ROI for Decentralized Arbitration and Mediation Network

[pamelawjd]

Continuing the discussion from Decentralized Arbitration and Mediation Network:

It is relatively straightforward to attach a concrete return on investment to proposals creating physical products. It is much more difficult to do so for proposals creating software. It is even harder for proposals that create open source software.

The proposal to build software for a decentralized arbitration and mediation network is one that creates open source software. Third Key Solutions is not proposing to run this software for theDAO, rather the proposal is for anyone to be able to create and run a DAO, offering arbitration and mediation services, using the software we produce.

Our proposal does not include a promise of ROI to theDAO because there is no direct ROI from writing the open source software. However, arbitration and mediation services are not free. A well run dispute resolution DAO with a broad base of arbitrators and mediators could generate substantial fees. While most of those fees would go directly to the arbitrators and mediators, part of the fee could go back to the dispute resolution DAO. The American Arbitration Association publishes fee schedule which could inform the potential profitability for running a dispute resolution DAO. Even if the cost/savings of an automated structure are mostly passed to the claimants, as lower fees, dispute resolution is still a highly profitable business.

It is certainly possible that someone could run a dispute resolution DAO, based upon the software we produce, as a direct contractor of theDAO to generate returns for theDAO. In fact because of the open source nature of our deliverables, several different entities could propose and run several different dispute resolution DAOs as contractors for theDAO. Someone could also launch a dispute resolution DAO that is governed 100% by theDAO and returns 100% of its income to theDAO, essentially an extension of theDAO itself.

The real question for profitability is whether there is any advantage to running a dispute resolution DAO under theDAO. If anyone can run it, why run it under theDAO and pay returns instead of running it independently and keeping all the profits? The answer is simple, if theDAO is successful it will need dispute resolution services for its contracts and it will have a large pool of participants who can immediately serve as decision makers. Therefore, theDAO represents a strong concentration of both supply and demand for this service. While Third Key Solutions sees a very strong connection between dispute resolution smart contracts and ROI for theDAO, our focus is to write the software that allows theDAO and anyone else to execute this business model.

Infrastructure and research proposals must be treated with skepticism because they won't deliver direct ROI. We could have included a promise of ROI, almost all of theDAO proposals will. Some will be fantastical promises. But most will fail to deliver. That is the nature of entrepreneurial ventures. Our proposal is focused, with a low and short term budget and limited, achievable goals. We won't deliver direct ROI but we will deliver valuable legal and technical research, available to everyone in the ecosystem.

[cryptowanderer]

Hi Pamela. Thanks for this - as clear and succinct as Andreas' earlier post. I'm not in the ROI camp on this one, but have some basic questions.

our focus is to write the software that allows theDAO and anyone else to execute this business model.

This seems at odds with your github page in which the initial focus is research and then a 'tentative' focus on software dev after that period. To reiterate: research is definitely necessary - but the proposal as it stands ought not to pass, because what recourse does it offer DTH's if you never produce anything other than the research doc?

Moreover, $30,000 actually seems very low to me for a project of this complexity. I also wonder who will do the dev work - though Andreas is a security expert, it is my understanding that he doesn't do much development these days?

Further, as I understand it, proposals have to be submitted in plain English, and as a .sol contract - any idea what that might look like? have you had any contact with dao.link?

I only ask these questions because I am genuinely interested inw hat you're doing and would actually love to be involved if you get further and need more help.

All my best!

[pursuit55]

While Third Key Solutions sees a very strong connection between dispute resolution smart contracts and ROI for theDAO, our focus is to write the software that allows theDAO and anyone else to execute this business model

This sums it up for me...I get it now. So it would also be very good to see competition by other "vendors" (or maybe a DAO too) to form shortly after your infrastructure is built. Correct? So your proposal will help the DAO ecosystem in general, and create infrastructure for: "opportunity" within the DAO.

[craigrant]

$30,000 and no ROI. I put my money in the DAO to earn profit, even tho I know that good karma can come from giving some small change to a bum in the street, I still ignore them.

[pamelawjd]

Yes, we hope to see both competition and innovation in the space. There are plenty of options for experimenting with who are decision makers (developing algorithms, groups of experts, using prediction markets, etc.), what they charge (revenue model), whether those will be public or private decisions (where to publish if public), identity (what options exist for identity-optional resolutions), and many more. We need a framework for experimentation, that's what we aim to provide.

[pamelawjd]

First, thank you for your thoughtful questions.

You are correct, the $30k is for a research paper only. Think of it like a research grant that could lead to the development of multiple valuable products - but might not. We are not asking for more funding because the research may show that there are limited options for implementing a DAMN at this time. Meaning, we may be forced to completely reevaluate the vision based upon the outcome of the research. Though, I believe, even that would be valuable for the ecosystem. Regardless, we hope the research report will be used by many others in the space as a guide to developing services in this area.

If we get to the software development phase, Andreas would be the technical lead and I would be the legal lead but of course we'll need lots of help. Team development is part of milestone 2 (and beyond).

We haven't decided if, or exactly when, we might seek funding from theDAO. The current proposal is a work in progress. We think it could be a good fit for theDAO, but maybe not. We're still gauging community interest and trying to develop the FAQ. Questions like these really help.

Thanks again for your support!

[eureka18]

Thank you for the very clear reply. I think it is very important that this research is done as we as a DAO can use it.

However, as an economist I still have an issue on the ROI side. Basically, the DAO needs to fund the research. However, the DAO will not reap the benefits from the research. As other DAO's may turn up to generate returns. In this sense we are basically subsidising other people.

[pursuit55]

i don't see i this way, I see this as an infrastructure investment for DAO and the DAO community. this needs to be done. Closed and decentral arbitration opportunities will arise if we can build the building blocks...there will be other "infrastructure investments" outside of arbitration and Mediation that we will need to invest in also in order to grow the ecosystem

[pursuit55]

right...on the more "blunt" side, I would literally invest in anything that Andreas is behind. Investment is just as much about the people behind the project as it is the project, whether the capital is central or decentralized. looking forward to learning more about you too Pamela.

[gbnauthor]

Here's somewhat of a parallel to your idea: https://www.bitrated.com/

There might be some sections in their terms of service you could use as a reference.

I look forward to seeing this project progress.

[seki]

Thanks for the proposal, but I definitely say NO on it from unfairness to the predecessors and pioneers, who volunteered in the history, and also there's several established method for profits already. We can have that kind of research anyway, from crowd of legal firms.

I did not find any of contribution from you to the DAO or crypto-cyber community before including your claims. Unlike your loyal customers, we are The DAO trying to be most advanced form of community building with immutable rules.

I also want to warn about emerging The lake Webgon effect in this community to mislead the people as if they get some authority, but all in each action.

[pursuit55]

I did not find any of contribution from you to the DAO or crypto-cyber community before including your claims. Unlike your loyal customers, we are The DAO trying to be most advanced form of community building with immutable rules.

is this reply even serious? Have you looked who is on the management team of third key? Some guy named @aantonop so either your reply is spam on our DAO forum or you have been under a rock for 5 years and do not pay attention to the decentral community enough to vote or give feedback on proposals.

[iamtrillion]

kindly watch: https://youtu.be/V_RS9Lh_rBY
that is one of the many contributions to the crypto-community.

[pamelawjd]

Thanks for your comments! I'm a big fan of bitrated. If we move forward with this idea, we'll certainly want to see how we can collaborate. At first thought, it seems they could run DRC contracts as providers and immediately expand their network to serve ethereum contracts too. They may also be a good organization to try things like global pool of experts or crowdsourced justice.

[seki]

Sorry, yours does not make sense. I already in a sense of being ahead of currency / fintech / pre-sales but much larger granularity of scope, which covers all industry/region and fundamental problems across the world.

Here's a good example of the legend.

The future will be decentralized | Charles Hoskinson | TEDxBermuda

It's a kind of famous pitch probably before ethereum launch, but the situation has not been changed.

I believe it describes well how The DAO was made on top of Ethereum, and why I think those you claim are out of the context.

[seki]

Thanks. I watched it, and found some good expressions.

From the context, he explains to swiss bank that what they've kept as highest priority, the privacy is default in web3, and think about that seriously and go beyond to survive within financial industry.
Very good. I can make my own bank already, and I myself might be a competitor of them.

DAO.LINK utilize them, but The DAO do not require any bank.

I put myself away from fintech people, since I found and talked with slock.it brothers, but interested in it as sub-system technology.

[GroTheNetwork]

I've read the proposal and I am for this even without A.A's recommendation to consider.

Here is why: http://www.ekathimerini.com/208883/article/ekathimerini/news/lawyers-strike-leaves-some-300000-legal-cases-pending

According to Athens Court of First Instance head Spyros Georgouleas, the 300,000 pending cases will take between seven and 10 years to plow through.

[shakedog]

I will vote YES for this proposal for the obvious reason that it is well constructed, extremely disruptive in nature, realistic in its goals, and is a service/solution that appears to be in high demand. I hope The DAO receives many more proposals as well written and thorough as the DAMN's.

I have one question: what sort of marketing strategies would be needed so providers and claimants are aware that this software exists?

[jeffanthony]

I have one question only. If you were fully operation would you be able to force Slock.it to abide by their proposal terms to The DAO?

[rileyjt]

Basically, the DAO needs to fund the research. However, the DAO will not reap the benefits from the research. As other DAO's may turn up to generate returns. In this sense we are basically subsidising other people.

The DAO is in need of the services that this would provide. If we can kickstart the development of such services, it would provide additional security for all the other investments that get made. That alone makes it worthy of a research grant type proposal IMO. Further development of course would require an ROI, but at that point even if someone else takes up the development and execution costs, the DAO would still benefit by using its services.