There is no one-size-fits-all solution for crypto-related dispute resolution. The sheer complexity of the space has pushed jurists and engineers into building innovative protocols that, through game theory and proper incentives, allow for scalable solutions for ADR, allowing token holders to participate in said protocols as arbitrators. This is, in a way, an upgrade from traditional arbitration, which has two main issues that makes it inefficient for crypto-related disputes: 1) it’s expensive, and 2) it’s not enforceable on-chain.

Taking this into consideration, Curia aims to bring the best of the on and off-chain worlds. In contrast with other on-chain arbitration protocols, Curia is curated, we offer specialized panels of arbitrators, picked from our pool of LexDAO Lawyers and Legal Engineers, and contrary to traditional arbitration, Curia offers affordable, professional arbitration, with the capacity to enforce disputes on-chain thanks to our escrow and other smart contract tools. However, if the parties choose not to use our escrow or the dispute is not related to tokens, then our Curia Award would still be enforceable through off-chain courts, since our rules are based on the UKJT Digital Dispute Resolution Rules, meaning that ordinary courts should recognize the awards issued by Curia jurisdiction.

Beyond solving ordinary disputes between two or more parties, Curia would also help DAOs develop their own internal dispute resolution system, providing model procedures and handling any potential dispute related to governance, contributor vs DAO, users vs DAO, and DAO2DAO disputes. Using crypto-native arbitration for disputes in our space should help make it more self-sufficient and rely less on off-chain courts that have little understanding of how the space works. Another use case for Curia could be as an Oracle for off-chain events or a systematic review of subjective determinations, such as the fulfillment of contract obligations.

Services

The three main services offered by Curia are arbitration, mediation, and our escrow. These might overlap with each other, though, for example, parties might (and should) want to lock funds in our escrow for the duration of the arbitration.

I. Mediation

Even though arbitration is our main product, we encourage parties to seek mediation before proceeding to an arbitration (this is optional). Our aim with Curia is to solve disputes between parties, but also reduce friction between them. The best way to ensure that both parties are on good terms is to provide an alternative in which they can both agree upon the outcome of the dispute resolution, and that's mediation.

(These steps may vary depending on the nature of the dispute)

1. Parties agree to submit their dispute to Curia Mediation, and if the nature of the dispute is related to tokens (ERC721 or ERC20) then they can lock them in our escrow.

2. Mediators are assigned by our appointment tribunal, and they proceed to create three chat rooms. 1 shared among all and 2 separate rooms (or more, depending on the number of parties involved).

3. (Optional) An intro call, and an outro call if they all agree/see it as necessary.

4. Curia Mediators would spend a maximum of three days going back and forth with the parties, presenting an agreement based on what was discussed. Parties have one day to decide if they agree upon this or not.

5. If the parties agree upon the proposed agreement then it's signed by them plus the Curia Mediators and published as an NFT (if parties want it to remain private then it could be minted as an NFT with unlockable content only visible by the parties). If funds were locked in the escrow, then they would be released accordingly.

6. If a consensus can't be reached then we would proceed with arbitration.

II. Arbitration

Arbitration is the core of Curia. If we want to create an alternative financial system, we need efficient self-regulation mechanisms—we don’t want the state to get involved in disputes related to crypto, especially in countries where courts are not up to date with tech.

(These steps may vary depending on the nature of the dispute)

1. Parties agree that they are going to solve their dispute through Curia, either before the dispute arises or once it happens.

2. Claimant submits their claim by filling out a form with details relevant to the dispute (including contact info for the respondent).

3. Respondent is verified and notified by Curia—they have three days to fill in the form with their response.

4. Once the respondent has been verified, the Curia Appointment Body will choose the arbitrators best suited for the dispute, providing a curated panel, formed by Legal Engineers and Lawyers from LexDAO.

5. If the dispute is related to tokens (ERC20 or ERC721), parties are encouraged to lock them in our escrow, so that they can then be released based on whatever the tribunal decides. This allows our awards to be enforceable on-chain, without depending on courts.

6. Parties proceed to introduce their on/off-chain evidence to the tribunal and they may also have an oral hearing if they wish to do so.

7. Tribunal issues an award based on the claims/counterclaims made by the parties. This award is issued as a PDF attached to an NFT, that contains a summary of the award with the PDF as unlockable content.

8. If the parties used our escrow, then the tokens will be released accordingly to what was established in the award.

III. Escrow

The way our escrow works is pretty straightforward, it’s based on LexLocker, a multi-purpose escrow system that can be used in EVM-compatible chains. It allows parties to designate a receiver account as well as to select the arbiter (ideally, Curia), so that then either party might call the lock function, freezing the assets in the escrow. As mentioned previously, it is suggested that parties use our escrow during the mediation/arbitration process, but this is not the only use case for it. There are multiple uses for escrows, for example, instead of relying on Cobie to serve as the escrow for your bets, you could use our escrow which also allows parties to take advantage of DeFi yield by holding tokens as Bento Box Shares. This means that the opportunity cost of payments being held idle is not lost, as payments increase for the recipient.

A more practical use for our escrow is for escrowed payments, let’s say you want to work for a DAO, but you don’t know who’s behind said DAO, and you fear they might simply rug you upon finishing your work by not paying – escrowed payments fix this. By escrowing payments, the employer deposits the employees' wage in the escrow, and they’ll receive it if they accomplish the tasks agreed upon. This could be done in different ways, but ideally, payments should be done through milestone payments, instead of lump-sum. Another interesting feature is that the escrow could be transferable as an NFT – meaning that the content of the escrow (e.g., the employee’s salary) could be used as collateral for other payments, such as DAO memberships.

Curia is still a work in progress, contributors don’t have to be from LexDAO, feel free to join our discord and share your opinions + feedback. Also, if you are a contributor to a DAO and want to incorporate an arbitration clause into your Constitution/Operations Agreement, feel free to reach out to us through our server.