asgayapedia

Unknown: Variable Buffer Rate (Per-Hour Pricing)

Status: Not Started
Priority: Medium (Phase 0 enhancement)
Last Updated: 2026-06-05
Contributors Welcome: Yes
Related: Bulletin Board, Volatility Buffer

What We Don’t Know

Should the volatility buffer rate be fixed (7% for 24 hours) or variable (seller sets hourly rate, sender chooses timeout)?

The proposal: Sellers post buffer rate per hour (e.g., 1%/hour). Senders choose timeout when creating covenant (e.g., 4 hours = 4% buffer).

Why It Matters

1. Market Competition

Fixed buffer (current):

Variable buffer (proposed):

2. Sender-Recipient Coordination

Current:

Proposed:

Sender to recipient:
"Can you claim in 4 hours?"

Recipient: "Yes"

Sender: Creates 4-hour covenant → 4% buffer instead of 24%

Savings: €20 buffer → €4 buffer (80% reduction for coordinated transfer)

3. Capital Efficiency

Seller perspective:

Current:

Proposed:

Seller APR with 1%/hour rate:

The Mechanism

Listing Format

Seller posts in bulletin board:

{
  "category": "ASGAYA_SELLER_V1",
  "payment_methods": ["Bizum", "SEPA Instant"],
  "corridors": ["EUR-VES"],
  "limits": { "min": 50, "max": 500 },
  "fee_rate": 0.005,
  "buffer_rate_per_hour": 0.01,  ← NEW (1% per hour)
  "max_timeout_hours": 24,        ← NEW (ceiling)
  "contact": "seller#123"
}

Covenant Creation

Sender chooses timeout:

// UI: Sender selects timeout from slider/buttons
const timeout_hours = 4; // Sender's choice

// Fetch seller's hourly rate from listing
const hourly_rate = 0.01; // 1% per hour

// Calculate required buffer
const buffer_multiplier = 1 + (hourly_rate * timeout_hours);
// 1 + (0.01 × 4) = 1.04

// Covenant requires this much BCH from seller
const required_bch = amount_eur / eur_bch_rate * buffer_multiplier;

// Covenant timeout
const timeout_timestamp = now() + (timeout_hours * 3600);

Covenant Logic

When recipient claims:
├─ Check: claim_time < timeout_timestamp ✓
├─ Release: required_bch to recipient
└─ Seller keeps: fee (0.5%) + unused buffer

When timeout expires (no claim):
├─ Sender reclaims: original BCH
└─ Seller reclaims: buffer

Same covenant architecture, just variable timeout and buffer calculation.

User Experience

Sender Flow

┌─────────────────────────────────────┐
│ Step 3: Choose claim window         │
├─────────────────────────────────────┤
│                                     │
│ How soon can recipient claim?       │
│                                     │
│ Selected seller's rate: 1% per hour │
│                                     │
│ ⚡ 1 hour   → 1% buffer  (€1.00)   │
│ ⏱️  2 hours  → 2% buffer  (€2.00)   │
│ ⏱️  4 hours  → 4% buffer  (€4.00)   │ ← Default
│ 🕐 8 hours  → 8% buffer  (€8.00)   │
│ 🕐 12 hours → 12% buffer (€12.00)   │
│ 📅 24 hours → 24% buffer (€24.00)   │
│                                     │
│ 💡 Coordinate with recipient to     │
│    save on buffer costs!            │
│                                     │
│ [ Continue ]                        │
└─────────────────────────────────────┘

Default: 4 hours (reasonable coordination window)

Power user: Sender messages recipient first → “Can you claim in 2 hours?” → Selects 2 hours

Recipient Flow

No change! Recipient sees:

Incoming: €100
Claim before: [4 hours from now]
Options: BCH (free) | Cash at merchant (0.5% fee)

Recipient doesn’t need to know about buffer rates - just the deadline.

Economics

Seller Competition

Scenario: Three sellers in EUR-VES corridor

Seller Hourly Rate 4h Buffer 24h Buffer Strategy
Alice 0.5%/hour 2% 12% Aggressive (undercut)
Bob 1%/hour 4% 24% Standard (market rate)
Carol 2%/hour 8% 48% Conservative (high volatility protection)

Market dynamics:

Expected outcome: Market settles around 1%/hour (similar to current 7%/24h ≈ 0.29%/hour, but accounts for actual volatility risk)

Sender Optimization

Example: Sending €100 to Venezuela

Without coordination:

With coordination:

Savings: €20 (83% reduction)

Capital Recycling APR

Seller with 1%/hour rate:

Avg Claim Time Buffer % Cycles/Year APR
2 hours 2% 4,380 8,760%
4 hours 4% 2,190 8,760%
8 hours 8% 1,095 8,760%
24 hours 24% 365 8,760%

Wait, the APR is the same! Because hourly rate accounts for time.

Actual benefit: Senders pay less for coordinated transfers, sellers get more volume (more 4h covenants than 24h covenants).

Implementation Complexity

Easy (No blocker)

Listing format:

Covenant logic:

Backend:

Moderate (UI work)

Sender UX:

Listing display:

Unknown (Needs testing)

Market discovery:

Edge cases:

Testing Plan

Phase 0a: Fixed Buffer (Baseline)

Configuration:

Data to collect:

Expected result: Most claims happen in <4 hours (wasting 20% of buffer)

Phase 0b: Variable Buffer (A/B Test)

Configuration:

Success criteria:

If successful: Roll out to 100% in Phase 1

Success Criteria

Variable buffer succeeds if:

  1. Sellers adopt it: ≥75% of sellers post hourly rates (vs fixed)
  2. Senders coordinate: Average timeout chosen is <12 hours (proves sender-recipient communication)
  3. Cost savings: Average buffer paid drops from 7% to <5% (proves efficiency gain)
  4. No failures: Covenant expiration rate <5% (proves senders aren’t setting timeout too low)

Variable buffer fails if:

Risks

Risk 1: UX Complexity

Concern: “Sender has to choose timeout AND understand buffer calculation”

Mitigation:

Risk 2: Market Confusion

Concern: “Sellers don’t know what hourly rate to set”

Mitigation:

Risk 3: Coordination Failure

Concern: “Senders don’t actually coordinate with recipients”

Mitigation:

Risk 4: Covenant Expirations

Concern: “Sender chooses 1h, recipient takes 4h, covenant expires”

Mitigation:

Contributor Guidance

Skills needed:

How to contribute:

  1. UX mockups: Design timeout selection interface
  2. Economic modeling: Simulate seller competition at different hourly rates
  3. Prototype: Implement variable buffer in covenant testnet
  4. User testing: Ask users to choose timeout and explain their reasoning

Phased Rollout: Crawl → Walk → Run

Phase 0: Fixed Everything (Venezuela Launch)

Configuration:

Rationale:

Success criteria:

Phase 1: Time-Based Fees (IF NEEDED - Data-Driven)

Consideration: Before adding any variable pricing, evaluate Phase 0 data.

Add time-based fees only if:

Alternative: Keep it simple

If adding time-based fees:

Configuration:

Rationale:

Value:

UX:

How soon can Elena claim?

⚡ 2h  → €0.20 fee | Coordinate first!
⏱️  4h  → €0.30 fee | Recommended ✓
🕐 8h  → €0.40 fee
📅 24h → €0.60 fee | Safe if unsure

Success criteria:

Phase 2: Two-Dimensional Pricing (MAYBE - Even More Uncertain)

Only consider if Phase 1 time-based fees succeed and users want more.

Configuration:

Rationale:

Warning: This adds significant complexity (back to the double-sided education problem). Only implement if:

Success criteria:

Why Not Phase 0?

Risk 1: Seller Confusion (Buffer Concept)

If we launch Venezuela with variable buffer:

Risk 2: Sender Confusion (Critical UX Failure)

The disaster scenario:

Sender sees three sellers:
├─ Economy: 0.5%/hour buffer → €12.50 total for 24h
├─ Standard: 1%/hour buffer → €24.50 total for 24h
└─ Premium: 2%/hour buffer → €48.70 total for 24h

Sender thinks: "Economy is cheapest! I'll save €36!"
(Doesn't understand buffer = volatility protection)

BCH drops 15% during 24-hour window
Economy seller's 12% buffer insufficient
Covenant ABORTS

Sender: "Asgaya is broken! My money is stuck!"

The double-sided complexity problem:

Sellers need to understand:

Senders ALSO need to understand:

In Phase 0, with Venezuelan grandmothers sending remittances, this is way too much cognitive load.

The Phase 0 User Reality

Target sender: María, 55, Madrid → Caracas

What María can handle:

✅ Send €100 to Elena#142
✅ Pay via Bizum (she knows Bizum)
✅ Elena receives in ~4 hours
✅ Total cost: €0.50

What María CANNOT handle:

❌ Choose buffer rate: 0.5%, 1%, or 2%?
❌ "Economy sellers cheaper but riskier"
❌ "If BCH drops >12%, covenant aborts"
❌ "You'll get refund if buffer insufficient"

Result: Too many decisions → Abandons app → Asgaya fails

The Right Sequence

Phase 0: Build trust through simplicity

Phase 1: Add sophistication once trust established

Phase 2: Full market competition

Crawl before you run.

Recommendation

For Phase 0 (Venezuela - ONLY COMMITMENT):

After Phase 0 (6 months - DATA-DRIVEN DECISION):

  1. ✅ Measure actual claim times (median, 90th percentile)
  2. ✅ Analyze coordination patterns (do users message first?)
  3. ✅ Collect user feedback (complaints about fees? requests for options?)
  4. ✅ Evaluate covenant abort rate (is 7% buffer sufficient?)

Then decide:

Phase 2 (two-dimensional pricing): Only consider if Phase 1 succeeds and users explicitly request more control. Unlikely to be needed.

Key principle: Don’t optimize until data shows the optimization is valuable. Premature complexity kills products.

Status: Hypothesis formed. Implementation straightforward. Awaiting UX design and A/B test.

Expected outcome:

Phase 2 Extension: Two-Dimensional Pricing

The enhancement (for Phase 2):

Link buffer rate to fee rate, so sellers are compensated for capital lockup.

Listing format:

{
  "buffer_rate_per_hour": 0.02,      // 2% per hour (high reliability)
  "fee_base": 0.003,                 // 0.3% base fee
  "fee_per_hour": 0.001,             // 0.1% per hour
  "max_timeout_hours": 24
}

Calculation:

// Buffer (same as Phase 1)
buffer_pct = buffer_rate_per_hour × timeout_hours

// Fee (NEW - two components)
fee_pct = fee_base + (fee_per_hour × timeout_hours)

Market segmentation:

Seller Type Buffer/hr Base Fee Hourly Fee 4h Total Fee 24h Total Fee
Economy 0.5%/hr 0.5% 0% 0.5% 0.5%
Standard 1%/hr 0.3% 0.05%/hr 0.5% 1.5%
Premium 2%/hr 0.3% 0.1%/hr 0.7% 2.7%

Why this works:

  1. Compensates capital lockup: Premium seller locks 48% for 24h (vs Economy’s 12%), earns 5.4x more fee (fair)
  2. Coordination incentive: Premium seller 2h claim = 0.5% fee, 24h claim = 2.7% fee (5.4x difference!)
  3. Market efficiency: Sellers compete on reliability (buffer) AND cost (fee)

When to introduce: Phase 2 (12+ months), after sellers fully understand buffer efficiency and capital recycling.

Documentation: This two-dimensional pricing should be marked as Phase 2+ feature in bulletin-board.md.

This unknown asks: Can we give senders and sellers more agency while reducing costs and improving capital efficiency? The answer is likely yes—per-hour pricing aligns incentives perfectly.

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