Kleros is a decentralized arbitration protocol built on blockchain technology, designed to resolve disputes fairly and transparently through a crowd-sourced network of jurors. It functions as an on-chain court system for smart contract disputes, e-commerce disagreements, or content moderation issues within decentralized applications. Its purpose is to provide objective conflict resolution.
Mechanism
The mechanism involves parties submitting disputes to Kleros, where jurors stake a native token (PNK) to be selected for a case. Jurors review evidence and vote, with their incentives aligned by game theory: honest votes matching the majority are rewarded, while dissenting votes are penalized. Appeals escalate to larger pools of jurors until a clear consensus or economic threshold is met.
Methodology
The methodology centers on Schelling point coordination, where jurors converge on a correct judgment to maximize their economic gain, leading to an emergent consensus. For crypto systems architects, integrating Kleros means designing smart contracts with an arbitration clause that references the protocol, allowing for external, decentralized resolution of ambiguities or failures without relying on centralized legal systems. This creates a censorship-resistant dispute layer.
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