Decentralized Justice as a Service: the User Perspective

Frequently Asked Questions about the Kleros Protocol

By Federico Ast and Clément Lesaege

In a previous post, we answered some frequently asked questions about the technical aspects of Kleros. Now let’s focus on the business and practical side of implementation.

QUESTION. How do I implement Kleros for dispute resolution in my platform?

Imagine Alice is the owner of an e-commerce platform. Many disputes happen between users and currently she doesn’t have an arbitration procedure. This results in customer insatisfaction, lack of trust and loss of revenue. How can she connect her system with Kleros?

She needs to create an extra step in the purchase flow in her platform. Whenever two users make a transaction, they can choose Kleros as adjudication provider. The mechanism is similar to OpenBazaar’s moderated payments. In this scheme, the buyer sends the payment into a smart contract. If there is no dispute (which is likely to happen in most cases) the good is delivered and funds are released. If there is a dispute, Kleros’ jury will decide what the smart contract will do with the funds: send them back to both parties? Send them to one party?

In this screen, users would have the possibility to select a moderator for their transaction.

QUESTION. “What’s the cost of adjudicating a dispute in Kleros?”

In centralized companies such as Facebook or Google, prices are defined by a management decision. In a decentralized organization such as Kleros, pricing decisions are made by the token holders. Users decide arbitration fees on a subcourt by subcourt basis. Fees may range from a few pennies to thousands of dollars, depending on the type of expertise required to adjudicate a dispute. Simple disputes which can be solved fast and do not require specific skills will have low fees. Complex disputes that require highly specialized skills and more time for analysis will have high arbitration fees.

At this early stage of the project, it’s hard to predict the average cost per dispute adjudicated. As more people start to use the protocol, arbitration fees will become clear for different types of disputes.

How Kleros works.

QUESTION. “What is Kleros’ commission?

Kleros does not take a fee on transactions. All funds deposited by parties are used to pay the arbitration fees of jurors. If there is no dispute, there is no fee to be paid. As the Kleros ecosystem matures, new financing models may arise. For example, smart contracts that take a fee on every transaction and, in exchange, pay the arbitration fees when a dispute arises.

QUESTION. “How can I create the subcourts I need for adjudicating the user disputes in my platform?”

The first thing you need to do is to find out if a subcourt already exists for your need. If that subcourt exists, you should use it. If you need to solve a very specific type of dispute, you may find that no subcourt was created for it yet. Imagine you had to adjudicate disputes in trading baseball cards from the 1920s. In this case, you could propose the creation of a subcourt called E-Commerce/Baseball Cards/1920s. The Kleros team and members of the community can assist you with subcourt creation.

Babe Ruth, the Great Bambino, in a 1927 card.

QUESTION. “If Kleros is successful, demand of pinakion (the protocol token) will rise, right? If the price goes up a lot, will it still be economically viable to use Kleros for dispute resolution?”

Pinakion are divisible up to 18 decimals. If the price goes up, jurors will just activate smaller fractions of pinakion for the same type of dispute. The protocol will still work as intended regardless of what happens with the price of pinakion.

QUESTION. “I don’t want users leave my website for solving disputes. Can I implement Kleros while keep using my front-end?”

Absolutely. Your front-end can directly interact with Kleros smart contracts. Our API will help you do this without you needing a high level of blockchain expertise. You will only need a javascript developer. If you want to use Kleros API and need help please contact us.

QUESTION. “Do I need to buy pinakion to use Kleros?”

No, only users wishing to be drawn as jurors need to buy pinakion. Neither customers nor parties need to buy pinakion. They don’t even need to know what a pinakion is.

QUESTION. “Do I need to know game theory or cryptography in order to use Kleros?”

Of course not. You don’t need to know how TCP/IP works to use the Internet. Neither you need to know about game theory or cryptography to use Kleros. However, if you’re interested in knowing more about the technologies behind Kleros, we highly recommend The Strategy of Conflict where Thomas Schelling introduces his concept of focal point, The Political Potential of Sortition by Peter Stone, about the use of random selection in civic affairs, and Digital Justice, by Ethan Katsch and Orna Rabinovich-Einy, about disputes in the online world. And, of course, an introduction to blockchain technology. A good place to start is Coursera’s Bitcoin and Cryptocurrency course.

Digital Justice, the “bible” of dispute resolution in the Internet Age.

QUESTION. “We’re not a blockchain company nor do we want to become one. We don’t take payments in crypto and don’t know how smart contracts work. We just need Kleros to solve disputes. Can you do that?”

The vision of Kleros is to democratize justice for all, not just for participants of the blockchain industry. Our goal is to make your work easier, not harder. Customers will pay in fiat currency and won’t need to deal with smart contracts. All the “blockchain magic” will happen in the back-end without you or your users even noticing.

That said, at this early stage, implementation still has some rough edges. If you want to use Kleros, send us a message and we will help you.

As the ecosystem matures, we expect many companies to start building on top of the Kleros protocol and offer customized arbitration services for a wide range of industries (we will write a post on the ecosystem quite soon). Some will involve the customer paying a flat or variable fee to a provider. From the point of view of customers, it will not be different than hiring any other supplier. Different arrangements will be created to provide justice as a service.

Federico Ast. Co-Founder and CEO of Kleros.

Clément Lesaege. Co-Founder and CTO of Kleros.

Want to know more about Kleros? Have more questions?

Read this long conceptual paper. For an abridged version, see here. For a short technical white paper, see here. There are different ways for you to contribute to the justice revolution. Are you a coder? Take a look at our Github. We are also actively seeking for pilot opportunities. If you think you can help with this, please send us a message from our website. If you want to join the community, come to this Slack.

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