The Ethereum-Based Judicial System: Kleros

Kleros is a decentralized platform constructed based on Ethereum, as an intermediary conflict resolution system for smart contracts. The aim is to make the justice system for international and digital conflicts within to have a decentralized and cost-effective solution.

The Problem

The world is being taken over by digitization on a global level. With many remote workers, traders and freelancers operating internationally, there is a continuous increase in borderless transactions and contracts taking place every day. Blockchain is being applied to all fields like financial services, social networking, and healthcare solutions. When the borderless agreements and dealings occur in a blockchain platform, disputes are bound to arise. The decentralization within these blockchain-based platforms will lead to claims like the agreed terms were not met. The world is already equipping itself for the idea of a decentralized internet. With that, newer problems will arise, like e-commerce platform users could appeal about the bought product or the freelancing communities would involve failed projects or refund claims.

Smart contracts were offered as a solution to these issues. They are automated and programmed to execute the terms of conditions agreed upon by the parties involved. But there lies the problem: they are automatic. Many times, these incidents involve subjective judgments or require some factors from outside the network of blockchain. The technology that already exists for resolving such conflicts is quite time-consuming, too costly and sometimes unpredictable and thus unreliable for the real-time operating global market. So, there is a dire need for a fast, reliable, decentralized and cost-effective solution for resolving disputes that can be executed in real-time as an effective court system for enforcing the smart contracts.

The Solution

Kleros provided a solution for this as a decentralized platform. This platform is a decision protocol and can resolve several types of disputes within a multipurpose judicial system. It is built on Ethereum and functions as a third-party for all kinds of contracts, whether they are straightforward or highly complicated. The game-theoretical incentives are applied to a computerized system that forms the whole arbitration procedure. Kleros does not remain dependent on the morality of some people, rather takes a systematic approach to the sensitive process.

Kleros has based its system on the legal epistemology. The legal epistemology imparts that a court is basically created for flushing the truth out from some very perplexing pieces of evidence, acting as an epistemic mechanism. The whole procedure pans out as an agent monitors a process, in which an input can generate the output. The input related to all the clues or evidence that both the parties provide. The output is the decision that the jury takes after they observe all the evidence and put the pieces of the puzzle together to resolve the issue presented.

Kleros unites the fundamental knowledge from the court system with the crowdsourcing, game theory and the blockchain network technologies. Kleros has been successful in developing a judicial system that generates outcomes for the real world disputes within the digitized domain. With the human effort integrated within the programmed dispute resolution system, the decisions remain subjective and automated.