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Kleros

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Discover Kleros's fundamentals and latest news.

This content was generated by Whalee (BETA), an AI crypto assitant that analyses cryptocurrencies. Informations can be incomplete and/or erroneous. Please always double check and DYOR.

What is Kleros?

Kleros (PNK) is a decentralized arbitration service built on Ethereum, providing a dispute resolution platform for the new economy. It utilizes blockchain technology and smart contracts to facilitate arbitration, relying on crowdsourced jurors incentivized by the PNK token. The platform allows users to resolve disputes in a decentralized manner, with jurors earning fees in ETH and PNK for their participation. The value of PNK is tied to the demand for the platform, making it an attractive investment opportunity for those interested in decentralized justice and dispute resolution.

How is Kleros used?

The Kleros (PNK) token is a utility token used in the decentralized dispute resolution platform, Kleros. It serves several key purposes:

  1. Staking and Juror Selection: PNK holders can stake their tokens to participate in the juror selection process. The more PNK staked, the higher the chance of being selected as a juror in disputes. This mechanism ensures that jurors have a vested interest in the outcome of the disputes they are involved in.

  2. Governance and Voting: PNK tokens are used for voting in platform governance decisions, such as proposing new courts or parameters. This allows PNK holders to have a say in the direction and development of the Kleros platform.

  3. Protection Against 51% Attacks: The use of PNK tokens as a native token helps protect the platform against Sybil attacks. An attacker would need to acquire a majority of the PNK tokens to manipulate the juror selection process, which is economically unfeasible.

  1. Incentives and Rewards: Jurors who participate in disputes and make decisions receive arbitration fees in ETH. Additionally, jurors who make minority decisions lose some of their PNK tokens, which are then redistributed to the majority jurors. This incentivizes jurors to make fair and accurate decisions.

  2. Forkability: In the event of a successful 51% attack, the community can fork the system, removing the attacker's holdings and allowing the platform to continue functioning. This is only possible because of the native PNK token.

Overall, the PNK token is essential to the functioning and security of the Kleros dispute resolution platform, providing a decentralized and incentivized system for resolving disputes in the blockchain ecosystem.

How do I store Kleros?

To store Kleros (PNK) tokens, you have several options based on your needs and preferences:

  1. Store on an Exchange:

    • Hold your PNK on an exchange for convenient access to investment products and features like spot and futures trading, staking, lending, and more. Ensure the exchange has strict security measures to protect your assets.
  2. Non-Custodial Wallets:

    • Withdraw your PNK to a non-custodial wallet for complete control over your private keys. This option includes hardware wallets, Web3 wallets, or paper wallets. Keep your private keys secure to avoid losing your PNK.
  3. Buy via a Crypto Wallet:

  • Use a crypto wallet that supports PNK to purchase the token directly. Ensure the wallet is reliable and reputable, and follow the steps to create a wallet address, buy PNK, and manage your assets securely.
  1. Decentralized Exchange (DEX):
    • Buy PNK on a DEX for more privacy, as it connects you directly with sellers without intermediaries. Be aware of the fees and security measures when using a DEX.

Remember to choose the method that best fits your needs and security concerns.

How to buy Kleros?

To buy Kleros (PNK) tokens, you can follow these steps:

  1. Choose a Platform: You can purchase PNK tokens through various platforms such as ChangeNOW, KuCoin, or decentralized exchanges like Uniswap.

  2. Select a Wallet: Ensure you have a compatible crypto wallet like MetaMask or KuCoin Wallet to store and manage your PNK tokens.

  3. Buy or Swap: You can either buy PNK directly using a supported payment method or swap other cryptocurrencies like USDT for PNK on a decentralized exchange.

  1. Confirm Purchase: Preview the transaction details and confirm your purchase to complete the process.

Remember to check the fees and security measures of the chosen platform before making a purchase.

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History of Kleros

Kleros, a decentralized dispute resolution protocol, was founded in 2017 by Clément and Susanne, pioneers in decentralized governance. The project aimed to create a critical dispute resolution layer that would work across all of Web3, solving claims arising from subjectivity. This vision was to provide "justice as a service" for the decentralized internet, allowing any decentralized application (dapp) to "plug in" and send cases for transparent decision-making.

In July 2018, Kleros conducted a public token sale using the Interactive Coin Offering mechanism suggested by Vitalik Buterin. This marked the beginning of the Kleros token, PNK. The first version of Kleros launched on the Ethereum mainnet in July 2018 with a pilot called "Doges on Trial," which implemented the "decentralized sheriff mechanism." This allowed users to challenge non-compliant submissions, which would then go to dispute resolution in Kleros.

In March 2019, the Kleros Athena release was launched, significantly improving user friendliness and ease of integration. This version, known as Kleros V1, was built with the tools and infrastructure available in the nascent Ethereum ecosystem. However, it had limitations such as high gas fees for lower-value claims and a lack of an on-chain identity system.

Kleros continued to evolve, with a focus on research in cryptoeconomics to make the platform more efficient, secure, and flexible. This included implementing ideas from social choice theory, mechanisms to improve the flow of information, and more efficient methods for defining court parameters. The research program was directed by William George.

In 2023, Kleros 2.0 was launched, addressing the limitations of the previous version. This new version made it easier to coordinate and execute forks, reducing the payoffs of attacks on disputes or the platform. Kleros 2.0 also introduced cross-chain functionality, expanding its reach beyond Ethereum L1.

Throughout its history, Kleros has been driven by the vision of decentralized justice, using blockchain technology to support arbitration mechanisms and relying on anonymous, economically incentivized juries. The project has grown significantly, with its business model based on the tokenization of its crowd-sourced decision-making platform. The value of the PNK token is tied to the attractiveness and competitiveness of the dispute resolution platform, which generates a significant caseload and encourages participation from PNK holders.

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How Kleros works

Kleros (PNK) is a decentralized arbitration service that uses blockchain technology to resolve disputes in the new economy. Here's how it works:

Token Overview

PNK is an ERC-20 token based on Ethereum, with a fixed supply of 1 billion units. It is a utility token that cannot be replaced by ether. The token plays a crucial role in the Kleros ecosystem, serving multiple purposes:

  1. Staking and Juror Selection: PNK is used to stake and participate in the juror selection process. Users who stake PNK have a chance to be selected as jurors in disputes, with the probability of selection proportional to the amount of tokens staked. This ensures that only active and committed users are chosen as jurors.

  2. Governance and Voting: PNK holders have voting rights in governance decisions, allowing them to participate in shaping the direction of the Kleros platform.

  3. Protection Against Sybil Attacks: The use of PNK as a native token helps protect against Sybil attacks, where malicious parties create multiple addresses to manipulate the system. An attacker would need to acquire a significant portion of the total PNK tokens to successfully execute such an attack.

Dispute Resolution Process

Here's how the dispute resolution process works on Kleros:

  1. Dispute Registration: Parties to a dispute can unilaterally apply for arbitration via Kleros.

  2. Juror Selection: Jurors are selected from among PNK token holders who have staked their tokens in the relevant court. The selection is random, with the probability of selection based on the amount of tokens staked.

  3. Arbitration Fees: Arbitration fees are paid in ETH and are distributed to all arbitrators. Jurors who make a minority decision lose part of their staked PNK tokens, which are then redistributed to the majority jurors.

  1. Appeal Procedure: An appeal procedure is also available, which involves additional fees.
Economic Incentives

Kleros offers economic incentives to PNK holders to participate in the system:

  1. Arbitration Fees: Jurors earn ETH fees for their work in resolving disputes.

  2. Token Appreciation: As the Kleros platform grows and more disputes are resolved, the demand for PNK tokens increases, potentially leading to appreciation in their value.

Security and Forkability

In the event of a successful 51% attack, Kleros has a fallback defense mechanism. The community can fork the system, removing the attacker's holdings and creating a new version of PNK. This allows the community to recover from the attack and maintain the integrity of the platform.

Overall, Kleros (PNK) provides a decentralized and trustless dispute resolution service, leveraging blockchain technology and economic incentives to ensure fair and reliable arbitration.

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Kleros's strengths

The token Kleros (PNK) has several strengths that contribute to its potential success:

  1. Decentralized Dispute Resolution: Kleros offers a blockchain-based, decentralized arbitration system, providing fast, secure, and affordable dispute resolution for various applications. This unique service can attract a wide range of users, including decentralized applications (DApps) and traditional businesses.

  2. Utility Token: The PNK token is an ERC-20 utility token with a fixed supply of 1 billion units. It serves multiple purposes, including protecting the system against malicious actors, incentivizing jurors to adjudicate disputes honestly, and facilitating platform governance through voting.

  3. Economic Incentives: The token's design includes economic incentives for owners to participate in the arbitration process. Jurors can earn arbitration fees in ETH by making decisions, and those who make minority decisions lose part of their PNK tokens, which are then distributed to the majority jurors. This mechanism encourages honest and active participation.

  1. Technical Expertise: The Kleros team has demonstrated high technical skills, which is essential for the development and maintenance of a complex decentralized system. This expertise helps build trust in the project's ability to deliver on its promises.

  2. Community Engagement: Kleros has conducted various experiments and community experiences, such as the Doge List, to test its decentralized dispute resolution layer. These initiatives help build a community around the project and provide valuable feedback for improvement.

  3. Partnerships and Adoption: Kleros has established partnerships with other projects, such as Ethfinex, DeversiFi, and Gnosis DutchX, which can increase its adoption and expand its user base.

These strengths position Kleros as a promising project in the decentralized dispute resolution space, with a unique value proposition and a well-designed token economy.

Kleros's risks

Kleros (PNK) is considered a high-risk investment with a high potential reward. The financial risks associated with Kleros include:

  1. Volatility: The value of PNK tokens can fluctuate significantly, making it a high-risk investment. The token's price has varied from $0.006 to $0.4849 in the past, indicating significant price swings.

  2. Gas Fees: Kleros operates on the Ethereum blockchain, and high gas fees can make it expensive for users to interact with the platform. This can lead to reduced usage and negatively impact the token's value.

  3. 51% Attack Risk: The risk of an attacker acquiring 51% or more of the PNK tokens is a significant threat to the platform's viability. If such an attack were to occur, it could compromise the integrity of the decentralized dispute resolution system.

  1. No Burn Mechanism or Dividend: Unlike some other tokens, PNK does not have a mechanism to reduce the supply of tokens or distribute dividends to holders. This can make it difficult to maintain the token's value over time.

  2. Dependence on Ethereum: As Kleros is built on the Ethereum blockchain, any issues or limitations with Ethereum, such as high gas fees, can affect the performance and adoption of Kleros.

  3. Market Adoption: The success of Kleros depends on its ability to attract users and gain traction in the market. If the platform fails to gain significant adoption, the value of PNK tokens could decline.

Overall, investors should be aware of these financial risks and consider them carefully before investing in Kleros (PNK).

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Kleros's ecosystem

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Kleros’s team

  • Federico Ast: President of Kleros, involved in the project since its inception and has been instrumental in shaping its vision and direction.
  • Clément Lesaege: Co-founder of Kleros, worked with Federico Ast to develop the project, and has been involved in its early stages.
  • William George: Research director at Kleros, responsible for leading the research program in cryptoeconomics to improve the efficiency, security, and flexibility of the platform.

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