A Decentralized Bitcoin Exchange That's Almost Decentralized

Operating since 2017, when it was originally called Bitsquare, the Bisq DEX runs directly on the user's computer, rather than a hosted site, as many of the self-described DEXs currently do.

While DEXs like Airswap and Everbloom are operated by startups, Bisq is a strictly open source project developed by a grassroots collective.

So the Bisq team is launching a decentralized autonomous organization, essentially software designed to manage compensation for contributors to the project's code without oversight from any single party.

The Bisq DAO will distribute bitcoin that's been donated to the project, in this watermarked form, to those contributors that the community has voted to approve.

Security is precisely the reason Bisq is launching BSQ on top of bitcoin, rather than ethereum, where The DAO debacle led to a contentious hard fork.

The Bisq project has received 2.5 bitcoin in donations, which can potentially be marked and divided into roughly 2.5 million BSQ tokens.

Much like a subway token or a movie ticket, BSQ will be consumed when someone spends them to use the DEX. Specifically, the tokens will be used to pay trading fees to Bisq and security deposits via the DEX's multi-signature smart contract, which holds bitcoin in escrow until the seller confirms receiving payment from the buyer.

Out of 236 sample Bisq orders for bitcoin, the only cryptocurrency payment option with more than 10 orders was the privacy coin monero, with just 23 compared to the 46 euro offers for bitcoin.

This is why bitcoin advocate Udi Wertheimer balks at the idea of calling Bisq a DEX at all.

So far more than 144 people contributed to the Bisq project, with roughly 10 developers handling most of the heavy lifting.