What is Kleros (PNK)?

Deep Dive

1. Purpose & Value Proposition

Kleros addresses the trust gap in digital transactions by offering neutral arbitration when parties disagree. Unlike centralized courts, it uses cryptoeconomic incentives – jurors stake PNK tokens to vote on cases, earning ETH rewards for correct rulings while losing stake for poor decisions (CoinMarketCap). This creates a self-sustaining system for resolving escrow disputes, oracle inaccuracies, and content moderation conflicts across 15+ use cases.

2. Technology & Architecture

Built on Ethereum, Kleros uses layered smart contracts to manage case workflows:
- Selection algorithm prioritizes jurors with higher PNK stakes
- Appeal system allows challenging outcomes through successive jury rounds
- Subcourt system specializes in domains like DeFi or intellectual property

The protocol has processed 1,662+ cases since 2018, with jurors collectively earning 407 ETH (≈$1.2M at current prices) for participation (Kleros.io).

3. Tokenomics & Governance

The fixed-supply PNK token (805M max) serves three functions:
1. Staking – Increases juror selection probability
2. Skin-in-the-game – Penalizes bad rulings via token slashing
3. Governance – Guides protocol upgrades through decentralized voting

Jurors balance ETH rewards against PNK stake risks, creating alignment between decision quality and economic incentives.

Conclusion

Kleros reimagines dispute resolution as a public good powered by game theory and decentralized participation – could its model become the standard arbitration layer for Web3 ecosystems?