When we hear the word dispute, first thing that comes to mind is “disagreement,” ”argument”, “conflict”  e.t.c. This is something we experience in our everyday social life, so, is not something new to us.  

According to Wikipedia:

Social conflict or group conflict occurs when two or more actors oppose each other in social interaction, reciprocally exerting social power in an effort to attain scarce or incompatible goals and prevent the opponent from attaining them.

The pursuit of interest generates various types of conflicts. Some disputes are handled by just mere communication in which we see several cases like that among family members and friends. while some disputes can be tasking, expensive and can take a very long period of time before an agreement is reached. We come across such disputes in business and orgaisations. In order words, dispute is a normal way of life. But for the sake of this white paper, i will be limiting my post to disputes found in organisation and the best way is been handled with kleros.

With the growing pace of globalization and digitalisation in this 21st century, in a not so distant future, most goods, labor and capital will be allocated through decentralized global platforms, thereby increasing the rate of transactions taken place through the internet, which knows no bound. Imagine what will happen when all this comes into play? When i see a PS4 game on eBay and i order for it, only to see a PS3 game at my doorsteps. What comes next? Disputes. Because i will definitely ask for a refund since eBay didn’t send the goods as specified in the agreement. Some might argue that if this services are been run on blockchain, with the help of smart contract, it will help curb all this disputes automatically. For me, is a welcoming idea to involve blockchain smart contract to automatically execute as programmed but it also has its shortcomings which is, it can’t  render subjective judgments or  include elements from outside the blockchain in a real life situation. Even the existing ones are too slow, expensive and unreliable. 

Come to think of it, what if there was actually a platform out there that is reliable, inexpensive and can right the wrongs to avoid dreadfully long and painstaking disputes among two parties. 

Enjoy the joy ride as i take you down the lane, discussing about “KLEROS”, which was built for this nature. 

Source 

I know this name might sound quite strange to a lot of us, since it was introduced newly to the blockchain system. My best bet will be to make a use case scenario to give a detail explaination of how KLEROS actually works.

Brian a Ponzi scheme lover that resides in Nigeria has dived into so many ponzi schemes  and has lost a huge amount of money and is fed up. He said to himself, why don’t i create a better and long lasting platform that will benefit all. He puts his plans into action, made out various strategies to tackle insufficient funds in the pool system in case it arises and when he was through, he sent the stuff to Gabriella, a programmer based in the U.S to design the site for him after they agree on a particular price, terms and conditions and also putting into consideration how tedious the Work might be, a set date of 2 months was agreed upon. 

Two months later, Gabriella completes the work and delivers it to Brian. Brian was not satisfied with the work considering how much he has spent. Gabriella replies that is what was stated in the agreement. Brian is very angry that his plans haven't been achieved but what gets him more infuriated is that he can't hire a lawyer for such a little amount of money with someone who he has no idea her whereabouts but only communicates with her through the internet. 

One way or another, we've either been in a situation similar to this or must have heard someone who must have passed through this same ordeal. The only way out for such situation is through KLEROS platform. 

KLEROS

Kleros is a decentralized multi purpose decision protocol built on Ethereum that works as a third party to settle disputes in every kind of contract between two parties from very simple to highly complex ones. Kleros leverage on crowdsource technology, blockchain and game theory to develop a justice system since it doesn't rely on the honesty of a few individuals. Every step of the arbitration process is fully automated whereby the agent (jury) follows a laid down principles where an input (evidence) is used to produce an output (decision). The interesting part of KLEROS is that, it comes in a secure and cheap package.

Source

Imagine, if the scenario painted above had a clause to it. Boldly stated that “in case of infringement of contract, it would be sorted out in the Kleros court.” All Brian has to do is to tap a button that says “send to kleros.” Feel a simple form explaining his  claim and pay an arbitration fees to the jurors depending on the subcourt the dispute is solved. The arbitrable smart contract will determine which party will pay the arbitration fee. In Dubai, Miracle a recognise software developer who is well known as a juror and has preside over several dispute cases between freelancer and their clients, applied in kleros website to be a juror in order to make some extra bucks since he has the set skills and experience to preside over similar issues. Miracle deposits pinakoin. The probability of Miracle being drawn as a juror for a specific dispute is proportional to the amount of tokens he deposits in the system. This way, inactive jurors aren’t selected since they don’t deposit any token to the system.

In jury selection, there is every possibility for Miracle to be selected more than once but in reality it is unlikely because the amount of time he is drawn up determines the number of votes he will get in the dispute and the amount of tokens he will win or lose during the token redistribution. In order to avoid manipulation like a situation where “an attacker could create disputes between himself, select himself as a juror multiple times and select another victim juror in order to steal tokens from the victim when pinakion are redistributed,” Random numbers are generated with sequential proof of work using a scheme similar to Proof-Of-Stake blockchains.

After the automated selection process, if Miracle happens to be among selected jurors who were randomly picked from different countries considering the amount of pinakoin they have deposited from the pool of candidate, an email of the Brian’s case will be sent to them, stating the time they are expecting to get there feedback.  They will never know each other, but they will collaborate to settle the dispute between Brian and Gabriella. Miracles sets off to work, examines the websites thoroughly. If it happens that the website doesn’t meets standard, Miracle will cast his votes in favour of who is right. 

Options for Jurors 

Before Miracle cast his vote, he is faced with multiple options like; 

• Reimburse Brian.
• Give Bob one extra week to finish the website.
• Pay Gabriella.

If it so happens that Gabriella work happens to be so bad, Miracle will support for “reimbursement of Brian.” A week later after the other juries must have casted their own vote within the stipulated time and it tallies with Miracle’s vote, an email is sent to both parties. If the votes casted by the juries are ruled in favour of Brian, the kleros smart contract will transfer the money to Brian. Jurors are rewarded for their work and the case is closed. 

Arbitration fees

Arbitration fees is the fee paid by the two parties in dispute to compensate jurors for their work. 

If in a situation, Gabriella  fails to honour the contract, by not paying the required arbitration fees in the smart contract, the smart contract will consider that the court ruled in favour of the Brian who deposited the arbitration fee (without even creating a dispute in the court). If both parties deposit the funds, the winning party will be reimbursed when the dispute is over.

Appeal and Bribe resistance 

In a situation were the jury has given there verdict in favour of Brian, if Gabriella doesn’t agree with the rulings and she feels they were unfair, she can seek for an appeal in the kleros court  and have the case looked at again for the second time. But this time, it will require twice the former set of jurys plus one. That will require new appeal fees to be paid to the new jurors. (The reason for the extra set of jurors is to fight against bribes and no one in his right sense will want to keep appealing when majority keep giving the same answer, except the attacker is prepared to spend such a large amount to bribe juror all the way to the General Court for something worth a few hundred bucks).  When proper explanations are given by the incentivize jurors, Gabriella is now convince and accept the decision of the juror to be fair.

Incentive system

Peradventure, Gabriella gives bribe and Miracle, who is one of the juror accepts her bribe and his votes is not coherent with the group, Miracle will lose some tokens that is originally meant for him and will be distributed to the remaining jurors. The reason is because, since the redistribution mechanism is inspired by schelling coins some options will be perceived as more likely to be chosen by others parties.

source

types of disputes that can be resolved through Kleros

Kleros is a decision protocol for a multipurpose court system able to solve every kind of dispute. It is an Ethereum autonomous organization that works as a decentralized third party to arbitrate disputes in every kind of contract, from very simple to highly complex ones. Every step of the arbitration process (securing evidence, selecting jurors, etc.) is fully automated.[NUL]

For small companies

Small scale enterprises do not have the luxury of hiring lawyers that will Fight there cases and they lack the capital to face greater opposition once faced with big companies. In traditional court, because of the High rate of bribery, big companies always win the case but with kleros court bribery is very rare because jurors controls 50% of the tokens. Kleros, therefore, forms a better alternative not only for handling the dispute but also the cost of dispute. Both (handling dispute and cost) have been explained earlier

Team

For more information, visit :

Kleros Website
Kleros WhitePaper
Kleros Medium
Kleros YouTube
Kleros Telegram
Kleros Twitter
Kleros Github
Kleros Forums

Twitter link: https://mobile.twitter.com/SbamsonTammy/status/1032154737200771077

Kleros2018

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