Candao Social Arbitrage
Social Arbitrage, as one of the most developed "sub-societies" on Candao, has been described in detail separately in the following section.
In the event of any dispute between Candao Ecosystem participants related to the provision of services or delivery of goods managed through the Candao, the parties of the transaction subjected to dispute will be able to choose any Candao members who decide to act as arbiters (please refer to the next sections covering details on how to define your social role). This might be either a guild or selected members.
Parties to the transaction will need to define the rules of the arbitrage before entering into the transaction.
Arbitrage is optional and does need to be defined for every Candao-governed transaction. However, it increases the chances of fair resolution of any dispute arising from the transaction. Therefore, it is recommended to always choose at least 3 neutral arbiters per transaction.
Defining arbitrage requires:
  • Selecting Candao users to act as arbiters (only arbitrage guilds or members tagged as arbiters can be selected)
  • Defining Arbiter remuneration in CDO (can be set as a % of the transaction value)
  • Waiting for acceptance from arbiters
Triggering the social arbitrage selection process requires a small amount of CDO tokens so as to avoid spamming or exploitation of the system. Once selected arbiters accept arbitrage, the transaction between the parties is moved to the escrow stage, in which the amount of tokens to be transferred due to the transaction is moved to the temporary vault.
The transferred amount is released to the target recipient only if:
  • Both parties have designated it as a "green flag," indicating that there are no disagreements or reservations about the quality of the provisioned services or goods.
  • The time period specified for escrow has passed, and none of the parties has raised a "red flag" regarding the transaction (meaning entering into dispute and triggering social arbitrage).
If a transaction is red-flagged, it is the arbiters' role to vote on the best possible resolution of the dispute. The arbiters can choose between:
  • Cancelling the escrow (tokens to be transferred are returned to the original owner)
  • Proceeding with escrow (tokens are moved to their original intended recipients)
  • Defining custom resolution (i.e. agreeing that a specific % of token amount will be transferred to the original intended recipient, and part will remain on the original wallet).
If the result of arbitrage is inconclusive (e.g., an equal number of votes for every solution), users are offered 2 solutions:
  • Cancellation of the escrow contract and arbitration.
  • Forcing binary arbitrage (cancelling/proceeding) with an odd number of arbiters (the number of arbitrators is either increased or decreased to a predefined odd number). Reduction/increase is either made by party selection or randomly.
Pic. 13 - Candao social arbitrage Arbitrage process
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