DD 41: Wallet Balance and Amount Definitions

10.41. DD 41: Wallet Balance and Amount Definitions#

10.41.1. Summary#

This design document discusses terminology and concepts used in the wallet for balances and amounts.

10.41.2. Motivation#

There are many different types of balances and amounts, and they need to have a clear definition.

Furthermore, the user in some situations needs to know/decide whether an amount that the user chooses includes fees or not.

10.41.3. Proposed Solution#

10.41.3.1. Amounts#

  • effective: An effective amount always represents the direct effect on the wallet’s balance of the same currency.

  • raw: The raw amount always refers to the amount with fees applied. The exact interpretation of that depends on the transaction type.

  • instructed: An instructed amount always refers to the amount that a user has explicitly specified as an input. It is not directly a property of transactions, but might be added as metadata to transactions for informational purposes. How the instructed amount is interpreted differs based on the “instructed amount mode” that is specified together with the amount.

  • counterparty-effective: An amount that estimates the effect of the transaction of the balance (either wallet or bank account) of the other party. This is usually a conservative estimate, i.e. when sending money, this is the lower bound for the funds that the other party will obtain after fees.

10.41.3.2. Instructed Amount Modes#

  • raw-mode: The instructed amount represents the raw amount. This is the default.

  • effective-mode: The instructed amount represents the effective amount, i.e. the direct change to the balance.

  • counterparty-effective-mode: The instructed amount represents the effective amount seen from the counterparty. In other words, it is the direct difference to the counterparty’s balance.

10.41.3.3. Balances#

The following types of balances are defined:

  • available: Balance that the wallet believes will certainly be available for spending, modulo any failures of the exchange or double spending issues. This includes available coins not allocated to any spending/refresh/… operation. Pending withdrawals are not counted towards this balance, because they are not certain to succeed. Pending refreshes are counted towards this balance. This balance type is nice to show to the user, because it does not temporarily decrease after payment when we are waiting for refreshes

  • material: Balance that the wallet believes it could spend right now, without waiting for any operations to complete. This balance type is important when showing “insufficient balance” error messages.

  • age-acceptable: Subset of the material balance that can be spent with age restrictions applied.

  • counterparty-acceptable: Subset of the material balance that can be spent with a particular merchant or peer-to-peer transfer.

  • counterparty-depositable: Subset of the receiver-acceptable balance that the counterpary can accept via their supported wire methods.

  • exchange-depositable: Subset of the receiver-acceptable balance that the counterpary can accept via their supported wire methods.

While not quite a balance, we also define the following balance-related term:

  • max-merchant-effective-deposit-amount: Estimated maximum amount that the wallet could pay for, under the assumption that the merchant pays absolutely no fees.

10.41.3.4. Raw Amount Definitions#

Raw amount is…

Manual Withdrawal

… the money that is wired from the user’s bank account to the exchange’s bank account for the withdrawal.

Deposit

… the amount leaving the exchange account without the wire fees.

Peer Pull Credit

… the amount that is withdrawn from the purse (via merge reserve) that the counterparty fills.

Peer Push Debit

… what the counterparty expects in the purse.

Peer Push Credit

… the purse_value in the exchange to be withdrawn.

Merchant Payment

… the amount the merchant should get if is not doing aggregated transaction. Wire fees are ignored.

Peer Pull Debit

… the net value of the invoice without fees.

Refund

… the amount that the merchant refunded.

10.41.3.5. Details per Transaction Type#

Warning

This section is possibly incomplete / out of date.

10.41.3.5.1. Manual Withdrawal#

if instructed_amount mode = raw
  raw_amount = instructed_amount

  effective_amount = instructed_amount - coins.withdrawal_fee

if instructed_amount mode = effective
  raw_amount = instructed_amount + coins.withdrawal_fee

  effective_amount = instructed_amount

10.41.3.5.2. Deposit#

if instructed_amount mode = raw
  raw_amount = instructed_amount

  effective_amount = instructed_amount + coins.deposit_fee + coins.refresh_fee + wire.transfer_fee

if instructed_amount mode = effective
  raw_amount = instructed_amount - coins.deposit_fee - coins.refresh_fee - wire.transfer_fee

  effective_amount = instructed_amount

10.41.3.5.3. Peer Pull Credit#

if instructed_amount mode = raw
  raw_amount = instructed_amount

  effective_amount = instructed_amount - coins.withdrawal_fee - purse_fee

if instructed_amount mode = effective
  raw_amount = instructed_amount + coins.withdrawal_fee + purse_fee

  effective_amount = instructed_amount

if instructed_amount mode = counterparty
  raw_amount = instructed_amount - coins.counterparty_deposit_fee

  effective_amount = instructed_amount - coins.counterparty_deposit_fee - coins.withdrawal_fee - purse_fee

counterparty_raw_amount = raw_amount

counterparty_effective_amount = raw_amount + coins.counterparty_deposit_fee

.. note::

  counterparty_effective_amount is an estimation since refresh fee is not included.
  Refresh fee can't be calculated because depends on the coins available in the wallet
  of the counterparty

.. note::
  coins.counterparty_deposit_fee is the minimum deposit_fee that can be calculated for the
  given exchange. Counter-party may pay more if it have different preferences doing the coin
  selection.

10.41.3.5.4. Peer Push Debit#

coins = select-coin-for-operation(debit, mode, instructed_amount)

if instructed_amount mode = raw
  raw_amount = instructed_amount

  effective_amount = instructed_amount + coins.deposit_fee + purse_fee

if instructed_amount mode = effective
  raw_amount = instructed_amount - coins.deposit_fee - purse_fee

  effective_amount = instructed_amount

if instructed_amount mode = counterparty
  raw_amount = instructed_amount + coins.counterparty_withdraw_fee

  effective_amount = instructed_amount - coins.counterparty_withdraw_fee - coins.withdrawal_fee - purse_fee

counterparty_raw_amount = raw_amount

counterparty_effective_amount = raw_amount - coins.counterparty_withdraw_fee

.. note::
  ``coins.counterparty_withdraw_fee`` is the minimum withdraw_fee that can be calculated for the
  given exchange. Counter-party may pay more if it have different preferences doing the coin
  selection.

Note

how much wire_fee the merchant is willing to pay

merchant_wire_fee = min(wire.transfer_fee / contractTerms.amortization_factor, contractTerms.max_wire_fee)

merchant_deposit_fee = min(contractTerms.max_fee, contract_wire_fee)

10.41.3.5.5. Merchant Payment#

instructed_amount = contractTerms.amount

coins = select-coin-for-operation(debit, mode, raw_amount)

raw_amount = instructed_amount - merchant_deposit_fee

effective_amount = instructed_amount + coins.deposit_fee + coins.refresh_fee + (wire.transfer_fee - merchant_wire_fee)

.. note::
  The current coin-selection algorithm the order_price is neither raw_amount nor effective_amount.
  We can calculate the raw_amount of the payment as (contractTerms.amount - max_merchant_fee) and then this
  operation becomes equivalent than a deposit (in terms of fee calculation).

10.41.3.5.6. Peer Push Credit#

instructed_amount = p2pContract.amount

coins = select-coin-for-operation(credit, mode, raw_amount)

raw_amount = instructed_amount

effective_amount = instructed_amount - coins.withdrawal_fee

Note

In the case that the withdrawal_fee of the coin selection for the push-credit amount is higher than the wire_fee of the exchange, can the wallet ask the exchange to make a wire transfer of the purse instead of proceeding?

10.41.3.5.7. Peer Pull Debit#

instructed_amount = p2pContract.amount

coins = select-coin-for-operation(debit, mode, raw_amount)

raw_amount = instructed_amount

effective_amount = instructed_amount + coins.deposit_fee + coins.refresh_fee + wire.transfer_fee

10.41.3.5.8. Refund#

instructed_amount = refund.amount

raw_amount = instructed_amount

effective_amount = instructed_amount - refund_fee - refresh_fee

Note

There may be the case that the merchant should refund all the value of the purchase and that may include paying for the refund_fee.

Is there a way that the merchant can initiate a refund of purchase + refund_fee so the wallet will get the same effective_amount?

10.41.3.6. Illustrative Example#

Warning

This section is possibly incomplete / out of date.

To explain the differences between raw, effective and instructed amounts, consider the following scenario: Alice wants to send money to Bob via a P2P push payment.

Example 1:

  • Alice starts a withdrawal of KUDOS:10 from her bank’s web interface into her Taler wallet. The instructed amount is KUDOS:10 and (by default for bank-integrated withdrawals), the mode is raw-mode. After fees, KUDOS:9.8 arrive in her Taler wallet.

Example 3:

  • Alice wants to pay for a KUDOS:10 monthly magazine subscription. Her Taler wallet is empty though.

  • She starts withdrawal through her Android wallet app, where she selects KUDOS:10 as the instructed amount with mode=effective-mode. This translates to amountEffective=KUDOS:10 and amountRaw=KUDOS:10.10.

  • Alice is redirected to her banking app where she transfers KUDOS:10.10 to the exchange.

  • Her Taler wallet balance will be KUDOS:10.10 after the withdrawal completes.

Note that on the amount she chooses and the fees / denom structure of the exchange, the amountEffective might be higher than the instructed amount.

FIXME(dold): That flow does not work if withdrawal starts in the bank. Maybe there needs to be a mechanism where the wallet tells the bank the adjusted amount that needs to be transferred? That would be a new feature in the bank integration API.

Example 4:

  • Alice has KUDOS:10 in her wallet.

  • Alice wants to initiate a peer-push payment with amountInstructed=KUDOS:8 and mode=effective-mode. That means that after the payment, she expects exactly KUDOS:2 to remain in her wallet.

  • Due to the fee configuration, her wallet computes amountRaw=KUDOS:7.5 and amountEffective=KUDOS:7.8. The effective amount in this case does not equal the instructed amount, despite the mode=effective-mode. That’s because there no amount that can be spend so that the spend amount with resulting refresh fees equal KUDOS:8.

  • Alice confirms the peer-push payment initiation, and exactly KUDOS:7.5 are credited to the purse that her wallet creates.

  • Bob merges the purse into his reserve. Bob’s wallet automatically withdraws from the reserve, and his wallet balance increases by KUDOS:7.1, since withdrawal fees are deducted.

10.41.4. Discussion / Q&A#

(This should be filled in with results from discussions on mailing lists / personal communication.)