Kleros: A Socio-Legal Case Study Of Decentralized Justice & Blockchain Arbitration

51 Pages Posted: 1 Dec 2021

See all articles by Luis Bergolla

Luis Bergolla

Stanford Law School

Karen Seif

University of California, Berkeley - School of Law

Can Eken

The Chinese University of Hong Kong, Faculty of Law

Date Written: July 30, 2021

Abstract

Kleros—a decentralized blockchain-based arbitration solution that relies on smart contracts and crowdsourced jurors—was conceived to bridge the trust gap that separates e-commerce participants, as in the paradigmatic example of “Alice and Bob.” Previous studies have mainly focused on describing blockchain-based arbitration solutions such as Kleros, and at least one has warned about the potential risks to essential procedural safeguards presented by anonymous and economically-incentivized jurors. Using Kleros as a socio-legal case study of a token-based business providing cutting-edge decentralized blockchain arbitration services, we paint the “big picture” of how Kleros works, and analyze its efficacy to improve on traditional online dispute resolution. We also report the results of our exploratory, observational user survey and a series of interface trials. We make a number of contributions to the literature. First, our case study introduces the concept of the “decentralized sheriff,” which we use to refer to the crowd-based compliance mechanism implemented by Kleros to certify crypto tokens. We argue that Kleros’ “decentralized sheriff” contributes to the public good by filling a regulatory hole with respect to the crypto market. Second, building on the work of scholars who studied Kleros, we analyze the major obstacles to widespread adoption of Kleros. Third, we explore whether social interactions of trust and claiming present unique characteristics under Kleros compared to models described in Law and Society literature. Throughout our analysis, we formulate questions for future research and investigation.

Keywords: Blockchain, arbitration, online dispute resolution

Suggested Citation

Bergolla, Luis and Seif, Karen and Eken, Can, Kleros: A Socio-Legal Case Study Of Decentralized Justice & Blockchain Arbitration (July 30, 2021). 37 Ohio St. J. on Disp. Resol. 1 (Forthcoming October 2021)., Available at SSRN: https://ssrn.com/abstract=3918485 or http://dx.doi.org/10.2139/ssrn.3918485

Luis Bergolla (Contact Author)

Stanford Law School ( email )

559 Nathan Abbott Way
Stanford, CA 94305-8610
United States
+12022859787 (Phone)

HOME PAGE: http://https://law.stanford.edu/directory/luis-bergolla/#slsnav-publications

Karen Seif

University of California, Berkeley - School of Law ( email )

215 Boalt Hall
Berkeley, CA 94720-7200
United States

Can Eken

The Chinese University of Hong Kong, Faculty of Law ( email )

53485971 (Phone)

HOME PAGE: http://https://www.law.cuhk.edu.hk/app/people/can-eken/

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