Kleros recently announced their integration with realit.io, which allows their platform to be selected as an arbitrator on Omen, the decentralized prediction market. As a result of this integration the Kleros platform has received an influx of activity and the PNK token has increased in price.
Recently a very interesting case has shown up on Omen with Kleros as the arbitrator and it has brought on a wave of questions and controversy. We’re currently awaiting the resolution of the case, which will be arbitrated by the Kleros platform, and the result could well have a huge impact on decentralized arbitration as a whole.
The question is very straightforward, but that’s part of the problem. Here’s what people have been betting on using Omen:
Will there be a day with at least 1000 reported Corona death in the US in the first 14 days of July?
The options are ‘Yes’ or ‘No’. Overall this prediction market accrued 6,177 DAI and more than 35 ETH to be split between 500 jurors in Kleros’ general court. At the time of closing 85% of voters had voted no.
What’s the problem?
Most of the debate about this prediction market revolves around the information supplied by the original poster, or lack thereof. The question is very simple, but it doesn’t include any information on how one should gauge the result.
Reporting statistics on topics like this often differ between sources, and the effect is amplified with Corona Virus death reporting. You’ll find a lot of discrepancy between sources that are deemed as credible. That’s where the problem arises – how are the arbitrators supposed to decide whether there was a day with 1,000+ deaths in the US from Corona Virus when the sources are telling them different things? In fact, the question just says ‘at least 1000 reported Corona death’ – could a report from someone’s Aunt on Facebook meet this standard?
‘Yes’ voters appear to be arguing that if a reliable source provides a report that says there were more than 1,000 deaths then the result should be ruled as yes. Naturally, ‘No’ voters would be extremely unhappy if this was the case, because they have also got sources that are deemed credible that report all the days in question as having death rates under 1,000.
Here lies the first problem – the question wasn’t specific enough. The poster could have included a source, or a list of sources, that the arbitrators should use to make a judgement. Instead, arbitrators and voters alike are left in the dark. Each person is, in a way, left to find their own interpretation of the results available. The ultimate result will still be decentralized consensus, but the losing side may well feel cheated. If the question was more clear to start this wouldn’t have been a problem.
Not to mention the fact that it’s extremely tough to reach an agreement on which news sources are credible. There are suggestions to take results from multiple sources and then weight their statistics based on credibility. But who determines the weighting? There are a lot of questions that will be answered when this case is resolved.
What’s the solution?
This ends up being another debate. Omen can have more rules for questions, which could technically prevent this case, but the more rules that are in place the more restrictive the prediction markets become. Many believe that market creation should be kept as simple as possible, thus this process is a fine balancing act.
There have been new rules proposed that would have prevented this issue:
If the market doesn’t mention a specific source, the most credible outcome should be reported. In order to determine the credibility of an outcome, the quantity of sources and their credibility are to be taken into account. Credibility of sources and of outcomes should be assessed according to facts, not unproven beliefs.
A rule like this would certainly relive some of the questions, but still leaves the question about which sources can be quantified as being more credible than others.
Awaiting the result
This case is going to be ruled upon by 500 randomly allocated jurors in Kleros general court. It’s going to be one to watch, since it’s not clear how the hive mind will come together and reach a decision whilst also providing an important precedent for future cases.
Overall, it’s a great opportunity for Kleros to increase the value of their platform. The case has caught some attention over on daotalk and it seems many are watching for the final verdict. We certainly are.
The Daily Chain
*This article has been sponsored. The Daily Chain encourages you to carry out your own research before you make any form of investment and educate yourself about how to stay safe in the crypto space.
