Allow active contributors to sell BSQ earned during Phase Zero about proposals

[sqrrm]

I'm feeling hesitant towards this suggestion.

The main pro would be to let contributors actually get a monetary reward for the work they're currently doing before the BSQ tokes become freely tradable. This is a good reason though. Price discovery would be good but I don't think it's as important at this stage.

I see a couple of cons. First, the control and trust needed in the centralized accounting of these trades go against the ethos of decentralized trustless networks that I think is close to the core of what we're building with Bisq. It's already centralized with the issuance and voting, adding even more features to this centralized system seems inherently wrong.

On the legal side I don't know enough, and it seems no one really knows, but I worry this would be considered an investment contract according to US regulation. The tokens are currently controlled centrally and certain aspects are not yet available, especially the utility for fee payments. This makes it look awfully close to a centrally controlled shares of a company, with voting rights but nothing more. I would be happy to get educated on this matter though.

[alexej996]

I agree with the conclusion of this proposal.
It seems like buyers will be taking most of the risk here and that the project can pretty much only benefit from this change.

I am unsure about legal regulation however, but I am generally not really familiar with it. It does seem to me like this can not really cause much of an issue really, at least not for the project as a whole, but perhaps maybe to those individuals that are selling BSQ.

[ManfredKarrer]

I agree with all you stated.
Maybe one extra point to consider is if the sell price should be public or kept private. I think public would be better as it helps price discovery. Of course the 1 BSQ = 1 USD price we use for contributors is nor required to be kept for sellers.

[cbeams]

one extra point to consider is if the sell price should be public or kept private.

Agreed. I meant to cover this above, thank you for bringing it up.

I think public would be better as it helps price discovery.

Agreed, and it's better for transparency in any case. We can start by simply adding a comment in the stake and voting spreadsheet in the balance cell of the row for each new buyer. When a contributor who has sold their BSQ adds a line for the new buyer, they also add a comment saying what the sale price was. We can add another column for this, too, but starting with a comment would be the simplest thing to do during the first month or two.

People will rightly wonder about what's keeping contributors from doing self trades (i.e. transferring BSQ to themselves) and artificially inflating the price of BSQ along the awy. And the answer is that there is essentially nothing to prevent it. I am proposing this change now because I believe the current group of active contributors (i.e. those who have earned BSQ during Phase Zero thus far) have demonstrated a clear commitment to the project, are demonstrably good actors committed to the success of the project, and can reasonably be trusted not to engage in this kind of manipulation. Any prospective buyer should of course not take my or anyone else's word for it; they should do their own research into the project, should look at the profile and activity history of each of Bisq's active contributors and determine for themselves whether it is reasonable to trust that these people would report their BSQ sales accurately, both with regard to volume and price. They should look at the history of any such sales and ask themselves if they believe those volumes and prices to be plausible, and so forth.

Of course the 1 BSQ = 1 USD price we use for contributors is nor required to be kept for sellers.

Agreed. Contributors are free to sell at any price their buyer is willing to pay. Otherwise, price discovery cannot occur. The 1 BSQ = 1 USD valuation should be understood as the working valuation at which all contributors have agreed to operate in the absence of a market for BSQ. If, through the process of selling BSQ, we discover that 1 BSQ = 1 USD is clearly wrong, we will update the official working valuation accordingly for use in future compensation requests.

[cbeams]

Thanks, @sqrrm. I can only respond briefly right now. Please give a thumbs-down on the issue description for now, so that people see there is something other than complete consensus so far. You can change it to a thumbs-up later if you change your mind.

[citkane]

@sqrrm , I agree with your well articulated points and can see that you have a lower level understanding of the matter than me. I will maintain my thumbs up for now because I will be making my first compensation request soon, have a mortgage to tend to and only a few months of buffer for the Bisq work I would like to do.

Of course, if the DAO phase 0 bootstrap crashes over this, all arguments are irrelevant. Maybe we need a "sitting on the fence" emoticon.....

[cbeams]

Ok, everyone, I'd like to try to wrap this proposal up. I wanted to take my best shot at making this proposal to see if it could possibly make sense or work for us to green-light BSQ trading during Phase Zero, but in the end, I myself agree with @sqrrm. I think that anything we do here to provide first-class support in our spreadsheets, etc for trading BSQ is just asking for trouble.

In the end, there is nothing we can do to stop individual contributors from making private deals now to trade BSQ when it does become live later, and there is no plan to put together any sort of "lockup" contract that prohibits contributors from doing so. So if people want to do these deals of their own accord and at their own risk, that's their call. Indeed, this is the exact same situation that contributors will be in after we exit Phase Zero and BSQ goes live on mainnet. Every Bisq DAO contributor must make decisions for themselves, as an individual. This involves more or less risk depending on the particulars of your jurisdiction, but the most important thing about the Bisq DAO is that it allows us to effectively share that risk without introducing super-high risk centralized infrastructure. Right now, while BSQ is worthless "play money" backed by nothing more than a spreadsheet, it is reasonable to operate with our current centralized infrastructure. Once it goes live, it absolutely must be decentralized. In the end, I don't want to mix things up here by starting to support trading BSQ as if it were real before it actually is. Because the very act of doing this makes it more real, and that means that it makes our current highly centralized infrastructure more of a real risk.

All of this is a shame, of course. In an ideal world, we would be able to take the kind of reasonable and prudent steps detailed in my original proposal to incrementally enable BSQ trading during Phase Zero, and to have everyone involved benefit from an early and controlled form of price discovery. But in an ideal world, it would also be impossible to impose the kind of financial censorship that makes a decentralized exchange network like Bisq necessary in the first place. So I guess this is all par for the course, right?

I'll leave this proposal open for a few days for further comment, but in the meantime, I've changed my own reaction from 👍 to 👎. Please do the same if you have had your mind changed by this conversation. Thanks @sqrrm for being the contrarian voice here!

[ManfredKarrer]

I agree, better we focus our efforts to get the DAO out asap rather than to add some unknown risks and potential hassles....

[ripcurlx]

As I'm not a lawyer and don't want to limit my travel plans in the future, I'm also fine with the decision that we focus our energy to release the DAO asap and not add this intermediary pre-release trading in the spreadsheet itself.

[cbeams]

Closing as rejected based on the content of the comments above and as reflected by the 2 👍 and 6 👎 reactions at time of closure. Thanks everyone for the thoughtful consideration of this matter. Onward to real live BSQ, then!