An overview of various projects building bridges between real and virtual jurisdictions - from Kleros to Ulex

Jurisdictions are a foundation for our society. Our social wealth is predicated upon the belief that we can work towards abundance protected by the state.  We might think of states as different colored countries on a map, but reality is a bit more fuzzy. Special economic trade zones scatter the landscape, changing the rule of law.

It is true, however, that these boundaries are geo-spatial in nature. Originally, a chief or regent’s domain - their ability to enforce their law - provided the boundaries of a jurisdiction. Subjects would attend court to air their grievances, and monarchs responded in a public forum. Since these times, however, the world has nation states propagate the McDonaldalization of justice: thousands of besmocked servants of the state doling rulings within tiny jurisdictions with the same gravitas as a queen (or at least, they’ll throw you in jail if you pretend matters aren't so heavy).

It has long been a dream of the cypherpunks to build virtual jurisdictions backed by self-sovereign encryption, but this hasn’t yet properly materialized. In some ways, Bitcoin and Ethereum are jurisdictions with their own enforcement rules. But blockchains are presently notoriously difficult for humans to interface with. Will we ever see the day where distributed ledgers and courthouse judges interact peacefully? Can etheric enforceability of laws transcend the many problems facing our human legal system?


“A quiet revolution, working from the inside out, stands to transform government from lumbering behemoths to a network of consent-rich communities. Not another nation state; a stateless association.”

Tom W. Bell - From the Nation State to Stateless Nations,

One of the greatest problems facing our legal system today is the arbitrariness of its borders.

  • Why should it be so difficult for one to sell their software in a different country?
  • Why should a person be considered illegal for crossing a boundary based on bloodshed hundreds of years ago?
  • Why should citizens be subject to a corrupt system favoring the wealthy (who can draw out legal battles), rather than one that can readily deliver justice?

A slice of humans are striving towards providing a patchwork frame for the countless, overlapping jurisdictions. They believe that if the cost of changing from one jurisdiction to another decreases, business and prosperity will flourish where only bureaucratic red tape lives now.


One of the greatest challenges in building these virtual jurisdictions is actually solving the disputes that rise there. Even in mass multiplayer games, little more than glorified chat rooms, there is a constant struggle to maintain order. What are the proper boundaries on behavior, and who enforces them? Should wizard-coders maintain justice with their banhammers, or can a populace be suitably polled to exile its offenders?

Many projects are seeking to solve this meta-problem of dispute resolution, although we may end up seeing one giant swallow up its competitors in dishing out justice. Kleros has been working on a standard for interoperability in arbitration, so that smart contracts can simply point to another system to resolve any conflicts that need human input.

In other words: eBay, AirBnB, and Uber will be primed for disruption, as peer-to-peer virtual marketplaces will build a true sharing economy. Similarly, reputation is another key issue here. The old system relies upon both reputation and violence for its enforcement. The threat of being labelled as a “felon” is enough to keep many people in line. But for those who don’t mind, the blunt force of an officers' guns provides the ultimate means of shaping collective behavior.

Can sexy blockchain solutions provide a viable alternative to this constant threat of police violence? A ton of softly spoken crypto hippies continue to meet on this subject of ‘self sovereign identity’, and it seems like their ‘decentralized identifiers’, or ‘dids’ will soon allow us to take our reputation between Web 3.0 applications. Would you rather buy a car from someone who your friend circle thinks highly of, rather than a complete stranger? Wouldn’t it be nice to be able to leave eBay but still retain a huge positive feedback rating?


I’m not saying any of this tremendously liberating technology is going to go anywhere, because the reality of it is that most of it has tremendously high learning curves. This learning curve was certainly true with Bitcoin… but it continues to become increasingly accessible. Eventually crypto transactions will occur in the background and consumers will have no idea there was some private key signed some transaction on some public ledger.

It will be challenging to get the baby boomers to view blockchains as worthwhile while their government sugar daddies drip feed them the earnings of the future. Similarly, it will be quite an endeavour to get nation-states to even recognize crypto-jurisdictions as legitimate, when they very well may end up replacing the stuffy courthouses and conniving politicians of today.

Fortunately, a handful of small jurisdictions are trailblazing in this regard; eager to become a nexus of crypto-business. Switzerland, Singapore, Malta, Gibraltar, and more recently, Wyoming of all places, have been creating safe zones for the development of crypto enterprises.

We may soon see bridges being built between these islands of friendly places for crypto-companies; where the threat of being SWAT’ed for on behalf of bankers, tax collectors, and regulators is much reduced. These ‘real world’ jurisdictions will undoubtedly build connections with emerging ‘virtual’ jurisdictions such as Aragon, Kleros, and Mattereum.

While many groups are seeking to implement a vision of decentralized justice, each has its own niche. One group seeks to weave a web of real and virtual jurisdictions with an open source legal framework called Ulex. Rather than relying upon one country to enforce its laws over another, Ulex allows judges to pull upon the entire body of common law in making their decisions.
Ulex is part of the legacy system while still not being part of any state. It is adaptive enough that it will likely allow DAOs and LLCs to hold hands, accelerating the capability of blockchain projects in outcompeting global corporations.

In this system, plaintiffs submit claims while defendants submit counterclaims. A judge looks over the provided statements and evidence, and draws upon all common law jurisdictions to make a decision. Judges are able to do this all remotely, interacting with smart contracts that might hold funds in escrow.


All of this sounds great, but it might be more likely that Ulex simply gets adopted by other projects such as Kleros, rather than become a smart contract platform itself. Or perhaps Augur and Gnosis will be able to expand their capabilities of driving human wisdom into blockchain technology to outcompete the upstarts.

I’m not certain which platform will become the new king and queen of justice, but it seems inevitable that the old system that puts legal resolution outside of the reach of all but the rich will not be able to compete.

Featured image from Pexels

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Activist and writer focused on the next-gen applications of crypto networks. He can be reached at @aitherick or aitheric at protonmail dot com.

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