The rise of globalization and the digital economy as a result of the connectivity that the Internet affords has created an entirely new digital realm that has surpassed modern geopolitical jurisdictions.
Kleros, is a decentralized application built on top of Ethereum, aims to provide the solution to the the inevitable disputes that will arise in this global digital medium through leveraging the power of blockchain and game theory mechanics.
This guide will teach you how and where to buy the Kleros PNK token and will also give more info about the project.
Where to Buy Kleros PNK
This section is our top picks of where and how to buy the Kleros PNK Crypto token. We chose these based on our experience of using them and considered fees, security, payment options and reputation.
Visit The Top Pick
eToro USA LLC; Investments are subject to market risk, including the possible loss of principal.
Bitfinex: A Trusted Exchange
Based in Hong Kong, Bitfinex is owned and operated by iFinex Inc - a financial services company that also owns Tether Limited, the issuer of the USDT stablecoin. The broker is popular for having one of the most liquid order books in the market, ensuring that users looking to buy and sell crypto have no trouble getting it done.
Like many other top brokers, Bitfinex offers a versatile platform for anyone looking to enter the crypto market. Investors can buy and trade crypto, stake cryptocurrencies, and lend their coins to earn returns.
Read: Our Full Bitfinex Review Here
Ease of use is impressive on Bitfinex, with the broker combining an intuitive platform with a low deposit threshold. Deposits on Bitfinex can be made through direct crypto transfers, wire transfers, and card payments. Card payments are processed through a third party, so investors might have to pay more fees.
Besides its trading interface, Bitfinex provides easy access to services like margin trading, derivatives offerings, and lending. Investors looking to make high-volume purchases can use Bitfinex’s OTC trading service, while those looking for low-risk gains can use the broker’s staking protocol.
Bitfinex uses a maker-taker fee structure for its trades. The fees range between 0% and 0.2%, with fees reducing as investors' order volumes increase. Also, the exchange doesn’t charge any fees for large orders through its OTC desk. Bank wires incur a 0.1% fee for deposits and withdrawals - although expedited withdrawals carry a charge of 1%. Crypto withdrawals incur a small fee, depending on the coin being withdrawn.
The exchange protects user funds and data using 2FA, advanced API key permissions, and the storage of 99% of funds in cold storage.
Pros
- Easy-to-use interface
- Impressive staking protocol for PoS coins
- Highly liquid order book
- High leverage for derivatives trading
- Unlimited withdrawals
Cons
- Higher costs for card transactions
Gate.io: Solid Platform With Lots of Coins
Gate.io is a cryptocurrency trading site that aims to offer its members an alternative to the exchanges currently dominating the market.
The site has been in operation since 2017 and aims to capture a portion of the cryptocurrency trading market by offering its users hassle free access to a number of hard to find coins and up and coming projects.
The site is also designed to help investors find specific information related to both their preferred coins and overall market trends.
Read: Our Full Gate.io Review Here
Trading mostly takes place on a web-based trading platform that is similar to most cryptocurrency exchanges. The site incorporates a number of functional features such as an order book, trading history, and charting.
Pros
- A wide range of currencies
- A low fee structure
- Simple registration process
- Functional platform with a mobile app available
Cons
- Unregulated
- The team is not very transparent
- No fiat currency transfers
How Does Kleros Work?
At its most basic level, Kleros connects users who need disputes settled with a crowdsourced pool of jurors who have the requisite skills to settle their disputes in a quick and affordable manner. The Kleros protocol is opt-in, meaning that users can implement Kleros as their dispute resolution protocol directly into their smart contracts.
For instance, a freelancer is hired by an employee, and the smart contract between them references Kleros as the adjudication protocol for their contract. Should a dispute arise, the funds are locked in the contract and the Kleros arbitration process begins. A tribunal is drawn from a pool of crowdsourced jurors, relevant information is sent to the jurors, and the jurors vote on the case. The vote is revealed, the majority is considered the winner and the smart contract is executed, sending funds to the party that the jurors voted in favor of.
It’s a very straightforward process that offers simplicity and convenience to users, however, there is much more working behind the scenes to make the platform secure and viable as a dispute resolution layer.
Specifically, the platform utilizes the blockchain to ensure transparency and integrity in the juror selection process. Additionally, game theory mechanics predicated on important concepts and their native Pinakion (PNK) token provide the necessary incentive model for jurors to act honestly within the system.
The incentive model of Kleros uses an optimized version of the Schelling Coin concept that is derived from the game theory concept of a Schelling Point. A Schelling Point is a focal point as a solution that people tend to use in the absence of communication because it seems natural or special to them. This is important in distributed systems where users do not trust each other. The Schelling Coin concept was laid out by Vitalik Buterin and is designed to be a token that aligns telling the truth with economic incentives.
In regards to Kleros, their platform employs an optimized version of this concept to incentivize jurors to vote coherently with others through economic incentive with their PNK token. Jurors who vote inchorently against the winning majority are penalized, and those that vote in the winning majority receive redistributed tokens from the jurors that did not. This redistribution is based on a proprietary formula and jurors must stake a set amount of tokens as a deposit prior to a case starting. Jurors also receive arbitration fees for their work.
Jurors self-select into subcourts with specific focuses as part of a larger autonomous pool of jurors serving a wide variety of potential cases. When selection for a case begins, a random process using sequential proof of work is used to select jurors from the pool. The probability of a juror being selected for a case directly correlates to how much PNK token they deposit. The contracts for a case specify how and what jurors can vote on as well as how many jurors are needed.
The entire process is automated and Kleros functions as an Ethereum autonomous organization. The need for sustainable security and scalability is paramount for the platform because of this. Game theory mechanics provide the necessary economic incentive while the design of the platform is to use a decentralized governance mechanism based on a liquid voting mechanism. This governance mechanism can be used for the following.
- Set policies of how to arbitrate disputes
- Add, remove, or modify sub courts
- Modify parameters in sub courts
- Change one of the smart contracts that Kleros relies on.
Appeals are also part of the functionality of Kleros and play an important role in mitigating against bribing while also mirroring important legal processes of current state governments. A party can appeal the Kleros ruling if they are not satisfied. Each new appeal has twice the number of original jurors plus one, so the appeal fees rise exponentially and deter users from endlessly appealing or bribing jurors because the cost is too high as more appeals are made.
Use Cases of Kleros
Kleros is designed to be a multipurpose dispute resolution platform and can function as a legal adjudication service in a wide variety of cases. Important types of cases include escrow dispute resolution, social network policy violations, and oracle resolutions.
For escrow disputes, this applies to a multitude of cases revolving around goods or services exchanged in off-chain mediums. Kleros can resolve disputes between employers and employees, rental agreements, or inadequate goods sold on an online store.
Social network policy violations include preventing spam and mitigating against policy violations by requiring users to make deposits before a case begins. Kleros can either directly resolve the dispute or if the context is more ambiguous, other options exist such as removing the content which can be specified directly in the smart contract.
Finally, oracles provide an interesting use case for decentralized data feeds to be used by smart contracts to pull information from the outside world. With Kleros, a party can submit a question and everyone can submit an answer with a deposit. If the answer is unanimous, then it is returned by the oracle, if not, Kleros dispute resolution ensues. The oracle then returns the solution decided on by the Kleros dispute resolution process.
Team and Partners
The team behind Kleros is led by co-founders Frederico Ast (CEO) and Clement Lesaege (CTO). Their token sale is currently live and is one of the first, if not the first Interactive Coin Offering as laid out by Vitalik Buterin, Jason Teutsch, and Christopher Brown as an improvement to the traditional ICO model.
Kleros has partnered with both Dether.io and Ink Protocol to help deliver on decentralized arbitration. Dether payment platform users will be able to use the Kleros peer to peer justice protocol to arbitrate disputes and Ink Protocol provides an important integration for Kleros to be able to test two key use cases for their platform, escrow and curated lists.
PNK Token and Interactive Coin Offering
The PNK token plays an integral role in the game theory dynamics of the Kleros platform. The amount deposited by jurors is directly correlated to the probability of them being selected for a case and it functions as the economic incentive for jurors to act honestly in cases.
Token holders also have voting power tied to the amount of PNK tokens that they hold, thus providing incentive to hold tokens for governance purposes. Jurors are also paid by case in the form of arbitration fees which are actually paid in ETH rather than PNK.
As mentioned earlier, Kleros is one of the first platforms to implement the Interactive Coin Offering format. Essentially, this format attempts to enable investors to have more information at their disposal while participating in a fluid bidding system governed by a smart contract. The success and results of this IICO will be fascinating to watch as well as to see if other platforms begin to use the same model.
Kleros Wallets
Software Wallet
Hot wallets, also called software wallets, are one of the most popular cryptocurrency storage options. They are always online, hence the affiliation with the ‘hot’ tag. Investors can easily get a hot wallet once they open an account with a crypto exchange. This allows them to store and manage their private keys, which prove their ownership of their assets to the blockchain network. Hot wallets are usually more convenient for everyday crypto transactions and can be custodial or non-custodial.
A custody wallet is responsible for storing assets to an exchange or a third-party platform. The user only places an order for a transfer or receipt, and the exchange signs off on the transaction, much like the traditional banking system. Meanwhile, a non-custodial or self-custody wallet gives the full responsibility to the end-user.
Hot wallets are usually free, but they are largely considered less secure due to their constant internet connectivity. An instance of a hot wallet is the Binance Wallet.
Hardware Wallet
A Hardware wallet is a device which has been created to provide an extra layer of security when interacting with your various cryptocurrency wallets.
Normally you would use your private key to move funds, the problem is though, if your computer has been compromised with malware or a virus, it is possible for your private keys to be captured and used to steal your funds.
With a hardware wallet, the private keys are stored on the device and never exposed to your computer, which means even if you are infected with such a program your private keys will remain safe. These options are safest way to store your crypto if you have more than a small amount.
Popular examples of cold storage offerings are the Ledger and Trezor line of hardware wallet solutions, read our reviews:
Mobile wallet
A mobile wallet is essentially a hot wallet on a smartphone device. They offer users an even more convenient way to use their coins for daily activities. Mobile wallets store and manage users' private keys while enabling them to pay for things they love with their digital assets.
These wallets are usually free and always online for transactions to be processed. Popular mobile wallets are eToro Money Wallet and Coinbase Wallet.
Desktop wallet
A desktop wallet is a PC version of a hot wallet. It is essentially software that an investor downloads into their personal computer or laptop for easy interaction with their digital coins. They also offer a browser extension which allows users to interact using an extension instead of downloading the entire software. Desktop wallets are also hack-prone due to their online nature. A popular example is the Exodus Wallet.
Paper Wallet
The paper wallet is arguably the oldest form of crypto wallet. They are no longer common in the modern crypto industry. It contains users' public and private keys. The paper wallet is the least secure type of wallet as it can easily be lost, stolen, or torched.
Conclusion
Kleros offers a dispute resolution protocol for the modern digital world that supersedes traditional jurisdictional areas as the world trends towards globalization. The potential of smart contracts to disrupt transactions and agreements between parties in an efficient and automated manner will inevitably lead to the need for a decentralized court system.
With the right incentive mechanisms enforced by proven game theory mechanics and the underlying blockchain providing the transparency and integrity needed, Kleros looks to become the justice protocol of the future.
