Jam - Join Market, Advice on Optimizing Fidelity Bond Setup \ stacker news ~bitcoin

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Jam - Join Market, Advice on Optimizing Fidelity Bond Setup

4816 sats \ 12 comments \ @fbv000 20 Apr 2023 bitcoin

I've been researching and testing fidelity bonds and trying to figure out the best way to set one up. I understand that the bond value is determined by the amount of locked bitcoins and the lockup period.

The formula on the documentation for a fidelity bond's value is as follows:

bond_value = (locked_coins * (exp(interest_rate * locktime) - 1))^x

I am aware that the bond value increases with the amount of locked bitcoins and the duration of the lockup period, but I'd love to get some advice from the community on finding the right balance.

I was thinking to start with a shorter lockup period (1-2 months) and experiment with different amounts of locked bitcoins to get a feel for the market.

Then, gradually increase the lockup period to between 3 to 6 months

Also any one has some advice on the absolute vs relative offer ?

thanks!

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485 sats \ 2 replies \ @BlokchainB 20 Apr 2023

Used jam market once and it cost me too much in fees.

659 sats \ 1 reply \ @fbv000 OP 20 Apr 2023

Don't use the default. You can adjust the collaborator fees under settings, there is quite a bit of liquidity with very low fees, even zero.

21 sats \ 0 replies \ @BlokchainB 20 Apr 2023

Thanks I’ll give it a shot

482 sats \ 0 replies \ @byzantine 20 Apr 2023

yes this is a great question to answer: more utxo locked or longer duration !?

189 sats \ 1 reply \ @nerd2ninja 20 Apr 2023

I don't have an answer for you, but I'd love to see a write up after you've experimented!

50 sats \ 0 replies \ @BlokchainB 20 Apr 2023

Thanks I’ll give it a shot

63 sats \ 4 replies \ @021e6b4fce 20 Apr 2023

fidelity bond is a stupid concept. proof of stake rebranding.

Who has more money to lock up: bad actor criminal chain analysis feds? or plebs who just want to mix for other plebs?

79 sats \ 0 replies \ @kristapsk 20 Apr 2023

You have better idea how to fight sybill attacks (which is generic problem of any P2P network)? Without FBs bad rich actors can spin up thousands of makers and have big probability to be all "counterparties" in every single coinjoin.

0 sats \ 1 reply \ @0260378aef 21 Apr 2023

An entirely valid point to raise, but the answer isn't trivial at all.

It's rather analogous to the design of Bitcoin: who has more resources to apply to mining, the aggressors or the 'defenders' (which can include people just wanting to earn value from the system, not only idealists)?

One set is a lot more open than the other, and that set has a positive financial incentive. Also coinjoin has an additional quirk: more than one "agressor" can actually interfere with each other, if each one individually is trying to deanon all the coinjoins.

Anyway I think you can list several reasons why a fidelity bond approach to making Sybil attacks hard is flawed; what's a lot harder, is to come up with any viable alternative without requiring identities.

0 sats \ 0 replies \ @l0k18 22 Apr 2023

Yep, this is how I came up with the idea of paying for sessions with AMP sends, and a string of ideas I'm not completely satisfied with relating to clients giving delayed feedback via selective sharing and once a user has found a few score good peers they can just stick with them and tippie toe in the new fields once in a while to try pick up a new one as inevitably some will go offline.

I think a protocol a bit like LN's scheme of PSBTs and such like things would make it possible to do them with lower counterparty risk than a kind of security bond system by leveraging game theory and cryptography.

Not something I'm gonna dwell on much right at the moment, I have plenty of puzzles to unravel before I can move on to something new, but that's my take on it anyhow.

0 sats \ 0 replies \ @byzantine 20 Apr 2023

proof of stake has nothing to do with a fidelity bond

0 sats \ 0 replies \ @xz 21 Apr 2023

Interesting. Was just thinking about this.

The best advice I can see (someone really needs to do a write up about it) is just track the orderbook and see what offers are already in there. It's pretty easy to see that smaller amounts and shorter durations are less valuable to a cj (sb please tell me if I'm wrong on that.) I just moved a few smaller utxos into cj wallet to see what to expect first. At least while I'm figuring out all of the above and the questions you asked.

From my experience, running joinmarket client server is great to get to understand the technical side of it, but we really need the UI to make it clean and frictionless for those of us just learning to use tools like languages like python.