Online Dispute Resolutions
Imagine a world where disputes could be resolved anonymously online. That’s precisely what Kleros is designed to achieve.
Kleros is an open-source decentralized organization that gives any product, service or organization the ability to resolve disputes through an innovative form of crowd-sourced arbitration.
The name ‘Kleros’ means ‘chance’ in Greek and is related to the word ‘Kleroterion’, which was a stone randomization device once used in ancient Greece as part of their democratic process.
Kleros is the brainchild of Dr. Federico Ast, Ph.D and CEO of Kleros, who graduated from the schools of Economics and Philosophy of the University of Buenos Aires (UBA). He has also been strongly associated with various projects involving artificial intelligence, collective intelligence, and finding ways to use blockchain to solve social problems.
Founded in 2017, Kleros is incorporated as a French Cooperative called SCIC (sociétés coopératives d’intérêt collectif). This Legal entity operates under French jurisdiction and provides the appropriate model of governance and legal framework.
Federico Ast told The Scope Weekly during an email interview, that “At this time Kleros is still in the early development stage but plans to launch officially by Q2 2018. We are currently running pilot cases to test the systems and monitor results.”
Dr. Ast understands the potential of blockchain to transform current legal business models, but also how smart contracts have the ability to transform the operations of various industries. “Cryptocurrencies are the tip of the iceberg. From a broader perspective, blockchain is a technology that will democratize access to finance, laws, and government. It will also transform the operation of the internet itself,” he said in a press statement.
The vision behind Kleros was to build a justice protocol for the Internet that could provide tribunals on demand. The platform is a decentralized organization that is owned by no one and is intentionally not backed by any institutional investors.
The existing dispute resolution technologies can be cumbersome unwieldy, expensive and too unreliable for a global economy that is quickly becoming decentralized. By comparison, Kleros aims to provide a fast, transparent alternative to dispute resolution that is reliable and inexpensive, while providing an enforceable judgment.
How Kleros Works
Kleros was built and based on the Ethereum blockchain, designed to act as a dispute resolution layer for virtually any product or service. The protocol can be used to evaluate complex evidence, as well as adjudicate claims. The innovative resolution platform allows users to create a smart contract, selecting Kleros as the adjudication protocol.
Any relevant information relating to the dispute is then sent to Kleros over a secure connection. Kleros relies on concepts taken from cryptography and blockchain in order to secure evidence submitted to each case. The same concepts are also used for selecting a panel of jurors, who remain anonymous throughout the decision-making process.
Kleros uses a panel of randomly-chosen experts engaged to make transparent decisions. A tribunal is drawn from the pool of available people, allowing jurors to then evaluate the evidence presented to the case before reaching a carefully deliberated decision and casting a vote.
Whatever decision the jurors reach is enforced by the smart contract. After the decision has been finalized, the tribunal is dissolved.
Smart Contract Judgements
The Kleros project relies on jurors voting coherently to reach a decision, based on the evidence provided. Each step of the arbitration process is fully automated, including selecting the panel of jurors and securing evidence submitted for each case.
Jurors participating in the project will be rewarded for their efforts. The basic insight is that jurors who take the time to vote coherently based on the evidence provided should be rewarded, with a form of payment being discussed for participants who do the right thing. However, those jurors caught voting incoherently may be punished by having rewards removed.
When a decision has been reached by the crowd-jury, the smart contract automatically executes and enforces the decision reached.
Potential Uses for Kleros
Early applications for Kleros are based around small claims arbitration. However, Kleros can be integrated into almost every type of application being created online. The potential uses for Kleros can be used as a third-party arbitration system for a vast range of decisions needed between parties.
As an example, assume a business owner engages a freelance software developer to create code for a specified project and a dispute arises between the parties. The question is “should the freelancer refund the client’s money?”
Using the Kleros platform, a jury of software experts are given the opportunity to analyze the evidence provided and reach a verdict. It’s expected that the protocol’s uses may be expanded in time to encompass a broad range of decisions that require technical expertise.
It will be interesting to see where the future of Kleros ends up.
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