Arbitration System
The problem:
Web2 GIG Platforms like Fiverr address open disputes in this way as stated in the Terms of Service:
“Buyer can contact Customer Support and ask them to cancel the order. If CS agrees with the buyer (for example, no work was delivered, or, a buyer requested a logo and received a poem), they will refund him/her (refund goes to the buyer’s Fiverr account as credit for new purchases).”
“Orders are not eligible to be cancelled based on the quality of service/materials delivered by the seller if the service was rendered as described in the Gig page. Buyers may rate their experience with the seller on the order page, including the overall level of service quality received.”
“Refunded money does not go into User paypal/credit card, but into the Fiverr buyer balance and it can be used for future purchases only, it cannot be withdrawn”
Solution:
Altverse decentralized ecosystem provides an Arbitration Clause process. The Arbitration Clause can be open either for complete mismatching service delivered or poor quality of service/materials delivered by the Seller/Mentor/Etc. The Arbitration Clause opens up a dispute directly managed, analyzed and solved by a a number of people called ARBITERS. The Arbitration Clause process will reward Arbiters with a fee percentage established and accepted by both parts at the beginning of the smart contract process will be selected as fee (Jobs that require higher level of analysis and time could have higher fees than easier ones, but in both cases as stated before the percentage is decided and accepted by both parts at the beginning of the smart contract process before deployment) The refunded money goes directly into Users wallet
THE ARBITRATION APPLICATION WILL HAVE A MINIMUM ENTRY PRICE per category
For example only for jobs over 500~1000USD
ESCROW X ARBITERS (concept)
Table of Content
How do you define an arbiter and his voting power?
Fair Decentralized voting system inside the DAO.
How are Arbiters elected?
How Arbiters are rewarded for a specific “Arbitration Clause” and how do they apply for one?
What happens if no Arbiters (or not enough) apply for an Arbitration Clause?
1. How do you define an arbiter and his voting power?
Users will be eligible to become Arbiters through the DAO voting system view point 3.
Elected Arbiters are defined by 3 main qualities: Category, Qualification, Rating. For example:
Category: Dev, Designer, Lol Mentor, etc.
Qualification: to qualify as an arbiter a user will have to be,KYC, own a Soulbound NFT arbiter, own gToken, stake X amount of gToken (to verify loyalty for the project)
Rating: Both clients and customers will be subject to a rating system (1 to 5), the same will be for arbiters*. (Can rating be defined by souldbounds? Users with high score will be eligible to claim special soulbound NFTs that will have special use case/rewards for example, stacking boosting yields, Featuring/visibility/authority, small prizes etc) (souldbounds are airdropped to wallets by automated system when claimed, High number of these rating souldbounds NFTs will be rewarded with Milestones special rewards inside the ecosystem)*
Pros:
Category and Qualification will improve research, selection and listing qualities.
The ecosystem will grow based on meritocracy growing a healthy and trustworthy space, scammers are kept under control. Cons: -DAO/Company will need to qualify and rate Arbiters adding extra steps to workflow.
Arbiter Voting Power Arbiters will have equal voting power during Arbitration Clause at first. (Later on users can apply for higher rated/honorable Arbiters for a higher process fee incentivizing even more arbiters)
**2. FAIR decentralized voting system inside the DAO.
How do you establish a FAIR voting system?**
Statement
In traditional companies, top-level decisions are usually made by a board or the C-level team in a top-down manner. Alternatives do exist, such as bottom-up decision-making and horizontal management. However, by and large, a set hierarchical process is the standard. Of course, this has some benefits, such as its well-established structure, and downsides, for example, accusations of inequality or slow decision-making. However, in decentralized autonomous organizations (DAOs), the decision-making process works a little differently.
DAOs aim to present an alternative to centralized organizations on all levels, including their structure, how they operate, and how decision making happens. Originally, DAO decision making followed a simple token-weighted system: essentially one token, one vote (1T1V). However, this mechanism has proven somewhat contentious in the crypto community, with many arguing that 1T1V is always weighted towards people with more tokens or stake in the organization, giving them the potential to create a token monopoly.
This inequality tends to contradict with the fairness-based aims of most DAOs, which sparked a debate: if a token-weighted mechanism is not fair, then what is?
(Click down for research and choices)
3.How are Arbiters elected?
From research
Liquid democracy or vote delegation
Similar to a political democracy, a liquid democracy in a DAO utilizes an electorate—a group of elected experts—to make decisions. Although this may sound a lot like centralized decision making, DAOs have made this process more ‘liquid’. In practice, what this means is that DAO members can assign or ‘delegate’ their votes to another party, for example, an industry expert, who will vote on their behalf. However, unlike a political democracy, if for some reason, they lose faith in this person or would like to change their expert, they can delegate their votes to another.
How we apply it to Altverse protocol and why?
Every user will be gifted soulbound NFTs with voting power when they sign up for a verified profile.
A selected limited (scalable based on necessity) group of people, chosen by our members and/or community members/gToken owners (the implication is that communities will be mostly made of users) will be able to vote and assign this role to delegate Arbiters as decision makers when counterparts open a Dispute/arbitration Clause. Arbiters are supposed to be industry expert too, being qualified for the ‘job’.
Members voting are basically stacking their voting NFTs As so having established members for the Arbiter position will guarantee a fast process simplifying the execution. The Arbiter role could become and be re-defined as new career or side job.
The Arbiter cover a Key Role for the functionality of the entire ecosystem, as so, the position has to be the most transparent possible.
As stated previously Arbiters will be rewarded for their good performance, in contrary to this, a bad performance or inactivity will be reported, a new voting will process in which Arbiters could lose their role and status. The vote itself( in the form of soulbound NFTs ) will return to members/users that can reapply their vote to new Arbiters applications. (Members can unstake their voting soulbound NFT manually at any time.)
(the system would look like a ranking page, Arbiter position applicants profile will show in a ranking system based on Category and top X people will be automatically elected)
Why would Dao members vote? As a Dao members usually want to contribute to a specific task in order for the ecosystem to grow in the most organic and positive way. (same as voting in politics)
A non voter simply ignore his rights.
Arbiters Applicants will need to be KYC, verified, upload their personal portfolio on the blockchain to prove their qualifications.
Any user can become an arbiter, but wont be able (logically) to participate and vote in their own Arbitration Clause if/when they open one.
4. How Arbiters are rewarded for a specific “Arbitration Clause” and how do they apply for one?
When Arbiter is approved for a position he will automatically receive in the wallet a specific soulbound NFT representing their role and their category. (later on highest level Arbiters will receive a special one too for High priority Arbitration Cases) When arbitration clause is open, the smart contract between parties will be already related to a specific category (ex:dev). A DEV category application opened will have a limited number of Arbiter spots to apply for.
The earliest and fastest Arbiter with the correct Souldbound NFTs (dev category) will be able to apply and vote for the clause.
When applying the Soulbound NFT is automatically recognized in the specific arbitration application/clause.
(Each Clause case act similarly to traditional stacking pool in a lending and borrowing protocol in the smart contract.)
After voting and the outcome of the application is defined, the percentage fee for Arbitration Clause established at the beginning between parties will be divided equally between soulbounds NFTs that applied for the vote and claimable as “yield”, with a simple button (The Claimed reward for the Arbitration Clause will be redeemable in the form of the payment used for the specific case (either USDT, USDC, our stable payment token if we will have one, or our governance token).
The Arbitration fee earned from the Arbiter is redeemable only after a specific amount of time/stacking to prevent even more the possibility of scammers.
5. What happens if no Arbiters (or not enough) apply for an Arbitration Clause?
The Arbitration Application will expire in a specific amount of time.
After that if no, or not enough, Arbiters have applied to the Clause, the part that opened the clause can request a secondary application where any KYC member can apply will be available for another automated limited amount of time for example 48H (listed as unapplied arbitration application). IF not the Clause is automatically closed and marked as Completed.
IF not secondary application is requested within a specific amount of time for example 48H, the Clause is automatically closed and marked as Completed. 6.SBT and GOV Token Solution
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