Kleros Court
Kleros Court is a decentralized dispute resolution protocol that provides arbitration services for smart contracts and decentralized applications. It works by randomly selecting jurors from a pool who are incentivized to resolve disputes honestly through a crypto-economic mechanism based on game theory. Think of it as a decentralized judiciary for Web3. When a dispute arises, jurors are randomly drawn, they review evidence, vote on the outcome, and the majority decision is enforced-all without centralized intermediaries. Kleros Court comes in two versions. V1 is the production-proven protocol running on Ethereum since 2018. V2 is the next-generation upgrade on Arbitrum with a modular architecture.V1 - Production Protocol
Court V1 launched on Ethereum Mainnet in 2018 and has resolved over 1,500 disputes. Its core smart contract is KlerosLiquid, a single (monolithic) contract that combines juror staking, random selection, voting, and dispute management.
Jurors stake PNK directly from their wallet in a subcourt, are drawn at random with probability proportional to their stake, then commit and reveal their votes on the submitted evidence. Coherent jurors are rewarded; incoherent jurors lose part of their stake.
V2 - Next-Gen Upgrade
Court V2 runs on Arbitrum L2 and replaces the monolithic contract with a modular design: KlerosCore coordinates disputes, the SortitionModule handles juror selection, and pluggable DisputeKits provide the resolution mechanism. Cross-chain disputes are relayed through the VEA bridge.Key Capabilities
Random Juror Selection
Crypto-Economic Incentives
Hierarchical Courts
Modular Dispute Kits
Cross-Chain Support
Trustless Execution
How It Works
At its core, Kleros works through a simple yet powerful process:1
Dispute Creation
An application encounters a contentious situation and creates a dispute in Kleros, paying arbitration fees.
2
Juror Selection
Jurors are randomly drawn from those who have staked PNK in the relevant court. Selection probability is proportional to stake.
3
Evidence & Voting
Jurors review evidence submitted by both parties and cast their votes during the voting period.
4
Resolution
The majority decision is enforced. Coherent jurors are rewarded; incoherent jurors lose a portion of their stake.
The Incentive Structure
The system is designed so you don’t need to trust anyone:- Jurors are incentivized to vote honestly (or lose their staked PNK)
- Disputants pay fees only for resolution, with no protocol commission
- Appellants can challenge rulings by funding additional rounds
Core Components
Who Uses Kleros Court?
- DeFi Protocols resolve oracle disputes, liquidation challenges, and governance conflicts
- Prediction Markets settle market outcomes with decentralized arbitration
- Escrow Services release funds based on impartial third-party rulings
- DAOs handle contributor disputes and proposal challenges
- Insurance Protocols adjudicate claims without centralized authority
- NFT Marketplaces resolve authenticity and ownership disputes
What Changed in V2
V2 keeps the same crypto-economic model as V1 and changes how it is implemented and where it runs:Kleros V2 is currently in beta with 100+ disputes successfully processed. The system is undergoing internal review and external audits.
Current Status
As of the May 2026 development update:- Court V2: the partial-coherence dispute kit was merged, and contract simplification across dispute kits was merged (June 2026).
- Court V1: April staking rewards were shipped in the rewards exporter. Since August 2026, staking rewards are shown at rewards.kleros.io, which replaced the in-app rewards page.