What Is Kleros (PNK)?

What Is Kleros (PNK)? Complete Guide Review About Kleros.

What Is Kleros (PNK)?

The world is experiencing an accelerated pace of globalization and digitalization. An exponentially growing number of transactions are being conducted online between people across jurisdictional boundaries. If the blockchain promise comes to a reality, in a not so distant future, most goods, labor and capital will be allocated through decentralized global platforms. Disputes will certainly arise.

Users of decentralized eBay will claim that sellers failed to send the goods as specified in the agreement, guests in decentralized Kleros will claim that the rented house was not “as shown in the pictures” and backers in a crowdfunding platform will claim a refund as teams fail to deliver the promised results.

Smart contracts are smart enough to automatically execute as programmed, but not to render subjective judgments or to include elements from outside the blockchain. Existing dispute resolution technologies are too slow, too expensive and too unreliable for a decentralized global economy operating in real time. A fast, inexpensive, transparent, reliable and decentralized dispute resolution mechanism that renders ultimate judgments about the enforceability of smart contracts is a key institution for the blockchain era.

Kleros Storage Key Points

Coin BasicInformation
Coin NameKleros
Short NamePNK
Circulating Supply622,509,252.94 PNK
Total Supply764,626,704
Source CodeClick Here To View Source Code
ExplorersClick Here To View Explorers
Twitter PageClick Here To Visit Twitter Group
WhitepaperClick Here To View
Official Project WebsiteClick Here To Visit Project Website

Schelling Coin Mechanism

Game theorist Thomas Schelling developed the concept of Schelling Point (also known as Focal Points) (25) as a solution that people tend to use to coordinate their behavior in the absence of communication, because it seems natural or relevant to them. Schelling illustrated the concept with the following example: “Tomorrow you have to meet a stranger in NYC. Where and when do you meet him?”.

Kleros While any place and time in the city could be a solution, the most common answer is “noon at the information booth at Grand Central Terminal”. There is nothing that makes noon at Grand Central Terminal a location with a higher payoff (any other place and time would be good, provided that both agents coordinate there), but its tradition as a meeting place makes it a natural focal point.

A Use Case

Thousands of miles away, in Nairobi, Chief is a software developer. In his “dead time” on the bus commuting to his job, he is checking Kleros Court website (court.kleros.io) to find some arbitration work. He makes a couple thousand dollars a year on the side of his primary job by serving as a juror in software development disputes between freelancers and their clients.

He usually rules cases in the Website Quality sub court. This court requires skills in html, java script and web design to solve disputes between freelancers and their customers. Chief stakes 2000 PNK, the token used by to select jurors for disputes. The more tokens he stakes, the more likely is that he will be selected as juror.

Arbitrated Contracts

Kleros is an opt-in court system. Smart contracts have to designate Kleros as their arbitrator. When they opt-in, contracts creators choose how many jurors and which court will rule their contract in case a dispute occurs. The idea is that they will choose a type of court specialized in the topic of the contract. A software development contract will choose a software development court, an insurance contract will select an insurance court, etc.

Figure 2 shows an example of the court arbors scence from which users can choose. The Kleros team has developed a number of standard contracts using Kleros as a dispute resolution mechanism. Moreover, they have proposed standards (21) (27) that would allow others to develop other contracts in a way that does not require anticipating which dispute resolution mechanism will ultimately be used.

System token the pinakion (PNK)

Users have an economic interest in serving as jurors in Kleros collecting arbitration fees in exchange for their work. Candidates self-select to serve as jurors using a token called pinakion (PNK)2. The probability of being drawn as a juror for a specific dispute is proportional to the amount of tokens a juror stakes. The higher the amount of tokens he stakes, the higher the probability that he will be drawn as juror. Jurors that do not stake PNK do not have the chance of being drawn.

This prevents inactive jurors from being selected. PNK plays two key functions in Kleros design. First, it protects the system against the sybil attack (14). If jurors were simply drawn randomly, a malicious party could create a high number of addresses to be drawn a high number of times in each dispute. By being drawn more times than all honest jurors, the malicious party would control the system.