Introduction and Background

There has recently been a lot of discussion about the nature of Arbitration in EOS and the status of the EOS Core Arbitration Forum (ECAF). This post gives a retrospective of events over the past 5 weeks and presents the lessons that ECAF has learned.

The EOS MainNet launched a little over 5 weeks ago to a lot of fanfare. A default Constitution was put in place naming ECAF as the organisation to resolve disputes on the EOS blockchain according to its published Rules for Dispute Resolution (RDR). ECAF’s RDR which governs the way it makes rulings can be found here. However, the conversion of the EOS ERC-20 token to EOS MainNet token became a point of friction. Some Ethereum account holders fell prey to alleged phishing scams, others claimed to have lost their EOS private keys or even simply failed to register their ERC-20 tokens.

A very brief summary of the events that ensued immediately after: Claims were made to ECAF by 7 individuals to assist with accounts whose private keys had allegedly been compromised on the Ethereum network. To prevent imminent loss of funds, the 21 active Block Producers who were in office at that time unanimously elected to freeze the affected accounts on their own. As per procedure, the BPs subsequently filed a dispute against themselves seeking ECAF review of their action. Thereafter an Emergency Arbitrator was assigned to review this case, along with additional claims. The Emergency Arbitrator, upon review of the facts of those cases, ordered that the 7 accounts and a further 20 accounts be frozen pending further investigation. Most of those accounts are now in a blacklist and effectively frozen pending further action from ECAF.

Issues surfaced

Throughout this process, several issues surfaced. The most notable were as follows.

Inconsistent constitutional agreement

The EOS Constitution is not shown to users in a consistent way and hence it is difficult to establish that they have agreed to it.

Poor awareness of Arbitration's existence

Despite references in both White Papers and in nearly every outbound communication about the governance of the system, many in the Community were not aware of the existence of Arbitration and the powers accorded to the Arbitrators. This led to baseless fears that ECAF and its Arbitrators were wielding “arbitrary powers”. Compounding this was the perception that ECAF was/is a shadowy body with an unclear membership, a perception unfortunately fueled by ECAF’s lack of a public communications officer or budget.

Lack of on-chain communications

There is no on-chain based system for account to account communication. As such at launch the BPs and ECAF had not yet established their communications protocol. Rulings were thus not communicated in a consistent manner, leading BPs in some cases to question their source, and in other cases apparently not to receive them at all.

Lack of anticipation of the sensitivity around the potential for abuse of power

Although there are a multitude of checks and balances built into the system, ECAF failed to anticipate the sensitivity the Community would have to accusations, however baseless, of risks of abuse of power.

Lack of funding

A lack of pre-launch funding meant that ECAF was not able to put in some of the structures it needed for efficient operation.

Poor understanding of the Arbitration procedure

There is a broad lack of understanding of the detailed procedure.

1. cases are generally not public affairs.
2. the Emergency Arbitrator’s role is to set controls in motion quickly, in preparation for a later, more careful phase.

Areas for improvement

To address these points ECAF has identified the following key areas for improvement:

Forum transparency

1. ECAF will be modifying its website to ensure that its personnel are clear.
2. More visibility will be given to the Arbitrator nomination process. (We are still open for nominations by the way. Please see the criteria for Arbitrators and details of the nomination process here and here. Nominations are to be made via the following telegram channel https://t.me/EOSArbNominations).

On and Off-chain Communications

1. In the absence of an on-chain messaging system, an on-chain process for the communication of Arbitral notices and rulings has been adopted, details are here. All Future official notices, orders, rulings, etc. will be capable of being authenticated and recorded on-chain and delivered from the official ECAF EOS account: ecafofficial.
2. ECAF will be recruiting one or more volunteer Community Manager(s) to help with coordinating our off-chain, non-case-specific communications. Know someone who is interested? Let us know using the links at the end of this post.

Use of technology to enhance the Arbitration process

ECAF’s role is to provide the best support for the case file: storage of evidence and signalling of progress can be assisted by technology including blockchain DApps. ECAF is working with some members of the Community to build technology that will ease this.

Funding

ECAF is currently composed of predominantly unpaid volunteers. In order to allow ECAF to finish putting in place some of the necessary structure it needs, ECAF will commence charging for its services.

It will implement a 3 stage fee system comprised of the following elements:

1. Non-refundable filing fee: to be paid on submission of a case. This fee will be waived for the 27 frozen accounts.
2. Final admin fee: to be paid when the case is accepted and an Arbitrator assigned
3. Arbitrator fees: to be paid at the conclusion of the case and to compensate the Arbitrators and Case Managers for the time they have spent on the case
4. Fees are separate from the Bond that parties may be required to post as surety against potential judgments

Other points worth noting

Case transparency and the Presentation of evidence

1. The process in RDR is thus: In the Ruling, the Arbitrator will combine a presentation of Findings together with the logic of the rules or law. When confidentiality is required, the Arbitrator will explain why evidence is not made public.
2. Although the community treasures the approach of full transparency, this is simply not possible in dispute resolution. Some essential privacy and confidentiality must be maintained so that the Arbitrator can encourage the presentation of full evidence to reach the facts of the case.
3. In contrast, transparency of the case file is a valuable tool for oversight, community confidence and training.
4. Therefore the Arbitrator has to walk a fine line. The Arbitrator remains in control of what evidence is surfaced in every case - it is by its nature a subjective decision that can only be made with the very case in mind.

Arbitrators

A diverse pool of Arbitrators are required to deal with cases filed by non-English speaking individuals. Efforts to recruit Arbitrators and Case Managers with a variety of languages skills will continue

What next?

Status under the current Constitution

Under the current EOS Constitution ECAF has the mandate to resolve disputes relating to the blockchain and will continue to exercise this mandate.

Cases are processed by their Arbitrators according to the RDR.

This is the normal process, and is designed to ensure that all sides have a fair chance to present their case, so that the Arbitrator can produce a fair ruling that fits the case.

Frozen accounts

As of this time, multiple accounts have been frozen by duly issued orders from their assigned Emergency Arbitrators. The freezing of those accounts is not the end, but actually the starting point for the process to figure out who should be the rightful owner where multiple people seem to have a claim on it. Contrary to the public perception, these are complex cases to resolve as they involve multiple blockchains, including multiple smart contracts, as well as some websites and possible contracts established there. We believe that there is currently no other organisation, in, or outside EOS, that is setup to deal with the complexity of these issues.

ECAF accepts that communication with Claimants regarding their cases has been slow. Going forward ECAF commits to providing them with regular updates on their case status.

Arbitrator Ratification

Once the referendum contract is in place, ECAF will be seeking token holder ratification of its slate of arbitrators.

Alternative Constitutions

EOS is and always was intended to be a governed blockchain. For this purpose ECAF was set up to be the primary, default and base layer forum of dispute resolution. A new constitution, if ratified, could include alternative approaches such as there being many arbitration forums, or an absence of base layer arbitration.

As this is a highly charged and political proposal, ECAF will not formally comment on it but instead will allow the individuals within ECAF to debate.

Provider of Arbitration services

ECAF sees itself as being a full-stack provider of EOS Arbitration services, and will continue to provide either full or speciality services according to the mandate expressed in a blockchain Constitution or other contract. ECAF’s trained Arbitrators and Case Managers will be an excellent choice for dispute resolution services for DApp writers and communities throughout the EOS ecosystem.

Conclusion

Like any new organisation ECAF has experienced growing pains. We are learning and growing stronger as an organisation.

If you’d like to learn more or support ECAF’s work then you can:

• Join the discussion on Telegram at https://t.me/eosarb
• Nominate individuals for Case Manager and Arbitrator roles on Telegram at https://t.me/EOSArbNominations
• Lobby for ECAF to receive funding