🔎The Basics About The Project Behind $PNK (Pinakion): Kleros | 🏛The Blockchain Project that “Brings Justice to the Unjusticed” of the digital era | ⚖ Kleros´ Potentialities, Use Cases and Future To Come.

Disclaimer: This is not financial advice, my goal with this post is to facilitate your research process by putting togheter what is relevant and its sources.

Though the smart contract is a great tool for contract enforcement, it is pretty limited when addressing nuance/subjective information is needed

A fear that has always tormented the decentralized ecosystem is being scammed by the person on the other side of the screen.

This fear leaves tons of money waiting at the mainstream side of the adoption chasm as they see some of those bold — early adopter— souls falling into disgrace.

You see, it is expected that by 2030 dApps will transact close to $3.1 Trillion and the value disputed on them will be around 3- 5% of the total value transacted.

From the Kleros one-pager: https://kleros.io/static/onepager_en-3165e4676c4ed1529064608a83967c23.pdf. The data is from the paper linked above.

That leaves $150 Billion at the edge of disgrace which old centralized solutions may find it hard to adapt to — since, this new economy requires a fast, inexpensive, decentralized, and reliable arbitration mechanism.

To put it in simple terms, the Blockchain Revolution — as did the Industrial Revolution— needs cars, not faster horses.

The project that best fits “the description of a car” and more is Kleros.

That one project acknowledged by:

  • Vitalik Buterin (He recently mentioned that “…I´m being a fan for a long time…”)
  • Jack Dorsey (the previous CEO of Twitter followed a year ago find out why in use cases below)
  • The European Commission (prized Kleros as the winner of the blockchain and social good prize on Horizon 2020 research innovation program.)

Why? Because they see Kleros has the potential to become the courts of the blockchain era; while scaping the old ways´ limitations and giving virtually anyone incentives to solve these disputes.

Prepare your blockchain utopias, because, in this post, I´ll explain the way we might solve disputes in the decentralized future.

Before we start, “Kleros” name comes from the greek meaning “Ramdomness”. While”Pinakion” was the name of a small tablet used to vote by ancient greek jurors.Along the way, you will probably notice this project is heavily inspirided on greek democracy.

🧐So…What is Kleros and How It Works?

“Our mission is to develop software enabling access to justice and individual freedom”Kleros team´s Mission

If you´re of the audiovisual kind, watch the Kleros´ CEO (Federico Ast) explanation at the Thomson Reuters Generate Event – London 2018:

https://m.youtube.com/watch?v=1vtxp8RrpOA&feature=youtu.be

If you love to read but not too much, here is the TL; DR:

In essence, Kleros is a blockchain dispute resolution protocol for smart contracts. What differentiates Kleros — makes it a car— is that it uses game theory (Schelling point)* and economic incentives to make randomly crowdsourced jurors adjudicate honestly based on the evidence.

* “Schelling point is the solution that people will tend to use in the absence of communication because it seems natural or special to them.” In this case, the evidence of the dispute.

But this description does not make justice to all that Kleros does…

Let me exemplify how it works with Kleros Escrow:

If you have ever bought anything from a freelancer or product online you will understand the headache that can occur if there is a dispute.

I.e., You buy a product that turns out is not to your liking, you raise the issue with the supplier, and then it is a constant back and forth trying to reach a compromise — if you ever reach one at all.

Or in freelancing terms:

E.g., Alice, from France, hired Bob, from Guatemala, to develop an e-commerce website paying $500.

When Bob tells Alice the website is done, she argues the website isn´t what she expected and that she wants her money back, while Bob claims he fulfilled all the requirements of the contract.

Their options to solve this dispute:

Use a Frech or a Guatemalan court

  • Not viable and probably more costly than the amount disputed.

If given the case, ask the contact platform to do the arbitration

  • That sounds sensible, but is it likely that the platform has a dispute system? Is the platform willing to hire experts to solve such a small dispute? If it has, can you trust the decision is not biased or that the adjudicators are not bribed?…

Simplifying things a bit, Kleros takes the headache out of this in 2 phases:

🤝Phase 1: The contract

Kleros Escrow Infographic Flow from https://kleros.gitbook.io/docs/products/escrow

  1. With Kleros, Instead of directly handing the money to the supplier. The money is sent to a securely locked smart contract which code establishes that any dispute will be solved using Kleros — or the platform they used for contacting has integrated Kleros Escrow as its dispute resolution system.
  2. Once the money has been locked into the smart contract the seller or supplier begins work.
  3. Once work has been completed the seller submits the product to the buyer.
  4. If the buyer is happy with the work the money is taken out of the smart contract and sent to the supplier and that is the end of the transaction. If it´s not happy…

E.g., This time, our friends Alice and Bob, agreed to develop the e-commerce website locking $500 on a smart contract that has coded Kleros as its dispute resolution system…

🤼Phase 2: The Dispute

⚙Here is a diagram of how it works:

Kleros Adjudication Process, from The Dispute Revolution Book https://kleros.io/book

To summarize each step of the arbitration process:

  1. The fee (ETH) is paid to start the dispute — could be crowdfunded or funded by the parties, in the second case the losing party pays the fee.
  2. Kleros randomly summons “expert” jurors who have staked the coin Pinakion (PNK) on a court specialized in the field of the dispute (Freelancing-E-commerce).
  3. Both parties submit evidence that supports their claims (pictures, links, videos, etc…).
  4. Then jurors — based on the evidence— have to adjudicate which party is honest and deserves to win.
  5. Once they reach a decision, the funds are either refunded to the buyer (Alice) or sent to the seller (Bob) — You can always appeal if you are unsatisfied with the results, though it gets costly each time.
  6. Those jurors who choose in consensus with most of the jurors, -— Schelling Point in play—, earn the arbitration fees (ETH)* and, if given the case, earn the staked PNK from jurors that choose to favor the dishonest party.

*Some courts may have different requirements to join, some just differ in minimum PNK staked and others on expertise requirements. Also, be mindful that some courts give better rewards than others.

Bob (to the left), the loser in the dispute against Alice loses his 1ETH deposit, which is used to pay arbitration fees to all coherent jurors. Ignasi and Julio, the two jurors that voted incoherently with the rest, lose their PNK, which is transferred to the jurors who voted coherently. Daniel, Ezequiel, Frederic, Gabriela, and Hadass, the jurors who voted coherently, experience an economic gain in ETH and PNK. From the Dispute Revolution Book: Incentives Design: the Combined Effect of Arbitration Fees and Token Redistribution

👨‍⚖️Why would anyone want to be a Juror?

Imagine that you´re a knowledgable front-end dev, you depend on freelancing gigs and you´re looking for an extra buck without much effort. By being a juror — on the court of your expertise— you get:

  1. A chance to gain a bit more experience seeing work poorly done.
  2. Staking rewards for staying in a court.
  3. After a coherent vote PNK (from uncoherent jurors) and ETH (from the arbitration fees).

If you´re interested in becoming a Juror: (MOD, there is no referral system for this, please, chill)

✅Step by Step of how to become a juror look at this guide: https://www.youtube.com/watch?v=vRhD5WnUX3k

📖Or if you’re rather fond of words, read this guide: https://blog.kleros.io/become-a-juror-blockchain-dispute-resolution-on-ethereum/

👨‍💻What if Kleros is attacked?

If you are smart, the above may raise some vulnerabilities concerns such as:

  • Concentration of power on decision-making.
  • Odds to be summon
  • Bribes
  • Non-binary options voting systems
  • Etc,…

But Kleros´ Crypto-economist William George, is smarter. Than attackers, don´t get offended XD

He is doing a great job to make all these attacks waaay harder and costly than they would be on a traditional court or any other centralized dispute system.

You can find his work on the attacks thoroughly addressed on 2/3 of the Kleros´ yellow paper. and the Dispute Revolution Book

🛡E.g., Sybil Attack protection.

From the Dispute Revolution Book on Why Kleros needs a Native token: Security and Incentives in Decentralized Justice

One of the major attacks that Kleros could face is a Sybil attack. This is where the reputation of the network is attacked by creating multiple identities.

In Kleros’ case, this would mean staking multiple ETH wallets with PNK in them and then using this PNK to manipulate jury decisions undermining the project. However, if you were to carry out this attack you would destroy the value of tokens you just bought.

This economic incentive structure plus the forking mechanism importantly reduces the likelihood of an attack.

Not to mention that an attacker has to be superhuman to adjudicate in all the 9 courts and their sub-courts.

Check all the courts available at court.kleros.io

For other kinds of concerns, I suggest you read the answers to common Kleros criticism here.

If you´re rather interested in learning about the tokenomics of PNK, Check out the Kleros Gitbook.

👨‍🔬Which Are Kleros Use Cases?

The Escrow example is just the tip of the iceberg; Kleros has plenty (maybe endless) applications for the blockchain era.

This infographic shows several companies from the decentralized ecosystem which could use Kleros as a dispute resolution partner or build applications on top of the Kleros protocol (some already do). From Dispute Revolution Book

To illustrate:

Kleros has been used on +1000 disputes (solved both online & offline)

Not to mention the current 12 integrations

Kleros Integrations Current Ecosystem.

Let me show you a list of some of its 4 tested use cases:

Subjective oracles.

Any question that objective oracles cannot solve (E.g., Chainlink) can be resolved by crowdsourced jurors on Kleros. E.g., Kleros integrated into Omen, solved the millions of dollars bet on who won the 2020 U.S. election:

Token Listing

Uniswap has already integrated Kleros. To provide coin contract verification using the decentralized jurors.

Freelancing

Linguo project: a platform for freelance translation with a built-in dispute resolution mechanism.

Sybil resistance human identity verification systems:

Proof of Humanity dashboard The first proper integration of human identity verification on the blockchain. A proposal that Vitalik raised in 2019

15 Potential Use Cases

1. Development bounties

A dev team lists bounties to reward developers who build specific features or find bugs. A developer claims he developed the requested feature or found a bug. The dev team denies it. The evidence goes to dispute resolution. The jury decides who is right and the payment is executed accordingly.

2. Milestones to release funds in crowdfunding campaigns

Project managers pledge to develop a product and set up milestones. Each milestone releases a specific part of the funds raised in the crowdfunding. If milestones are not reached after a deadline, funds are reimbursed to contributors. Kleros solves claims based on milestone completion.

3. Website integrated payment

Websites can display payment buttons allowing their customers to make escrow payments. If customers do not receive goods and services as they should have, they can request a refund. The decision is made by Kleros jurors.

4. Micropayments for attention

Users can install a special plug-in and fund their accounts. Websites on the network don’t display ads to these users. Users of the network make automatic micropayments to the websites they visit. Websites can enter the network by making a deposit. When a user notices that a website he paid for still displays ads, he can report it and claim the deposit of the violating website.

5. Inheritance

The will-maker uses an inheritance smart contract account to store his assets (ETH, Bitcoin, collectibles). He designates heirs to receive the funds upon death. If he doesn’t interact within a predetermined time, heirs can claim that the will-maker is dead. Anyone can counterclaim that the will-maker is in fact alive. Kleros can rule on the death of the will-maker (for example, by looking at the death records). Funds are transferred to the heirs if the will-maker is considered dead.

6. Car Insurance

Bob rents Alice’s car for the weekend. Bob sends $1000 into an escrow which will be refunded after the car is returned in good condition. Alice claims the car was damaged. Jurors estimate the damage at 300$. That amount is then sent to Alice from the funds deposited in escrow and the remaining $700 is refunded to Bob.

7. Auto-promises

Users can make promises with themselves by depositing a stake. If a person commits to losing weight, quitting smoking, exercise more, they put funds into an escrow. If they do not comply with the promise given, funds in the escrow are burnt. A panel of Kleros jurors defines whether the promise was indeed kept.

8. Moderate social media for profanity, illegal content, or NSFW content

Bob makes an unsavory comment on social media. The comment is flagged as profanity. Jurors vote that the comment violated the terms and conditions of the platform. Bob loses reputation points or is suspended/banned. This is why Twitter’s CEO Jack followed Kleros jurors could adjudicate fake news disputes on social platforms See more about this here.

9. Avoid plagiarism in content platforms and NFT marketplaces.

Bob uploads a video/NFT to a video-sharing platform/NFT marketplace. Alice claims that he plagiarized a previous video/NFT of hers. Kleros jurors decide that the video/NFT was indeed plagiarized. The offending video/NFT is deleted

10. Removing fake files from torrent networks.

When a user sends a file to a torrent network, he needs to make a deposit. If the content in the file does not match the title description, other users can challenge it. Any dispute then goes to Kleros.

11. Securing Decentralized Finance Platforms

Users can submit tokens with their name, address, ticker, and logo. Incorrect submissions can be challenged. Applications (wallets, decentralized exchanges, etc) use this list of tokens to allow their users to select tokens without having to type their addresses and to display user balances.

12. Sports betting

Gamblers place their bets on sporting competition results. Bettors who bet on the right result split the money lost by other bettors. If there is a dispute between parties over who actually won, that information is obtained through a Kleros-based jury decision.

13. Proof of ownership

Alice wants to mint an NFT backed by a Real World asset (Cars, real state, collectibles,..) and uploads evidence to the NFT marketplace. Kleros Jurors verify that Alice is indeed the owner of the NFT and now can transfer the ownership of the asset through the NFT.

14. Real World asset NFT ownership disputes

Bob steals/falsify a real-world collectible from Alice and publishes it in an NFT marketplace. Alice raises a dispute with evidence of being a previous owner and the theft. Kleros jurors give back the NFT to Alice.

15. NFT perks disputes

Alice buys an NFT that claims to give her access to a perk (VIP area, power-ups in gaming,…) but it doesn´t. Alice raises the dispute against the seller in the NFT marketplace and submits the evidence. Kleros jurors verify Alice's claim, she is reimbursed and NFT is burnt.

And there are more…

After all of the above, you may think…

🤔This project looks platonically* solid! Why haven´t they “mooned” yet?

Sorry, couldn´t let that pun pass,🤣 if you got it, please comment “🎲“*

You may have already looked for the charts and found that the price of the PNK fails to reflect what one might expect of its value proposition:

  • Kleros IDO was 0.02 USD back in July 2018.
  • It has since grown to a value of 0.10 -0.12 USD (start 2022).
  • With a peak like all-time-high of 0.48 USD.
  • And a Market Capitalization of 3,8 Million.

All Kleros prices cited from* https://coinmarketcap.com/currencies/kleros/

The reason behind this is that scalability has held back its potential; since Kleros runs on the Ethereum network, high transaction fees have made raising new disputes quite costly.

And although, the team has already tried to tackle this problem by also running the protocol on the xDAI chain. The UX of bridging staked PNK is not quite attractive for early adopters YET.

⚠FUD not!

Kleros has already raised a couple of millions in capital to address this problem with Layer 2 solutions (Optimistic roll-ups), along with improvements of UX expected to be running by Q3 2022.

See how they are working on Court V2 at this presentation:

https://www.youtube.com/watch?v=9rtAu7gEkk0

🤨Should you trust the team behind Kleros?

Unlike a good amount of crypto projects out there, the founders behind the Kleros project show their identities:

Federico Ast, The CEO of Kleros. Holding a Ph.D. in management he specializes in blockchain, fintech, and now legal tech most notably with Kleros.

Clément Lesaege, the CTO of Kleros. Being a computer scientist he become interested in using blockchain to enforce dispute resolution. When Ethereum launched he realized that might just be possible.

Among the two founders, there is also a solid team of researchers, advisors, developers, and ambassadors backing the project.

Meet them at their EthCC talks held on July 20–24, 2021 https://twitter.com/Kleros_io/status/1422135391939874819

Conclusion

As said in the title, just as Bitcoin “Brings Banking to the Unbanked”, Kleros has the potential to “Bring Justice to the Unjusticed”. This potential only waiting to be unleashed with layer 2 solutions to scalability by the EOY.

So, IMHO, I believe that more sooner than later, whenever we find a dispute, we will find ourselves saying:

“Just use Kleros”

What do you think of the project?

I´ll be glad to read your thoughts in the comments.

And thank you for reading😁

🔎The Basics About The Project Behind $PNK (Pinakion): Kleros | 🏛The Blockchain Project that

1 thought on “🔎The Basics About The Project Behind $PNK (Pinakion): Kleros | 🏛The Blockchain Project that “Brings Justice to the Unjusticed” of the digital era | ⚖ Kleros´ Potentialities, Use Cases and Future To Come.”

  1. ❔For more inquiries regarding use cases, integrations, and more, you can look at Kleros FAQ here: https://kleros.gitbook.io/docs/kleros-faq

    🌐Also, visit:

    • Website: https://kleros.io/
    • Github: https://github.com/kleros
    • Blog: https://blog.kleros.io/
    • Youtube channel: https://www.youtube.com/channel/UCEjwygFVVrSXhPNEfweypA

    📖Read the Dispute Revolution book for 🆓: https://kleros.io/book
    💭Check out the forum for all news regarding policy update proposals: https://forum.kleros.io

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