One of the most helpful tools to emerge with blockchain technology is automatic dispute resolution. Confideal’s ecosystem ensures that disputes are settled fast and without additional losses.
The average arbitration procedure currently costs $2.5 million and takes no less than six months. In the case of a dispute, it is often necessary to hire a third party arbitrator who is usually not familiar with smart contract technology.
Confideal, a platform for creating smart contracts, allows counterparties to resolve disputes quickly and inexpensively. The service is among a host of business tools Confideal will make available for people who do not have extensive legal or coding skills.
The Confideal ecosystem allows both businesses and individuals to negotiate contracts without intermediaries. An Ethereum smart contract serves as an “escrow agent” that stores the funds and terms of the contract until the contract is fulfilled.
The Confideal “escrow agent” ensures that the funds in the contract move in accordance with the terms of the contract. The terms are available only to the counterparties and to an arbitrator when disputes arise among the counterparties.
Parties to the contract can be companies, entrepreneurs, and individuals who want to enter into contracts with each other. Every part of Confideal’s ecosystem exists in interaction with each other and cooperates by voting and making deals.
When two counterparties sign the smart contract, Confideal automatically launches it on the Ethereum blockchain.
Efficient Arbitration Process
If a dispute arises between counterparties after entering into a contract, they can launch the arbitration process. Parties to the contract choose an arbitrator to resolve possible disputes before entering into a contract with one another.
An arbitrator can then resolve the dispute without having access to the personal data of the counterparties. Arbitrators have access only to the counterparties’ cryptocurrency wallet addresses.
Disputes can be resolved without the parties having to leave the Confideal platform. Third parties such as professional lawyers and mediators serve as arbitrators to settle disputes on the platform. These arbiters are qualified specialists with the skills needed to settle disputes.
How Arbiters Are Chosen
To be approved as an arbiter on the platform, candidates submit documents confirming their status. Once Confideal approves them as an arbiter, they are permitted to use the platform. Arbiters then create accounts on the platform and enter their personal data.
The arbiters are paid a fee for resolving contract disputes, which can be up to 10% of the contract’s sum.
Confideal’s arbitration system rates arbiters, delivering high quality arbitration. One factor that determines the rating is based on voting by members of the Confideal ecosystem.
The arbiter rating is based on both objective and subjective factors.
Objective factors comprise 70% of the overall rating and include the speed of response, the number of disputes settled and the completeness of disclosed information about the arbiter.
Subjective factors comprise 30% of the rating and include votes given to arbiters by CDL token owners. The members vote for arbiters with their CDL tokens, the ecosystem’s proprietary token.
Ten CDL tokens are equivalent to one vote. An owner of 1,000 CLDs can give 100 votes to one arbitrator or distribute them among arbitrators.
Members also have the option to vote for arbiters using a system of “likes” and ‘dislikes.” This system serves as an additional subjective measure.
There are two Confideal arbitration modules. In the “arbitration,” module decisions of arbiters can be used in government courts for further enforcement by bailiffs. Confideal arbitration conforms to national and international arbitration regulations.
This module requires the involvement of government courts.
The “mediation” module does not conform with national or international laws. It requires agreement from the counterparties. This module takes less time since decisions are enforced within the Confideal platform.
Once the arbitration concludes, the counterparties evaluate the arbiter.
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