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Kleros, a Protocol for a Decentralized Justice System

Building a Judicial System for the Internet Age

Federico Ast
Sep 11, 2017 · 36 min read

“Whoever controls the courts, controls the state”. Aristotle.

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The Acropolis at Athens (1846) by Leo von Klenze. Oil on canvas, 103 x 148 cm. Neue Pinakothek, Munich.

What the Greek Knew About Justice

P (VERDICT IS TRUE) = F (JURY, EVIDENCE, PROCEDURE)

How to design a system that produces true decisions at the lowest possible cost and in the shortest amount of time?

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A pinakion. The token that Athenians used to be drawn as jurors in popular trials.
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The Kleroterion. The allotment machine used in Ancient Athens to randomly select jurors for trials.
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An icosahedron dice (20 faces made of equilateral triangles) such as the ones Athenians used in the kleroterion for random juror selection.

A simple website dispute

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The technology behind Kleros

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Thomas Schelling (left), receiving the Nobel Prize in Economics 2005 from the King of Sweden, for “having enhanced our understanding of conflict and cooperation through game-theory analysis”.
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Payoff of the Schelling Coin mechanism in the rain in Paris example.

The Kleros Adjudication Process

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The Kleros subcourt system ressembles a tree with a root and branches. The root is a General Court, from where a number of branches (subcourts) are born. Each subcourt adjudicates a specific kind of dispute.
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Model 1: Deposit and refund. The total cost of the dispute is $100. The contract stipulates that both parties will make a deposit when the case goes to arbitration and that the winner will get a refund. Jurors vote Alice as winner. Money deposited by the loser is used to pay arbitration fees. Alice is reimbursed.
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Model 2. Both Parties Pay. The contract stipulates that both parties will share the cost of arbitration and that no party will get a refund, regardless of who wins.
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An example of paths chosen by jurors in the subcourt system. Clément can be drawn as juror in the General Court and in the Insurance Subcourt. Chief can be drawn as juror in the General Court, in the E-Commerce Subcourt and in the Freelancing Subcourt.
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Example of tokens activated and drawn jury members. For simplicity, we are assuming that only 6 token holders exist. In practice, there will be many more. It will be extremely unlikely that a token holder will be drawn more than once for any specific dispute.
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Example of votes for the freelancer example.

Arbitration_fee*Number_Jurors.

Arbitration_Fee*7

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The cost of appeal increases steeply instance after instance.
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The Kleros adjudication process.
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Token redistribution after the vote with seven jurors. Tokens are redistributed from jurors who voted incoherently to jurors who voted coherently.

Incentives Design: the Combined Effect of Arbitration Fees and Token Redistribution

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Bob, the loser in the dispute against Alice loses his 100$ deposit, which is used to pay arbitration fees to all jurors. Ignasi and Julio, the two jurors that voted incoherently with the rest, lose their pinakion, which are transferred to the jurors who voted coherently. Daniel, Ezequiel, Frédéric, Gabriela and Hadass, the jurors who voted coherently, experience an economic gain in fees and tokens. Ignasi and Julio, the jurors who voted incoherently, earn arbitration fees but lose pinakion.

Parameters of the Subcourt System

Governance

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Kleros: a Multi-Purpose Adjudication Protocol

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Cleisthenes, the father of Greek democracy. After leading a rebellion against aristocratic rule, Cleisthenes implemented a package of political reforms that decentralized power in Athens. Cleisthenes’ life after his reforms is unknown as no ancient texts mention him thereafter. Some historians believe that he went on a self-imposed exile. He created a new civic technology and gave it to the people. For his deeds, some dub Cleisthenes the ancient Satoshi Nakamoto.

A Justice System for the Decentralized Internet

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A kleroterion with some pinakion inserted in the slots.
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Kleros will become the standard adjudication network for the decentralized Internet. Different subcourts will handle disputes coming from these different DAOs.

Conclusion

The Authors

Footnotes

References

Kleros

The Justice Protocol.

Federico Ast

Written by

Ph.D. Blockchain & Legaltech Entrepreneur. Singularity University Alumnus. Founder at Kleros. Building the Future of Law. @federicoast / federicoast.com

Kleros

Kleros

The Justice Protocol. A Dispute Resolution Layer for the decentralized age

Federico Ast

Written by

Ph.D. Blockchain & Legaltech Entrepreneur. Singularity University Alumnus. Founder at Kleros. Building the Future of Law. @federicoast / federicoast.com

Kleros

Kleros

The Justice Protocol. A Dispute Resolution Layer for the decentralized age

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