In July 2018, a blockchain project called Kleros organized a competition, “Doges on Trial,” that asked participants to submit images of those cute little shiba inu pups known as “doges” for a kind of curated meme library.
Kleros asked for shiba inu photographs, but also encouraged participants to challenge dubious submissions through its blockchain voting software; anyone who managed to slip a cat through the net would be rewarded 50 ETH, worth $25,000 at the time. The idea was to test the limits of Kleros’s decentralized arbitration software, and its capacity for keeping a bunch of dispersed, anonymous individuals in alignment with a single goal. (The goal of building a library of doge memes.)
“This 50 ETH reward,” Kleros wrote nearly one year later, “was a way for us to test the cryptoeconomic robustness of the Kleros system, such as resistance to bribe attempts and other attack vectors.”
The problems began when a participant called “Ricky” managed to get an image of a fluffy orange cat—which from behind looked exactly like a shiba inu—onto the list without challenge. It looked like a sure win, and Ricky claimed the reward.
However, Coopérative Kleros, the French legal entity behind Kleros, issued a counterclaim through Kleros’s own interface. Citing a technicality in the official payout policy, Kleros argued that the submission did not qualify. Adjudication of the matter before a panel of Kleros jurors resolved in Kleros’s favor, and Ricky got nothing.
To Kleros’s critics, the result was a ludicrous irony: Kleros had designed the…