Kleros - Decentralized Court System
Discussion
Vitalik Buterin:
"The "decentralized court" system Kleros is a really valuable and important piece of infrastructure for the Ethereum ecosystem: Proof of Humanity uses it, various "smart contract bug insurance" products use it, and many other projects plug into it as some kind of "adjudication of last resort".
Recently, there have been some public concerns about whether or not the platform's decision-making is fair. Some participants have made cases, trying to claim a payout from decentralized smart contract insurance platforms that they argue they deserve. Perhaps the most famous of these cases is Mizu's report on case #1170. The case blew up from being a minor language intepretation dispute into a broader scandal because of the accusation that insiders to Kleros itself were making a coordinated effort to throw a large number of tokens to pushing the decision in the direction they wanted. A participant to the debate writes:
The incentives-based decision-making process of the court ... is by all appearances being corrupted by a single dev with a very large (25%) stake in the courts.
Of course, this is but one side of one issue in a broader debate, and it's up to the Kleros community to figure out who is right or wrong and how to respond. But zooming out from the question of this individual case, what is important here is the the extent to which the entire value proposition of something like Kleros depends on it being able to convince the public that it is strongly protected against this kind of centralized manipulation. For something like Kleros to be trusted, it seems necessary that there should not be a single individual with a 25% stake in a high-level court. Whether through a more widely distributed token supply, or through more use of non-token-driven governance, a more credibly decentralized form of governance could help Kleros avoid such concerns entirely."