The defense mechanism chosen is to make arbitrators pay a high registration fee, so that it would supposedly cost them more to trick the system than they would win (because of the 1btc trade limit). To be noted is that current arbitrators are handpicked by founders, but they want it to be fully decentralized ultimately.
What is not addressed is this : if arbitrator management is fully decentralized, how will people be triggering their safety payment if they do something bad? Will there be some kind of a vote or something? How much time would it takes? (because if it's long enough, malicious arbitrator can steal money from several trades and outperform their safety deposit). It seems like the hardest part to decentralize, and I don't think it's addressed well enough yet.
In short: The arbitrator will have to lockup a high amount of BSQ (DAO tokens)and in case he would default that deposit can get confiscated by voting.
He also is limited to do not more than 20 cases.
Actually, it doesn't even need a criminal association : what if arbitrator is malicious? FAQ answers both our questions : https://bisq.io/faq/#8 and https://bisq.io/faq/#10
The defense mechanism chosen is to make arbitrators pay a high registration fee, so that it would supposedly cost them more to trick the system than they would win (because of the 1btc trade limit). To be noted is that current arbitrators are handpicked by founders, but they want it to be fully decentralized ultimately.
What is not addressed is this : if arbitrator management is fully decentralized, how will people be triggering their safety payment if they do something bad? Will there be some kind of a vote or something? How much time would it takes? (because if it's long enough, malicious arbitrator can steal money from several trades and outperform their safety deposit). It seems like the hardest part to decentralize, and I don't think it's addressed well enough yet.