yes agreed, the more time I have been in bitcoin the more I dislike fiat! I want Bisq to stick to it's vision. I see that as on-boarding and off-boarding as many users as possible that want to buy or sell bitcoin for something else of value (whatever medium that might be).

As long Bisq is profitable enough to provide a viable funding base for contributors I see Bisq as success.

I would add success should also be linked to the Bisq DAO succeeding. I see the DAO as the most valuable part of Bisq, and it is what attracted me to become a contributor. I think it works really well but no doubt there will be challenges to overcome in the future.

[MwithM]

The most valuable part of Bisq is enabling P2P trades, the DAO is just a mean to make this easier, but not the goal. The only DAO that matters is Bitcoin. If Bisq DAO was not successful but we could keep trading as usual with a ragnarok version or any other way of putting together buyers and sellers and settling the trade, it would still be a success.

I think that most of the BSQ needed to create Bisq 2 have been created already, and the BSQ price has been quite stable and even going up a bit. Being able to fund such a development is unexpected and good news to me.

[flix1]

1. China 🇨🇳 --> to prove censorship resistance. (pop: 1.4Bn)
2. India 🇮🇳 --> English speaking, tech savvy, weak currency. (pop: 1.4Bn)
3. Nigeria 🇳🇬 --> key to all Africa (pop: 200M)
4. Argentina 🇦🇷 --> highest inflation in Latam. Key to Spanish speaking world. (pop 45M)
5. Turkey 🇹🇷 --> high inflation. key to islamic finance. (85M)

The above 5 add 3bn+ people. Include all continents. Touch on a wide variety of cultures, religions, languages, legal systems. If we manage to find a contributor in each of those 5 countries to guide us, help us solve the problems that are blocking those markets, Bisq could grow a lot.

We have already had people from Nigeria, Argentina, China contribute in the past. See #274

In 2024 we could focus growth efforts on a different country each month.

Jan -> 1. China 🇨🇳 Feb -> 2. India 🇮🇳 Mar -> 3. Nigeria 🇳🇬 Apr -> 4. Argentina 🇦🇷 May-> 5. Turkey 🇹🇷 Jun -> 6. Russia 🇷🇺 Jul -> 7. Egypt 🇪🇬 Aug -> 8. Mexico 🇲🇽 Sep -> 9. ? Oct -> 10. ? Nov -> 11. ? Dec -> 12. ?

Country playbook. Actions:

week 1

1. Get local help & knowledge: recruit local contributors.
2. Testing: have local contributors do testing and report on problems.
3. Payment methods: make sure most used payment methods are working.
4. Translation: make sure local languages properly supported.
5. Fix other issues (price feeds, etc, etc.)

week 2

6. Understand competition: what are P2P traders currently using in that market?
7. Understand market: what is the average trade amount? payment methods? currency pairs? mobile?
8. Marketing: make sure P2P traders in x country know about Bisq.

week 3

9. Kickstart Liquidity: attract first few traders. Attract market makers.

week 4

10. Market Day: once everything is tested ad working do a market day event. Promote it.

[flix1]

So we have a calendar. A country list. Goals. A playbook. Work that needs doing. The obvious question that arises is... who is going to do it? What should the budget be?

I propose that we open a position for growth team lead to be filled by Jan 2024 and with a mandate to carry out this or a similar plan. Team budget should include compensation for team lead, but also some pre-approved funding to do some outsourced work and promotion. Other funding to be approved on a per-project basis as usual comp. requests.

The plan would be for this team lead to build a team over 2024 of 2-3 permanent contributors and 2-3 external contribs.

[pazza83]

I would be happy to help.

I think 12 countries per year might not be enough time to establish markets.

Both India and Argentina have had country specific payment methods created, yet no real trades have happened since these payment methods have been created.

I think focusing on these two countries first and only moving on when permanent markets have been created would be better than spreading the focus too thinly. It would also allow for costs spent on developing markets to be measured against the success.

Problem we have at the moment is on-chain mining fees, but maybe Bisq 2 can help mitigate this:

I think we should look for an Argentinian / India Bisq user that is happy to:

• Present Bisq 2 at local meet-ups
• Market Bisq 2 online in local languages
• Recruit users for specific bounties

Lets find out what it takes to establish local markets and once understood repeat it for other countries.

[flix1]

If in 2024 we could penetrate these 5 target markets (China, India, Nigeria, Argentina, Turkey)... that would be more than enough.

If successful, in 2025 we can expand from there. The teams built would have experience, local knowledge for the next step.

For example:

-Our guy in Nigeria, could easily contact people in Ghana, Cameroon, Angola to replicate what he had done. -Our guy in Argentina could then work on Mexico, Chile, Venezuela, Peru... -Our contributor in Turkey could easily coordinate in Egypt, UAE, Dubai...

[Ven32123]

As an outsider, 1) I think BISQ should also focus on reducing transaction fees/cost. For example if you purchase 100$ worth of BTC and you have to spend $5-$10 on trasactions then that is a huge barrior to entry for smaller traders and will only get higher as time progresses.
I think there might be two solutions. Use of lighting network and use of alt-coin for collateral. I am not sure how BSQ works as reducing cost as trading fee, but maybe there is some room to improve upon like using USDC on layer 2 network. Maybe BSQ can be more like an exchange token? From what I read it is SATs that have been marked by the BISQ. 2) I think you are on the right track trying to start trades in new countries.
3) BISQ on mobile phone. I think this goes hand in hand with expanding in new countries as many people don't have desktops but will have a smart phone. 4) Expand BISQ dex similar to sushiswap or your favortie dex. This could provide addtional revenue for the DAO.

I would like to contribute. Possible areas that I could contribute are: 1) Provide liquidity (already doing) 2) Join growth team. 3) Create new user guides in video or PDF form. 4) Add a node to the network? (I would need some help to set it up)

[MwithM]

@Ven32123 BSQ only helps users to pay less trading fees. As it makes the tx heavier, in with this mining fees, it makes economic sense to pay trading fees with BTC for low volume trades, as the discount on trading fees could be lower than increase in mining fee paid. Bisq 2 should address the mobile phone and the "alt" part. I don't see Bisq using an altcoin as base currency, but other Bitcoin layers like lightning or L-BTC. The main goal for Bisq is enabling fiat on/offramp to BTC in a decentralized way. Sushiswap and others don't usually provide fiat trading, although it's been though about atomic BTC/XMR swaps.

[flix1]

Growth team lead role: https://github.com/bisq-network/roles/issues/100

[flix1]

There seem to be multiple candidates for the Growth Team Lead. We'll keep that discussion on that issue... but I just want to make a more general point here for similar future discussions:

-As with everything in Bisq the interview process should be completely open and public. Proof of work should be the deciding factor. A possible process could be as follows:

1. Contributor interested in Team Lead position formally applies on the relevant github issue (https://github.com/bisq-network/roles/issues/100), detailing their plan for the team, the work they expect to do, the compensation they expect to ask for, the goals that they hope to achieve. Links to previous work. Details of BSQ bond if bonded role.

2. Other contributors and team leads give feedback, ask questions, demand more details from candidates.

3. If decision is clear (contributor consensus on preferred candidate) this should be obvious on github issue.

4. If doubt persists, ask for an explicit vote on github.

5. If there is a tie or issues with voting (Sybil attack?), put it to a DAO vote

[flix1]

India bans most exchanges:

https://economictimes.indiatimes.com/markets/cryptocurrency/india-bans-foreign-crypto-platforms-like-binance-kucoin-what-should-investors-do-now/articleshow/106830654.cms

Growth opportunity for Bisq! This is what Bisq was made for. Time to prove censorship resistance.

[flix1]

To give India a push, and since this bounty https://github.com/bisq-network/growth/issues/175 was never claimed... I have tried to give it some publicity here: https://www.reddit.com/r/Jobs4Bitcoins/comments/199nt5k/hiring_bisq_market_makers_in_india/

[flix1]

1. Argentina bounty was also never claimed: https://github.com/bisq-network/growth/issues/172
2. India https://github.com/bisq-network/growth/issues/175
3. Nigeria bounty was claimed https://github.com/bisq-network/growth/issues/156
4. China had some activity for market day https://github.com/bisq-network/growth/issues/274
5. Turkey we never did anything there...

I won't create any new bounties, I'll let whoever becomes growth team lead decide on this... but it might be worth a try when Bisq2 launches.

[flix1]

Cycle 57 ~25 contributors on Bisq https://github.com/bisq-network/compensation/issues?page=1&q=is%3Aissue+is%3Aopen

Support: 8 Dev: 7 Ops: 7 Growth: 3

[flix1]

Given recent developments (https://www.justice.gov/usao-sdny/pr/founders-and-ceo-cryptocurrency-mixing-service-arrested-and-charged-money-laundering) It might be appropiate to start building the defense team.

https://bisq.wiki/Teams