Concerns

We welcome suggestions for problems and solutions.

Concerns with DeDeal include the following:

Issue 1: Occurrence of Fraud

<Risk of Unshipped Item Fraud by the Seller>

There is a possibility that a seller may choose not to ship an item once both the buyer and seller have pait intoo the seller deposit, in the hopes that the buyer will not press the sanction button.

<Risk of Extortion Fraud from the Buyer Exploiting the Sanction Button>

There is a possibility that the buyer will abuse the right to press the sanction button and choose to extort the seller even after properly receiving the item from the seller.

When a person is seen as vulnerable or exploitable, they are more likely to be a victim of fraud.

To reduce the risk of fraud, it is important to signal during the deal that you are a player with "inequity averse" tendencies (i.e. not afraid to retaliate by sanctioning back).

Solution 1. Adjustment of the Deposit Multiplier Required for Sanctions

Provide a setting to increase or decrease the multiplier of the deposit amount required to burn the other player's deposit. This can adjust the difference in risk between the buyer and seller.

Solution 2: Introduce a Tiered Sanctioning Rule.

Introduce a rule which allows a player to deposit an arbitrary amount at the time of sanctioning, and have the same amount burn from the other player's deposit. This rule wouldl increase the flexibility of the sanctioning process.

Solution 3: Introduce Credibility Scores

Introducing a credit score based on deal history can discourage fraud. The score can be used in subsequent deal to signal that you are “inequity averse” and not afraid to sanction in the case of fraud.

Solution 4: Split the Deal into Multiple Deals.

If the goods can be divided into multiple pieces, the incentive to commit fraud can be reduced by splitting the deal.

Issue 2. Decrease in Capital Efficiency due to Seller Deposit

DeDeal requires the seller to make a deposit, which is less efficient than an arbitrated escrow.

Solution : Reduce the Multiplier on the Price of the First Deposit by the Seller to Less than 1.

For example, when trading a 1 ETH item, the seller may choose to make the initial seller deposit smaller than 1 ETH.

In this case, the buyer still adds the first 1 ETH to the seller's deposit as payment for the item.

Since the seller’s risk is also reduced when reducing the seller deposit multiplier, the seller’s credibility should be taken into account.