KLEROS; Resolving Disputes on The Blockchain and Smart Contracts.

in #crypto3 years ago (edited)


Humans as social beings interact with one another, and in the process of communication and interacton, diverse opinions are bound to happen. Expectations may not be meant, disputes over how things should be done and the likes. No matter how ‘minute’ the situation might be, a third party is actually welcomed to resolve the issue.
The process of resolving disputes might be stressful, and then of course, there is the possibility of the Third party to side one of the individuals involved. Kleros is that third party that will resolve the issue, ‘big’ or ‘small’ effectively and efficiently.

What is Kleros?

Kleros is a decentralized application built on Etherum that acts as a third party to resolve disputes in smart contracts. Kleros relies on the rational decision-makers and not just a few individuals.
Kleros is fast, inexpensive, reliable and transparent. Every step of the dispute resolution is fully automated, ranging from securing the evidence to the selection of the jurors. It combines the basic ideas of the Blockchain, crowdsourcing and game theory to produce a justice system that produces true decisions.
Justice is served
Kleros is based on a similar mechanism to Schelling Coin in terms of scalability, subjectivity and privacy as it ensures the Agents act properly without fear or favour. Basically, this is made possible by the economic incentive. Agents for example choose either Yes or No. The Agents who voted the most popular option get rewarded with 10% of their coins, and those that went with the least popular choice (minority vote) lose 10% of their coins.

How Kleros works

- Arbitrated Contracts:
gcot.PNGBoth parties involved in the dispute must have first decided to employ the help of Kleros in case any dispute arises, and they must specify the number of Jurors they want, and the type of court that will settle it. For example, an e-commerce contract will employ the help of an e-commerce court.

- Options for Jurors:
The contract specifies the options for the Jurors. The smart contract would also include the ways the contract would behave after the Jurors have voted for any of the options made available.

- Privacy:
Private information’s may be required of both parties in the process of sourcing for evidence. To prevent unauthorized persons from viewing these information, the language as well as the voting options of the Jurors are not made available on the blockchain.

- Drawing of Jurors:
Before a user can be chosen as a Juror, he must first deposit a token (Pinakion). The more tokens deposited, the greater his chances of being chosen. The token serves two purposes; ensures that no malicious party can cause the drawing of Jurors to favour one of the parties, and also ensures the Jurors make the right decisions because a wrong decision would lead to them paying an amount of token to the Jurors that made the right decisions.

- Votes:
The Jurors go through the evidence and each of them get to vote for one of the options, which by the way is irreversible, and is known to him alone. After voting, the Jurors reveal the option they each voted for, and then a Kleros smart contract verifies that it’s a match. The votes are summed and the smart contract is executed.

- Arbitration fees:
The subcourt specifies the fee that will be paid to each of the Jurors for taking out time to resolve the dispute between the two parties involved. The smart contract also determines who gets to pay the arbitration fee.

- Appeals:
An appeal is made if one of the parties is not satisfied with the outcome. The new appeal will have twice the previous number of Jurors.

- Incentive System:
This ensures honesty by making sure Jurors with votes not in line with the group lose some tokens.

Kleros and how it will change the way individuals and businesses deal with disputes

Disputes are unavoidable, no matter how much energy we expend trying to avoid it, and it is only logical that a free and fair panel review the situation and pass the correct judgment. Companies and individuals spend a lot of money hiring lawyers and going to court. The whole process that drag on for days, and this is very expensive as well as time consuming.
The public image of a company can be severely affected when the public find out about the court case, and can lead to a reduction in profit as individuals may not want to deal with them. Other issues may even arise as one dispute can lead to another.
There is also the possibility of the panel of judges to be biased, as they are liable to being bribed.
However, with Kleros it is all totally avoided. Kleros is fast, cheap, reliable. There would be no need to hire lawyers, as this would reduce the cost involved.
Dispute resolutions would be fast and effective. The idea of ‘bribe’ is totally nonexistent.

Some types of disputes resolved through Kleros (APPLICATIONS)

As earlier stated, disputes are bound to arise and its best settled peacefully, and Kleros ensures disputes are settled amicably.

The insurance company basically comprises of The Insurer (The Company) as well as the Insuree. Without the Insuree, the company is as good as dead. The Insuree deposits some amount of money to insure a property for example. If the situation eventually arises, that leads to the loss or destruction of such property, the Insurer compensates the Insuree. However, if the company does not validate the event, a dispute is opened. And the Jurors decide who’s right and wrong and compensations are paid to the relevant parties.

•Social networks:
One of the many problems of The Social network is the tendency of abuse, which could be spam, or scam. When an individual feels his/her has been a victim, and the network policy has been violated, a dispute is opened between the network and the individual, and the Jurors get to settle it by going through the evidence provided, and making a judgment on which party has defaulted. And if for example, it is ruled that no violation happened, the reporter or user loses his security deposit to the accused party. But if the violation actually happened, the content is either removed, or the posters outreach is lowered or the content poster can even lose a sign-up deposit.

This involves the purchase of goods and services with the aid of a middleman. To purchase the products, the funds can be put in a smart contract. After receiving the products, the buyer if content with it, releases the funds. If not, he opens a dispute using Kleros. As the situation may be, Kleros can either reimburse the buyer, or pay the seller. It makes it easy and fast for the situation to be resolved, and eliminates the idea of suing just because of a few hundred dollars.

•Micro Tasks:
Decentralized platforms pay for micro tasks to be carried out by individuals. The ‘Taskers’ put a security deposit and submit the answers to the task they have been assigned. Individuals that made mistakes in the tasks would admit their errors, and this would transfer a part of the security deposit to those Taskers that performed the task correctly.
Kleros is involved if the losing party stands their ground and refuses to release part of the security deposit. The Jurors after determining and ruling that they are at fault, the losing Taskers would have part of their security deposit transferred to the winning ones.

Advantages of Kleros

•Fast and Secure
•Anti Bribe
•Best possible outcome.

Use Case

Mr. Tunde requires a certain graphics design for his business. He employs Teejay and Sons Limited to carry out the tasks as they are specialists in graphics design. They both come to an agreement, and settle on the fee of $1000. They deliver the design, but Mr. Tunde is not satisfied, as the product does not meet his expectation, considering the amount he paid. On the smart contract employed, he clicks on ‘’Send to Kleros” and fills a form. A graphics designer in Wales, Miss Shaw sees it and deposits some Pinakion token so she will be selected as a Juror. Similar information is sent to other registered graphics designers. Several other persons in that field receive the information and are selected randomly. They all collaborate and decide who is right.
Miss Shaw votes in favour of Mr. Tunde after going through the evidence. After the jury has voted and the decision is reached, Teejay and Sons Limited, and Mr. Tunde receive a mail, stating the jury rules in favour of Mr. Tunde, and asked that his money be transferred to him. The Jury is rewarded. Case closed.


Individuals, small and large businesses get to benefit, since Kleros provides a platform for disputes to be settled amicably. Kleros is effective, efficient, cheap and fast. I advise we all integrate Kleros into our business.

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