Kleros ~ Fast Inexpensive and Transparent way to resolve trade dispute on the blockchain (FITway)
The blockchain technology has offered us all the possibility to be responsible as to how we store, manage and access our funds. This freedom afforded by this revolutionary technology could quickly be eroded when we try to use this funds to access value on the same medium which has offered us this security in the first place.
Accessing goods and services on the blockchain through eCommerce wont save us from the nuances associated with online transactions because Smart Contracts which are at the core of blockchain technology are very effective in deploying contracts but not intelligent enough to know if any party of the contract agreement has defaulted. This obviously creates a problem for the exchange of value on the blockchain.
So in a situatuon whereby a service is not delivered on time as agreed or a package sent incomplete might means one of the party is left unhappy and somehow cheated. Because the blockchain value market will natively share some obvious features which are inherent in any online transactions. Some of which are anonymity of one or both of the parties which creates a limitation to confront a defaulting party and demand for replacement or a rework or even take legal action as the case maybe. These and many more are some of the reasons why people dont trust the internet.
Does this means we should stop doing our business online?? No, Because it provides the needed visibility for our business. The best point of call would be to leverage all the facilities that makes doing business in the real world pleasant and comfortable. And key to this is the availability of legal institutions to resolve such dispute that may arise in case any parties in trade execution defaulted.
What better way to consign both parties to reach an agreement before any contract is initiated. This agreements binds both party to act accordingly and comply with the terms and condition of the binding document.
Imagine if all this is possible online, wont you still love to continuing using online services because the blockchain offers much more as it helps your business to reach a wider audience due to its increasing global adoption amidst other oppurtunities.
Now Kleros is bringing all this facilities to users on the blockchain by leveraging the blockchain technology, crowdsourced technology and game theory to protect individuals and business alike against counter-party risk in a wide range of industries including eCommerce, Insurance, Finance and many more.
This means that organisations have the oppurtunity to integrate Kleros as their arbitrator before initiating their smart contract on the blockchain inorder to provide a comfortable environment of doing business for their customers or clients within their blockchain ecosystem should a dispute or similar claims arise from either parties.
In the Kleros ecosystem, both parties know the parts they are to play before a contract is initiated for any transaction which means that in the case of a dispute either a service not met within the time frame as already stipulated in the contract. The party who demands justice will only need to activate the Kleros clause and provide evidences to backup his claims. The defaulting party will be required to do the same as well. Both leaving the case to be decided by a credible third party.
The Kleros Justice System
Watch the video review of Kleros Justice Protocol
Now that both parties have provided the requisite evidences, the Krelos system doesnt just take this inputs and dabble over it just to give a swift output. The Krelos judicial system is modelled to suite the native court system albeit in a fast, inexpensive manner to blockchain users.
After the evidences has being submitted, the Kleros ecosystem will select experienced jurors who will be required to look at the evidences provided by both party before making a decision based on the options provided by both parties while creating the kleros contract
Kleros crowdsourced jurors randomly after each jurors have made a pinakion(PNK) token commit to show their interest before which the evidences can be revealed to the chosen jurors.
Jurors are required to weigh in honestly on the evidences provided before casting their votes. At the end of the voting exercise, the result are collated and the votes with the highest occurence is taken as the coherent and final decision of the court. So while those that voted incoherently loses their funds, the coherent jurors are incentivized by voting honestly. Jurors are also paid arbitration fee which is deducted from the losing party.
- 'Reimburse' the client
- 'Give' the website developer an extra week
- 'Pay' the developer
Thomas Schelling
As we know, information on the ethereum blockchain is public. So this commit and reveal mechanism will ensure that the decision of a juror does not influence that of his colleagues because voting will only be visible once the voting period ends.
Once the vote has being casted by the jurors, the candidate with the highest votes in his favour will be regarded as the winner and the funds locked up in the smart contract will automatically be released to the winner. Although in the real sense, not all dispute issues will follow the same pattern, some can require the funds to be shared in a certain ratio, There could a decision option that accomodate the defaulting party to replace the product or offer him more time to complete the project. All these and many more is being considered and will be integrated into the Kleros ecosystem.
Nobody wants to get in a dog fight even if they have the biggest teeth.....lol. But honestly it might seem that the system could be manipulated by a single individual since he/she can afford to buy a large portion, say 51% of the Pinakion (PNK) token since this will influence the choice of the jurors and ultimately influence the decision of the court.
Kleros realise that if such happen, then the integrity of the court decision cannot be guaranteed. So they adopted the Interactive Coin Offering method (IICO) to distribute the PNK token.
The IICO works in a way such that each investors will set a cap which is affordable to him. Depending on this information, the token distribution is then structured such that each investors can enter at different phase of the token distribution. This ensures that every investors both small and big gets a fair share of the token.
All in all, their IICO was done in a fair and transparent manner.
Product Survey
Integrating Kleros can help many industries to adopt different use cases as demanded because the crowdsourced technology can allow industries get reliable and honest data from anonymous individual because an incentive-derivative economy. For instance, a product survey, such approach will attract the right response from varied individuals who have committed their funds to take part in such exercise.
Oracle
Oracle means collecting real time information from humans. A simple use case of the oracle framework of Krelos could be to ascertain a weather prediction of a region. This will serve as a medium for realtime information exchange.
This could be useful for predicting accurate weather forecast
Escrows
By locking funds and trusting the Krelos contract, you have access to an inexpensive escrow service which ensures that your funds doesnt get released until its intended need has being met.
With this system in place, business can rest easy even after commiting large fund to a project on the blockchain because they are operating within a secure and responsive framework which takes care of their needs and that of their client.
This could find a good use case in a gambling industry
Privacy
Conducting business within the Krelos ecosystem guarantees you maintain your anonymity as well as privacy because users information are well concealed even from the chosen jurors and in the case of an appeal, the results of a subcourt is concealed from another in order to ensure that court decisions are not easily influenced through human bias or preference.
This is relevant to ensure consumer privacy is ensured.
Dispute Resolution
Which represents the primary use case of the Kleros ecosystem. Check out a wider range of industries where Kleros dispute resolution protocol could be relevant below
Integrating Kleros into any business will represent a good business culture for such organisation which will definitely boost its positive outlook from investors and consumers because securing a Kleros contract to refund their investors incase they could not meet their stipulated goals within a certain period will represent a means of security for the investors and also ensure the organisation work hard to achieve what they promised their investors. The oracle infrastructure can also help such organisations to get valuable feedbacks from their investors which could act as a consensus to drive the investors goal, a simple suvey can suffice to collect real time information from all investors.
Most institutions prefer to conduct their businesses online because of the relatively low cost of running it. But there is a problem, the consumer pay the price when a product is wrongly delivered or a service not met on time because there is no infrastructure that models a court system for online business transaction.
A platform like Kleros seeks to level the playing ground for every body concerned. Through their fast, inexpensive and transparent decision protocol, users can be sure to leverage their facility to get value for their resources/funds on the blockchain.
In this way, Kleros represent Justice for the Unjusticed
The chart below summarises the information provided about how the krelos protocol works
Their long term vision is to be able to solve dispute in a fast, efficient and transparent manner which sees them always engaging in research to continually adapt their dispute resolution protocol to be able to resolve every kind of dispute which could arise in an hypothetical business environment.
They are among only 5 of those admitted into the Thomson reuters research center offering them access to numerous research tools.
- Cryptocurrency ICO
A Kleros contract in favour of investors can guarantee a succesful ICO exercise
Weather Forecast
A real time oracle tested report can help scientist to better forecast future climate change of a regionGambling
Locking funds into Kleros escrow channel can help bookmarkers to avoid the hassle of managing multiple account. With real time input, smart contract can easily execute contract in favour of the winning party.Product Survey
The oracle framework allows businesses to derive honest reviews of their products and services by promising to incentivize participants whose respond are coherent with market statistics. what this does is that it increase consumer knowledge about the product and obviously gives it aesthetic value in the minds of their customer.
Other use cases
- July, 2018: Launch on Main Net and Early Pilots
- October, 2018: First Version with Real Enforcement
- April, 2019: Multiple subcourts and governance mechanism release
- July, 2019: Abstraction Release
- September, 2019: Complex Disputes Release
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