Skip to main content
Status: Live (Public Adversarial Dispute)
The real problem (not a theoretical one) In any marketplace where buyers and sellers don’t know each other, disputes are not an edge case — they are a normal part of the system. Common, real-world examples:
  • A buyer says “the product never arrived”
  • The seller replies “it was delivered, here’s the tracking”
  • A customer pays for a service (design, repair, delivery) and claims it doesn’t meet the agreement
  • The provider claims they did deliver as agreed and the buyer is requesting an unfair refund
  • A product arrives but:
    • it doesn’t match the description,
    • it’s damaged,
    • or it arrives later than promised
These situations happen every day, even on large marketplaces.

​
How disputes are handled today (and why this doesn’t scale)

Most marketplaces resolve disputes in roughly the same way:
  1. Funds are held by the platform.
  2. The user opens a support ticket.
  3. A support agent:
    • reads messages,
    • reviews screenshots,
    • interprets internal rules.
  4. The platform makes a decision and releases the funds.
This approach creates several structural problems:
  • ❌ The platform acts as judge and party
    It decides over funds it doesn’t own, while its own reputation is at stake.
  • ❌ High operational costs
    Every dispute requires human time and review.
  • ❌ Opaque decisions
    Users don’t clearly understand why a decision was made.
  • ❌ Poor scalability
    More users → more disputes → more support → higher costs.
As a result, many marketplaces:
  • limit refunds,
  • systematically favor one side,
  • or simply ban users.
This breaks trust.

​
The key insight: escrow without arbitration doesn’t work

Many marketplaces rely on an escrow model:
  • the buyer pays,
  • funds are locked,
  • funds are released if everything goes well.
But when a conflict arises, a critical question appears:
Who decides who is right?
Without a clear answer:
  • funds remain stuck,
  • decisions become arbitrary,
  • escrow loses its purpose.
👉 Arbitration is what makes escrow work. This is exactly the insight Kleros addressed — and what Justly applies in a more modern, fast, and UX-friendly way.

​
How Justly solves this for marketplaces

Justly integrates as an external dispute resolution layer. A simple flow:
  1. The buyer pays → funds are locked in escrow.
  2. The transaction proceeds normally.
  3. If a conflict arises:
    • either party can open a dispute via Justly.
  4. Evidence is submitted:
    • product description,
    • messages,
    • receipts,
    • deliverables.
  5. A group of independent jurors evaluates the case.
  6. Jurors vote based on clear rules.
  7. The final ruling:
    • releases funds to the buyer or
    • releases funds to the seller.
All of this happens:
  • without the platform making the decision,
  • without internal human support,
  • with transparent, verifiable rules.

​
A concrete (very realistic) example

Design services marketplace
  • Price: 150 USDC
  • The client claims: “the design doesn’t meet the agreed scope”
  • The designer claims: “I delivered exactly what was requested”
With Justly:
  • Both parties submit:
    • the original brief,
    • the delivered design,
    • the conversation history.
  • Jurors evaluate:
    • Was the brief respected?
    • Is the delivered quality reasonable?
  • A vote is taken.
  • Funds are released automatically according to the ruling.
The platform does not intervene.

​
Clear benefits for the marketplace

For the platform
  • Lower support costs.
  • Reduced legal exposure.
  • Auditable, consistent decisions.
  • Scalability without added friction.
For buyers
  • Confidence to pay upfront.
  • Real protection in disputes.
For sellers
  • Protection against abusive claims.
  • Clear rules from the start.

​
Why this matters (strategic importance)

Without fair dispute resolution:
  • users lose trust,
  • prices increase to cover risk,
  • or users leave the platform.
With Justly:
  • conflict stops being an existential threat,
  • and becomes a normal, solvable part of the system.
Most marketplace disputes are typically resolved using Tier 1 or Tier 2, depending on transaction value and platform risk tolerance. See Dispute tiers.