Announcing a Partnership with Kleros to Solve Transaction Disputes
Hi everyone! Today we’re thrilled to announce our partnership with Kleros a new blockchain dispute resolution protocol. This is the first of several partnerships we have in the works, and we truly love what they are doing.
Kleros will work as a mediator, helping to resolve transaction disputes within the Ink Protocol. With Kleros, members of the community can serve as jurors, with the task of mediating transaction disputes through a voting mechanism. The protocol will provide a fair and decentralized way to settle transaction disputes, while at the same time providing financial incentives and putting power in the hands of you, the community!
Ink will use Kleros technology to make sure that product offerings are compliant with the rules of the platform and give buyers and sellers an easy and straightforward way to protect themselves when transacting outside of large, centralized marketplaces.
A Closer Look
It’s inevitable: online transactions don’t always go according to plan. From missing deliveries to faulty goods, a number of issues can arise. In centralized marketplaces that’s where moderators step in — authorities paid by the company to examine disputes and and act in one party’s favor. As a decentralized transaction protocol we’ve been exploring ways to not only match, but also to improve upon this system, and with Kleros we’ve found a great solution that plugs into our mediation system.
Kleros will act as a second layer of resolution — only used if a buyer and seller can’t come to a resolution among themselves. To use Kleros as the dispute mediator, we are building a smart contract that conforms to both to the Ink Protocol as well as their own standard. The dispute can be resolved before going to a mediator, but if the parties are unable to come to an agreement within a predetermined time, the transaction dispute is escalated to a mediator contract that will handle the Kleros integration.
The Kleros process begins by randomly selecting a jury from available members of the community, and providing them with the details of the dispute off-chain. Members of the jury examine the provided evidence and vote on a fair dispute resolution. The voting options will be a refund to the buyer, advance funds to the seller, or mutual settlement. Once all votes are cast the results are counted, with the winning response being triggered on the Ink protocol. The system will be easy, intuitive and effective — with smart contracts on the Ethereum network handling the entire process behind the scenes.
We think the Kleros system is a powerful asset to the Ink Protocol, providing resolutions to disputes that are as fair as possible. That’s because the decisions come from a multi-party consensus process, and are not based on one person’s decision!
Incentives to Participate
Why would users participate as jurors? Well, when creating a transaction dispute within Kleros, the buyer and seller have to set aside tokens. These funds go to the jury, providing an economic incentive for users to take the time to participate. On Ink Protocol, this is implemented as the mediation fee.
Not only are users economically encouraged to participate however, they are also economically encouraged to participate honestly. The Kleros protocol builds upon the SchellingCoin mechanism — a protocol once suggested by Ethereum founder Vitalik Buterin for use as a decentralized court — that explores the work of Game Theorist Thomas Schelling. The basis of the mechanism is that users vote anonymously and an overall consensus opinion is formed. With the jury all examining the same evidence, an informed and majority opinion should be both comprehensive and fair. Voters who were among the majority receive a greater financial reward, whilst those who voted against the majority opinion lose a small amount. In this way the system incentivizes fair participation, whilst at the same time disincentivizing users from malicious or lazy adjudicating. Both the buyer and seller can appeal the decision, taking the dispute to a larger jury if they disagree with the verdict.
Wrapping Up
Kleros provides a fast, inexpensive, reliable and decentralized dispute resolution mechanism. It’s a fantastic asset to the Ink Protocol and will bring fair mediation to online transactions that can happen anywhere, even outside of large marketplaces like Listia or eBay. Working with Kleros will help us to bring fair mediation to the world of decentralized peer-to-peer transactions and marketplaces. This is something that previously only existed within large, centralized marketplaces.
To learn more about Kleros visit: www.kleros.io
Or join their Telegram community directly at: https://t.me/kleros
If you would like to explore becoming a jury member, do reach out to them directly! We hope to get the entire Ink protocol community involved in different aspects of Ink soon, and this is just the beginning.
