WHAT IS KLEROS?
Kleros connects users who need to resolve their disputes and juries with the necessary skills to solve them fairly. Our resolution protocol uses blockchain and jury technology in open and distributed collaboration to adjudicate each case quickly, safely and accessible.
HOW DO KLEROS WORK?
At its most basic level, Kleros connects users who need resolved disputes with a pool of common-law juries who have the skills necessary to resolve their disputes in a quick and affordable manner. The Kleros protocol is optional, which means that users can implement Kleros as their dispute resolution protocol directly in their smart contracts.
For example, an independent employee hires an independent professional, and the intelligent contract between them refers to Kleros as the protocol of awarding his contract. In the event of a dispute, the funds are blocked in the contract and the Kleros arbitration process begins. A court comes from a group of jury of collective source, relevant information is sent to the members of the jury and the members of the jury vote on the case. The vote is revealed, it is considered that the majority is the winner and the intelligent contract is executed, sending funds to the party to which the jurors voted in favor.
It is a very simple process that offers simplicity and convenience to users, however, there is much more working behind the scenes to make the platform safe and viable as a layer of dispute resolution. Specifically, the platform uses the blockchain to guarantee transparency and integrity in the jury selection process. In addition, the mechanics of game theory based on important concepts and its native Pinakion token (PNK) provide the incentive model necessary for juries to act honestly within the system.
Kleros's incentive model uses an optimized version of the Schelling Coin concept that derives from Schelling Point's concept of game theory. A point of Schelling is a focal point as a solution that people tend to use in the absence of communication because it seems natural or special. This is important in distributed systems where users do not trust each other. The concept of Schelling Coin was presented by Vitalik Buterin and is designed to be a symbol that aligns itself by telling the truth with economic incentives.
With respect to Kleros, his platform uses an optimized version of this concept to encourage juries to vote coherently with others through financial incentives with their PNK token. Jurors who vote against the winning majority are penalized, and those who vote in the winning majority receive redistributed cakes from jurors who did not vote. This redistribution is based on a patented formula and jurors must bet a certain amount of tokens as a deposit before the start of a case. Jurors also receive arbitration fees for their work.
Jury members select themselves in subcourts with specific focuses as part of a larger autonomous panel of juries that serves a wide variety of potential cases. When a case selection begins, a random process is used that uses a sequential work test to select jurors from the group. The probability that a jury will be selected for a case directly correlates with the amount of PNK tokens they deposit. The contracts for a case specify how and what the juries can vote, as well as how many jurors are needed.
The entire process is automated and Kleros functions as an autonomous Ethereum organization. The need for sustainable security and scalability is paramount for the platform because of this. The mechanics of game theory provide the necessary economic incentive, while the design of the platform consists of using a decentralized governance mechanism based on a liquid voting mechanism. This governance mechanism can be used for the following.
Establish policies on how to arbitrate disputes
Add, remove or modify sub courts
Modify parameters in sub courts
Change one of the smart contracts that Kleros trusts.
Appeals are also part of Kleros' functionality and play an important role in mitigating bribes while reflecting important legal processes of current state governments. A party may appeal Kleros' decision if they are not satisfied. Each new appeal has twice as many original juries plus one, so appeal fees increase exponentially and deter users from appealing endlessly or bribing jurors because the cost is too high as more appeals are made .
KLEROS RESOLUTION MECHANISM:
The Kleros resolution mechanism is composed of subcourts defined by categories.
The advent of blockchain has brought about a whole lot of revolution in our day to day activities. Nowadays, the idea of decentralization is been welcomed and embraced by a large number of people. This means that the number of small businesses coming up keeps increasing as the day goes by. I mean, we have decentralized peer to peer freelancing platforms, where users meet up to exchange time and services in a peer to peer manner.
While the increase in the number of small business is a welcomed development, users of these small business are however faced with a great hurdle when dispute arises. I mean, I can hire a user on a peer to peer freelancing platform to design a website for me, for a price of 250$. However, in the case where I am not satisfied with the website designed for me, I basically cannot do anything, since it would be more additional cost for me to take a 250$ worth case to the court of law.
However, what if there was a platform that could handle a case of this nature? Come with me, let us talk about KLEROS
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KLEROS:
KLEROS is a blockchain based project that resolves dispute. KLEROS is an opt-in service. KLEROS consists of a number of jurors that specializes in different categories. These jurors are always available to settle disputes.
To enable us understand KLEROS, let us example a use case.
TotoPaul requires a website for his business. He hears about “dummywebsitebuilder.io”, a peer to peer freelance platform, where he can get an expert to build the website for him. He visits the platform, and then he meets BlorkosPeter. TotoPaul and BlorkosPeter comes to an agreement on the price, which is 500$. Let us take a look at the project description:
Arbitrated Contracts:
Recall that I made mention that KLEROS is an opt-in service. Both parties involved (TotoPaul and BlorkosPeter) in the smart contract must design a KLEROS as their arbitrator, right from the onset on the creation of the smart contract. When the parties involved in the smart contract opt in to the KLEROS service, they must specify the number of jurors they want and the type of court that will settle any dispute that may arise. It should be noted that the parties involved in the smart contract would choose a court specialized in the topic of the smart contract they are involved in. For instance, an e-commerce contract will choose an e-commerce court, while a transport contract would choose a transport court. In this case, TotoPaul and BlorkosPeter would choose an e-commerce court. The diagram below shows a number of courts which users can pick from.
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Options for Jurors:
Also, both TotoPaul and Blorkos Peter would also specify the options for jurors to vote in the smart contract. These options may either be: “Reimburse TotoPaul”, “Pay BlorkosPeter”, or “Extra time for BlorkosPeter to make changes to the website”. The smart contract would also include the way the contact would behave after jurors have voted for any of those options. In our case study,
“Reimburse TotoPaul” means the smart contract would credit the funds to TotoPaul’s wallet
“Pay BlorkosPeter” means the smart contract would send funds to BlorkosPeter’s wallet
“Extra time for BlorkosPeter to make changes to the website” means that new disputes would be ignored for a specified amount of time, and after that time is elapsed, this option is removed from the options for jurors in further dispute.
Privacy:
In the case where disputes arises in the discharge of the smart contract, both TotoPaul and BlorkosPeter may be required to share private information with the jurors. To prevent outsiders from gaining access to this information, the language of the contracts and the voting options of the jurors are not made available on the blockchain. This is to ensure privacy.
Drawing/Selection of Jurors:
Users of KLEROS that serves as jurors have the benefit of earning cool cash in the form of arbitration fee. Before a user is chosen as a juror, he must deposit a token called pinakion (PNK). The higher the number of pinakion a user deposits, the higher the probability of him being a juror in the smart contract between TotoPaul and BlorkosPeter. Pinakion serves two functions, it ensures that no malicious party can cause the drawing of jurors to favour a particular party, and it also ensures that jurors are incentivized to make honest decisions, because jurors that make illogical decisions would pay part of the pinakion they deposited to jurors that make logical decisions.
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A dispute occurs between TotoPaul and BlorkosPeter, due to the fact that TotoPaul is not satisfied with the website which BlorkosPeter builds for him. So the jurors have to vote and make a decision.
Votes:
The jurors assess the evidence, and then each of them choose one of the three options. The voting system is designed in a way that, when a juror votes, he cannot change his vote, and no other juror see his vote, so no juror is influenced by another juror. When voting is over, the jurors have to reveal the options which they each voted for, and then a KLEROS smart contract verifies that the options match. The votes are then aggregated and then, the smart contract is executed. In the case between TotoPaul and BlorkosPeter, after the votes are aggregated, the option “Extra time for BlorkosPeter to make changes to the website” is picked, and then then the smart contract executes. After this, TotoPaul is satisfied with the website.
Arbitration fess:
To compensate the jurors that take their time in resolving the dispute between TotoPaul and BlorkosPeter are compensated with arbitration fees. Each juror will be paid a fee which is specified bty the subcourt where the dispute is solved. The arbitrable smart contract will also determine the party that pays the arbitration fee.
Appeals:
If any of TotoPaul and BlorkosPeter is not satisfied with the decision reached by the jurors, he can appeal and then the dispute would be revisited and judged again. Each new appeal will have twice the previous number of jurors plus one. This is to ensure fairness.
Incentive System:
We already know that jurors are compensated with arbitration fees after ruling over disputes. KLEROS employs an incentive system that ensures honesty and fairness. KLEROS does this by making sure that jurors whose vote are not in line with the group loses some tokens which are then redistributed to other group of jurors whose vote are coherent. Thus, honesty is ensured, because no one wants to lose his or her hard earned money.
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Advantages of KLEROS:
Secured
Bribe Resistance
Only jurors that specializes in the topic of the contract are picked
Privacy is guaranteed
Transperancy at a high level
Rewards for jurors
Honesty is guaranteed, since jurors are incentivized to make honest decisions
Ability to appeal (this comes to play when one or more party(ies) feels that the previous ruling is unfair)
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Applications of KLEROS:
Escrow
Insurance
Social media
Arbitration
Micro Tasking
Social networks, etc.
Conclusion
Kleros offers a dispute resolution protocol for the modern digital world that supersedes traditional jurisdictional areas as the world trends towards globalization. The potential of smart contracts to disrupt transactions and agreements between parties in an efficient and automated manner will inevitably lead to the need for a decentralized court system.
With the right incentive mechanisms enforced by proven game theory mechanics and the underlying blockchain providing the transparency and integrity needed, Kleros looks to become the justice protocol of the future.
For more information and resources:
Kleros Website
Kleros WhitePaper
Kleros Medium
Kleros Youtube
Kleros Telegram
Kleros Twitter
Kleros Github
Kleros Forum
This is my entry to the @originalworks contest
kleros2018
https://mobile.twitter.com/c3sar15 This is my link on Klerostwitter
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