KLEROS – THE ULTIMATE SOLUTION TO RESOLVING DISPUTES

afolwalex (65)in #crypto • 6 years ago (edited)

INTRODUCTION

Technology hasn’t stopped proving it’s the next best thing on earth. Ever since the internet was created, real life activities has been made easier, all you need is an internet connection and a device, everything you wanted to be done would be available in few minutes. The blockchain has adopted this and the idea of decentralization has been solving our necessary day to day activities while giving us an opportunity to earn as well.

The internet offered us the chance to transact online, you can offer someone a job and pay him/her after the job is done. This results to disputes sometimes, the job might not be perfect the way you want it, since you wouldn’t pay for something less than what you expected, it might result into going offline to resolve it. More money would be spent if the issue gets resolved in a court of law. How about a platform that resolves these disputes?

Let’s welcome Kleros, the blockchain dispute resolution layer.

ABOUT KLEROS

Kleros is simply an opt-in court system. It’s a project built on the blockchain to solve all kind of disputes. Whatever the dispute is focused on, Kleros has several type of court that deals with it. This court has people deciding who is right or wrong in the dispute, they are called jurors. Kleros is built on Ethereum.

For a better understanding of how the Kleros system works, let’s use some use cases.

USE CASE 1

Peter needs a logo for the clothing line he’s about to launch. After searching for a designer offline and couldn’t find one, he settled for a freelancer. Michael’s freelancing profile suggested he’s good for the job, so Peter chose him. An agreement was reached, then Michael went ahead with the job according to the description he was given. He finished it up the next day and submitted it to Peter. Peter didn’t find the design alluring, he told Michael that wasn’t what he wanted but Michael was sure that’s exactly what his client requested for. Both party couldn’t agree, so a dispute arose.

This is what would happen if they had used Kleros.

Peter and Michael decided to sign their contract with the Kleros court. The funds was sent to a smart contract controlled by Kleros. After the dispute arose and Peter informed Kleros, the team took it up and placed it on the blockchain. Jurors that have good knowledge on graphics designs applied to judge the case by staking pinakion (the Kleros token), everyone can’t be chosen so those that deposited the highest pinakoin where chosen to be the jury. They will be from different places, so they obviously wouldn’t have the contact of each other. The chosen jurors votes on what’s right. They decide if Michael should be paid, make another design or won’t be paid for the work.
The highest votes from the jury wins the case. Jurors that votes incoherently would lose tokens, hence they would always want to make the right decision.

USE CASE 2

Simon had always wanted an iPhone 7, he noticed Amazon were having a discount promo so he did all the necessary things and paid for one, they promised to deliver it in five hours. After eight hours, Simon contacted them and said he hasn’t gotten the package. Amazon checked their database and discovered the package has been delivered, they told Simon who denied and confirmed they lied. They had agreed to use the Kleros court, Simon had sent the money to the Kleros escrow. He actually lied and felt he would get away with both the phone and his money. He explained his claims to them and the team took it up.

With the lots of evidences the jurors saw, they concluded Simon had received the phone and the decision was made based on what is on the contract they signed. Perhaps, Simon had agreed he would lose both his money and the phone if he lies about receiving the package.

THE KLEROS COURT

The use cases should give you an idea of how the system works but here is a detailed explanation on everyone and everything involved in Kleros.

CONTRACT CREATORS

These are the people that are in a dispute. They are called contract creators because they will be in charge of how the contract should be. They decide the number of Jurors allowed to judge their case if a dispute arises, they also decide the court meant to rule their case. As mentioned earlier, Kleros has different court for different case. A court that specialized on package delivery would solve the “use case 2” issue up there.

THE JURORS

The Jurors decides who gets the contract, all they had to do is check the Kleros website for some arbitration work. Their findings would be based on the court they belong to. The jurors have to deposit some tokens to signal interest on the arbitration work they found. The Jurors with the highest tokens gets chosen for the work.

For the use case 1, the jurors would have options of reimbursing Peter, give some extra time to get the logo made the right way or Pay Michael. What each juror selects and sends is encrypted, other jurors wouldn’t see it. He can only reveal his vote by making his account open for theft attempt.

PINAKOIN

This is the Kleros token. The jurors stakes this whenever they see an arbitration work. This token serves two functions; it makes the jurors cast an honest vote, they will lose part of their deposited tokens if they vote incoherently. Also, it controls the rate at which Jurors would be drawn, the honest ones would always want to judge a case. Nobody would like to lose money while doing that.

THE INCENTIVE SYSTEM

I’ve actually talked a lot on what the jurors will lose when they vote incoherently, how about what they get when they vote right? If a juror voted for an option chosen by the majority, it is said that he voted coherently. Thus, he earns more tokens. The contract creator that loses the dispute pays an arbitration fee while the jurors that voted incoherently loses their tokens too. These fee and tokens is distributed among the winning jurors along-side the token they deposited earlier.

_{From the whitepaper}

The figure above shows the dispute Bob lost, his arbitration fee was distributed among the jurors while the ones that voted incoherently had their tokens distributed among the other judges too.

KLEROS OFFERS THE CHANCE FOR APPEALS

Just like the offline court of law, a party might not be satisfied with what the jury had decided. It can appeal and the decisions would be made again. This time around, twice the number of the jurors plus one would be made available and the party needs to pay an appeal fee. The jury’s decision is always proven to be fair and convincing enough so there’s a less chance of appealing.

BENEFITS OF THE KLEROS SYSTEM

It saves costs of having to settle in offline, in a court of law.
Kleros secures your privacy.
It’s bribe resistance. You obviously can’t contact a juror.
Only people that specializes on the dispute you found yourself in can judge it.
Kleros offers chances for an appeal.

APPLICATIONS OF KLEROS

Escrow: Kleros can serve as an escrow service for exchangers and marketers. Funds would be saved in a smart contract and it will be released when the agreement is reached between the individuals.
Oracle: The jurors can be used in this case to give the right answers when a dispute resolution procedure ensures.
Insurance: In a case where the insurer and the insuree doesn’t agree, Kleros would be the best alternative to resolve such dispute.

Other applications of Kleros includes: social media, Micro tasking and curated lists.

CONCLUSION

Kleros is ready to solve every dispute that ensures between small businesses and the large corporations. Small businesses need not worry about the large sum they need to spend in settling a dispute, most times they tend not to press on because of the charges they might face. Kleros offers a less charge and the system is very fair in the way it passes the verdit. The use case 2 shows how large corporations gets to benefit too. Kleros is the platform everyone needs when disputes surfaces.

Here is a diagram that explains the disputes between Peter and Michael from the use case 1 and how everything was settled.