Kleros, a dispute resolution layer for the internet, has announced that it will be using the model of an Interactive Token Sale for its crowd sale which is set for the 15th of May, 2018. Kleros has not accepted private funding and will not perform a pre-sale for private parties.
Kleros works by arbitrating disputes over transactions, services or potentially anything on the internet, by randomly selecting jurors who are experts and also hold the projects native token, named the Pinakion (PNK). Holders of PNK tokens are eligible to become jurors in disputes that have been initiated by two parties that elected to use Kleros for their dispute resolution. Based upon how jurors vote, holders of PNK can earn additional tokens if they judge the dispute correctly, according to their peers.
Federico Ast, Kleros CEO, explained: “Initial Coin Offerings have shown the phenomenal public interest in funding blockchain projects, but participation has become a lot harder. Due to exclusive private sales and pre-sales, crowdsales have now bypassed the crowd. We want to change that, which is why we’ve gone for an interactive ICO which allows for a fairer token sale. That way, participants can set their own cap, and then a uniform token valuation is deduced, based on the total ether contributed.”
The model of the Interactive token sale was first proposed in a paper written by Vitalik Buterin, co-founder of Ethereum, Jason Teutsch, co-founder of Truebit, and Christopher Brown, CEO of Modular. The Truebit and Modular project, who has since built the application that will run the crowd sale. Kleros has declined private sale offers from major investors, electing to proceed directly to a public sale in which everyone has an equal opportunity to acquire tokens. Buyers are free to submit a bid for tokens but retain the option of voluntarily withdrawing their offer if the hard cap of the sale become too high.
The Interactive token sale concept aims to resolve problems associated with capped sales including oversubscription, network congestion, and, in the case of uncapped sales, misaligned incentives between contributors and developers. Kleros’ purchase protocol will allow participants to specify the amount of tokens they’d like to purchase and a personal cap in ETH. The contract will then remove contributors whose cap was exceeded, starting with the lowest bids, and these individuals will be given the option of entering a higher personal cap to ensure inclusion.
A total of 16% of all PNK tokens will be issued in the Kleros token event on 15 May 2018, with the remainder of the supply earmarked for a public sale to follow. In total, 66% of the 1 billion PNK minted will be distributed for sale. Further rounds of funding will be scheduled as the company completes the milestones featured on its website.
Ast added: “In addition to choosing the IICO method, we have decided to do the sale in more than one round, similar to the model of a traditional start-up, we are doing a smaller initial public sale followed by a sale later. We think it’s fair that people can choose to keep supporting the project as the team delivers on the product.”
Kleros has also released a working demonstration video of its product. The protocol is scheduled to be released to the public before its token sale in May.