From 945d92aa1b298b3b702140aa199f77a4d8fb48d1 Mon Sep 17 00:00:00 2001 From: Florian Dold Date: Sun, 9 Aug 2020 00:15:04 +0530 Subject: design doc for payment flow --- design-documents/fees.rst | 120 ++++++++++++++++++++++++++++++++++++++++++++++ 1 file changed, 120 insertions(+) create mode 100644 design-documents/fees.rst (limited to 'design-documents/fees.rst') diff --git a/design-documents/fees.rst b/design-documents/fees.rst new file mode 100644 index 00000000..96459423 --- /dev/null +++ b/design-documents/fees.rst @@ -0,0 +1,120 @@ +Design Doc 003: Fee Structure Metrics +##################################### + +.. note:: + + This design document is currently a draft, it + does not reflect any implementation decisions yet. + +Summary +======= + +We discuss criterea for evaluating an exchange's denomination and fee structure. + +Motivation +========== + +Currently, users of a Taler wallet can't easily judge the fee structure of an +exchange and what it will mean for them. Thus we want to define some metrics +that allow a user to make more informed decisions. + +Similarly, the fee structure metrics might be used by exchange operators +as a senity check. + +An auditor might also enforce ranges on these metrics as a condition for +auditing a denomination structure. + +Requirements +============ + +* Privacy: A denomination structure that has too many denominations + will result in reduced anonymity. +* Efficiency: A denomination structure that has too few denominations + is inefficient. +* Predictability: + + * The amount of fees for an operation should not come + as a total surprise for the user. + + * The user should know beforehand when they have to be online + to refresh their balance, and they should know how much + this will cost them. + +The metrics for the exchange should be advisory, i.e. an informed user should +be able to accept the withdrawal anyway. + +The exchange's business interests may be in conflict with (1) a transparency of +cost for the user and and (2) restrictions on denomination/fee structures. +Thus the metrics should still allow some degree of variability between +exchanges. + +We make the assumption that wallet always perfer operations with better +privacy. For example, a single coin should only be used for at most one +spend operation and at most one refresh operation. + +Proposed Solution +================= + +The following yes/no criteria are applied to determine if a denomination/fee structure +is *reasonable*: + +* For a denomination of value ``v``, either + + (a) ``v`` must be the the smallest offered denomination, or + (b) there must be another denomination with a value of at least ``v / 10``. + +Is there a relationship between the smallest denomination and the size of fees? + +Idea: When when only doing spends on a coin that are a multiple of the smallest spending amount, +we constrain the number of coins that are refreshed into. + +When evaluating the e2e cost of a denomiation, look at: + * the cost of withdrawing the coin by itself and spending it fully, directly + * the cost of withdrawing the coin, directly refreshing it into the next smallest + fully fitting currency (or use greedy fit!) and add up the withdraw, refresh and re-withdraw fees. + * percentage is always computed with sum against the full coin's value + * smallest coins are an exception + +Actually, smallest spendable amount should be a multiple of the smallest coins, since +we still need to deal with fees even at that level + + +Refund fees should not be higher than if the user got a refund through +a different channel than Taler and then purchased the product again. + + + +The following metrics are also defined: + +* Shortest time from withdrawal expiration to deposit expiration. +* Upkeep, i.e. how much does it cost the customer to keep coins in their wallet + per time period, on average over a long period. +* Assurance period, i.e. the time span for which the exchange has already announced + its fees. +* Spending amount range. +* End-to-end fee range. This is the minimum/maximum cost to withdraw electronic cash + (within the spending range), spend some of it and then obtain change for the transaction. +* Merchant contribution range. This is the percentage of the end-to-end fees that the merchant + can cover if they choose to do so. + + +Alternatives +============ + +* Users can manually study the fee structure. +* The auditor could impose a fee structure and not + allow any variability between exchanges + +Drawbacks +========= + +* The approach does not work well in some special-purpose deployments, + where the coin structure is taylored to the products of merchants, + and refreshing would never even happen. + +* The approach also does not consider more "creative" fee structures, + such as ones where coins that are valid for a longer time have higher + fees. + +Discussion / Q&A +================ -- cgit v1.2.3