Klerolization as a service

Having another daydream moment and wondering if it’s possible for Kleros to offer something like a “Klerolizaiton as a service” type of thing. Basically turning other governance tokens into Kleros-like token and grant them the functionalities to create their own DAO courts.

What gives me the initial idea is the Gitcoin’s approach to verifying grants. Now they basically have this semi-pro FDD (Fraud Detection and Defense) workstream to manually (sometimes with machine learning and other tools) check each grant and filter out the fake and malicious ones based on FDD ingroup/private decisions. This process could definitely be more efficient and decentralized (in my opinion at least).

What I’d like to see is probably something like a curated list of grants governed by governance token holders. Basically the entire GTC (gitcoin’s governance token) holders are the FDD workstream. All participants could submit a grant to the list (with something lock, e.g. 10GTC), and it will be verified and active by default. And if any gitcoin participants find the grant to be inappropriate, they could push the “flag” button (with something locked o’course, e.g 0.01ETH) and send it to something like a GTC DAO court where GTC holders/jurors could decide if it’s indeed a fake or malicious grant.

We’ve already had something similar with Kleros and PNKs, so wondering if its possible to turn Kleros’ design and experience into an actual systemic service and help other governance tokens build their own version of DAO courts (thus the name Klerolization as a service). How it works is that we’ll probably have something like a Kleros general DAO court, and within, it will have sub-courts like GTC DAO court, Aave DAO court, Uni DAO court, Maker DAO court etc, where jurors stake GTC, Aave, Uni, Maker tokens (or even dual tokens, e.g. 50%Uni, 50%PNK depending on the rules) to solve their own disputes, i.e, a decentralized governance forum/platform solely for daily DAO disputes (not that efficient to have a proposal for each tiny dispute imo, need a different system to do this).

One of the biggest concerns for this imaginary DAO court is probably the existing protocols already having their own staking services and it will possibly split the available tokens to be staked in the DAO court, i.e. easier to attack, and that’s where Kleros step in, as a base layer of security for all these DAO courts, where one could appeal a case in the sub-DAO court and it’ll go to the parent Kleros DAO general court and PNK holders/jurors will ultimately decide the fate of this appealed sub-DAO court case.

Many people have asked why would one use PNK/Kleros instead of their governance tokens, and the answer is quite often the good old: it is not easy to design a good arbitration system. What if Kleros does not only offer a good arbitration system, it also could turn all the other governance tokens into actual god-tier arbitration systems? By creating a decentralized arbitration ecosystem, Kleros could actually become the ultimate governance token for all governance tokens, aka justice for the new democracy.

Details of this idea could be discussed further, but the basic idea is to provide a service where all governance tokens could be turned into PNK-like tokens. Not sure if its actually practical for smart contracts to work like this, that’s why I am sharing this idea here wishing for some criticism and feedback.

A big objection I see to this is that other tokens are not meant for arbitration and therefore holders of these other tokens don’t want to be involved in arbitration for the most part. So you would expect only a small portion of AAVE holders for instance to be on jury duty. This makes the system unstable since in case of a contentious dispute, other big holders who were not signed up for jury duty could sign up and overpower the existing court.

So to me the question is: why not “just use Kleros” directly? That way you get the advantages of arbitration by an unbiased third party without having to overextend the scope of your token. Plus, you don’t need to detail with the extra burden of maintaining a court system (or pay the Kleros DAO to do it for you).

I also think it’s worth stressing that one thing that makes Kleros and its token particularly valuable (which I don’t see mentioned often enough) is that jurors are incentivized to vote in the most unbiased way possible since any failure to do so sends a signal to the market at large that Kleros is failing at its sole purpose, thereby devaluing the jurors’ tokens.

tl;dr A good court/arbitration token has arbitration as its sole purpose.