Kleros has just announced that their dispute resolution service will be integrated into Omen. If you’re not aware, Omen is a prediction market protocol and product built with Gnosis and developed and owned by dxDAO, a new kind of decentralized autonomous organisation. Furthermore, Kleros has been integrated as the final arbitrator through realit.io within the conditional token framework and can be selected as an arbitrator.
On top of this, a very large sum of GNO, the native token of Gnosis, has been placed under the arbitration of Kleros, lending further credence to their service.
There’s a lot to unpack here. To start, here’s a quick overview of what Kleros is.
What is Kleros?
Kleros is a dispute resolution protocol built using blockchain. By using crowdsourcing, clever economics and the native utility token PNK, Kleros is able to incentivize people around the world to pass judgement on cases and produce a fair outcome. The process is entirely decentralized and is designed to be fairer, easier, faster and cheaper than using a traditional court system. Furthermore, this protocol can be applied to any sort of case or arbitration problem, as we’re about to explore.
What is the dxDAO?
You may have heard of The DAO (Decentralized Autonomous Organization), which was a smart contract built to facilitate decentralized decision making. People put money in to get tokens that represented ownership, and in return they could vote on how the money would be spent. The idea was for the DAO to evaluate and ultimately fund business proposals in a decentralized manner. Sadly it all went wrong when a huge amount of ETH was irretrievably moved, which became a huge moment in Ethereum’s history.
The dxDAO is a new kind of DAO built for community governance of software protocols. It develops, governs and grows DeFi protocols and products. What’s different about dxDAO is that voting power is not pre-allocated. Instead there was an initialization period conducted for anyone that wanted voting power. You can observe the key differences between the two in this image.
Because of its set up, the dxDAO relies on the platforms incorporated into it. What Kleros brings to the table is an arbitration service that’s vital for some of the protocols within the dxDAO, one of which is the Gnosis conditional token framework.
Intro to Omen
Omen is a decentralized prediction market. It’s essentially a system that will aggregate available information to determine the expected outcome of an upcoming event. The market offers financial incentives to people who can correctly predict the outcome of an event, and a financial penalty to those that get it wrong.
Omen is slightly different to other blockchain prediction markets because it uses an automated market maker to match trades and pool liquidity, ensuring that the market always reflects the latest expert opinion about any topic.
With Omen anyone can create a prediction market for any topic, where they are able to specify the oracle that will resolve a market’s outcome. One oracle choice would be picking Kleros as an arbitrator.
The value of a prediction market is the aggregated information. It doesn’t only present the people’s assessment of the likelihood of an event’s outcome, it also presents their confidence level through the amount they are willing to stake.
The beauty of this system is that before blockchain only large financial institutions would have been able to launch something like this. But now it’s available to everyone to participate with low fees and executions are decentralized and backed by arbitrators like Kleros.
Let’s take a look at the wide variety of things that can be covered using Omen. There are categories for sports, politics, science, finance, business, crypto and much more. You can browse all the markets here.
The following prediction market is using Kleros as an arbitrator and is a simple yes or no – will Ethereum’s Berlin hardfork happen this year?
So far the results are close!
In this one there are three options, two specific ones and one general one. Again, Kleros is the final arbitrator of this particular prediction market.
First and foremost, now that Kleros is integrated as a final arbitrator through realit.io, it can be selected as an arbitrator for prediction markets created on Omen. This means that every time a new prediction market is created, the user has the option to use Kleros to arbitrate the process and outcome, which could drive a lot more activity to the Kleros ecosystem.
Furthermore, as part of this deal Kleros has been selected as the final arbitrator for something big – a 10,000 GNO grant, worth $200,000, from Gnosis to the dxDAO. This grant will be paid once the condition is met, which stipulates that at least $20 million worth of trading volume on the Gnosis Protocol is driven by orders created on interfaces controlled by dxDAO.
Finally, Kleros has also pledged 4 million PNK tokens to dxDAO under the following conditions:
What this partnership means for Kleros
This partnership is a great new opportunity for new activity to be brought to the Kleros ecosystem, but beyond that it also shows the name and reputation Kleros is building in the community to be trusted to arbitrate a grant of that size.
You can view this partnership as the latest part of Kleros’ drive to become known inside and outside of the cryptocurrency ecosystem for their superior solution.
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.