Build a Court System Oracle

[IMPACT] Please describe your proposed solution.

The Problem: Blockchains lack any interface for users to enforce their rights in court. As a result, centralized providers have a near-monopoly on use cases where access to courts may be needed, which is to say almost every aspect of mainstream commerce. The lack of access problem is often overlooked but its impact is pervasive.

Take for example smart contracts for commercial transactions. Smart contracts offer a host of advantages over paper contracts – they are automated, they are cheaper, and they eliminate counterparty risk – yet very little contracting business has migrated to the blockchain because users cannot go to court if there is a problem. To illustrate, imagine that Sally finances a car which turns out to be a lemon. The Lemon Law gives her the right to sue the dealership and stop making payments, which works fine when Sally uses a paper contract. But if Sally switches to an automated smart contract it will keep deducting her payments because the code cannot decide if the car is a lemon. Because Sally would lose her legal rights she cannot choose to use a smart contract. 

When it comes to court access, DAOs and Web3 services suffer the same disadvantages as commercial smart contracts. If a court finds that a bank customer was victimized by fraud, the court can order the bank to return the money to the customer. But there is presently no method by which a DEX or DeFi contract can respond to a court order. Until these services are able to do so, they will not fully disrupt their centralized counterparts.

The Solution: The solution is to supply blockchains with actionable data about court orders so that contracts and dapps can execute accordingly. In the simplified example above, if the court sides with Sally, an oracle could inform the smart contract of the ruling and the contract would stop drawing from her wallet. In particular, the oracle would report the court's opinion as a state change which the court order requires and the smart contract or dapp can perform a transaction to effectuate it.

Commercial contracts and financial instruments tend to be far more complex than the Lemon Law, but the same principle applies. The outcome of a court ruling no matter how complex can still be expressed as a state change (or the prohibition of a state change) which smart contracts can follow. 

The Opportunity: No major blockchain addresses the need for smart contracts to interface with court rulings. This is a massive opportunity for Cardano. Real economy goods and services are worth some $10 trillion annually. A court oracle will help bring those transactions to Cardano. 

Decentralized arbitration services (in which “jurors” bet coins to decide the case) are sometimes fronted as an alternative for courts, but they have never achieved widespread adoption. Substantial business interests have many reasons to prefer courts to arbitration, such as real trials and the right to compel evidence from third parties. Another disincentive is that users must escrow their private keys with an intermediary to ensure that the arbitration award is enforceable. Users are reluctant to do so because this creates a centralized point of failure and reincurs the trust problems that blockchain is supposed to eliminate. Accordingly, a court oracle will be necessary for Cardano to take full advantage of this $10 trillion opportunity.

The legal technology: One reason developers have not created court oracles to date may be that there is a seemingly insurmountable challenge: smart contracts cannot read court orders, much less interpret them. Parties use attorneys for this purpose. Attorneys are trusted intermediaries, which is antithetical to decentralization in the first place. 

We have developed a patent-pending solution (called “Jurat'') to take attorneys out of the loop. Jurat users can create a machine-readable code (the “Request ID”) to specify the remedy that they want a court to order. The Request ID is formulated from a hash of the state change needed to effectuate the remedy. For example, Sally wants the smart contract to stop drawing monthly car payments from her wallet, so she would create a Request ID specifying that action and give it to the court. 

When the judge decides the case, she will pick the Request ID that corresponds to her decision and include it in her written opinion. The oracle can retrieve her opinion from the docket, extract the Request ID, and supply the state change information to the smart contract. No lawyer needs to interpret the judge’s opinion and no intermediaries are involved in the contract execution.

The following illustrates the four-step process for executing a court order without intermediaries:

To view this process in a larger format, click here.

We have used this process live in federal court to transfer ERC-20 tokens. 

To view the judgement, click here.

Additional information about this solution is contained in the Jurat Whitepaper and the Jurat Whitepaper Technical Supplement.

Deliverables: We will provide a solution to make actionable court order data available for developers on Cardano. The solution will consist of the following:

1. A secure oracle. The oracle will be pen tested and the code will be reviewed and certified by a leading auditor. The oracle will include logic to follow court procedures and deadlines, for example, the automatic 30-day stay on enforcement to allow time for an appeal. 
2. A panel of docket witness nodes which will supply the court-ordered Request IDs to the oracle. The witness nodes will be operated by interested Cardano community members (on a permissioned basis to start) and will be a revenue opportunity for the operators. 
3. A code library and widgets that developers can incorporate into smart contracts, dApps and DAOs. The library will also include basic form contracts (e.g. a court-controlled escrow) that can also be used as the substrate for more sophisticated applications (e.g. a bail bond escrow service predicated on the defendant appearing in court or a real estate purchase escrow that can be frozen by a court in the event of a dispute). The library will launch with a minimum of 10 core widgets. In later rounds we will expand the library based on feedback from the community.
4. Branded applications to showcase Cardano’s ability to interface with courts and provide valuable use cases. For example, we will create a consumer protection coin wrapping service that adds transaction reversibility if ordered by a court. The ability to reverse transactions where warranted makes cryptocurrency safer and more likely to be used in actual commerce. Reversibility also discourages fraud and theft in the first instance.
5. Resources to assist developers with questions about law and court procedures. Our CEO, Mike Kanovitz, will hold Zoom office hours each week to answer specific questions or simply ideate about possible applications. We will also offer live training sessions (and recordings) covering the Jurat system. Further, we will publish a monthly blog highlighting legal problems that developers can address through Jurat and overviews of law like contract remedies, property rights, and data privacy.

Community Benefits: Bringing a court oracle to Cardano will primarily benefit Cardano’s user base by opening new use cases, making smart contracts more versatile, and making DAOs safer. The unique capability will also draw in new developers and new users, thereby increasing the value of ADA for holders and stake pool operators. The ability to connect DAOs to courts will also help government officials who struggle to regulate DAOs. With the oracle they can create solutions that use current regulatory tools like rule-making and enforcement actions in court to exercise their oversight responsibilities. Finally, our company will be able to charge fees that help us recover for the substantial capital and professional time invested to create the technology and to provide returns for our investors. 

Marketing and community education: Court enforcement on blockchains can be a paradigm-shifting development for the space. As such, it will be important to raise consciousness about Cardano’s new legal compliance capabilities, both to educate current developers and to attract new users to the Cardano platform. We have established the following marketing plan.

• Conferences & Events We will showcase the solution at specialized events, such as the Government Blockchain Association’s quarterly conferences, where we can reach government officials and technologists. In 2023, we will take part in exhibiting and speaking at Consensus where we will highlight this unique Cardano project. We will also take part in w3 at DMXCO. Conferences like this will provide exposure to industry changemakers, marketers and consumers. We will also take part in monthly networking events with blockchain groups to educate the community about the solution. 
• Digital Marketing With a community first approach to marketing, Jurat will embed itself within the existing Cardano community through Ideascale, Reddit, Twitter, and Discord. Our community manager will dialogue about the project in ways that further the Cardano mission.
• Digital Assets & eBook Our graphic designer will create shareable digital assets for social media that we will post and can be re-shared. We will develop visual case studies for using the court oracle on Cardano which highlight the ways it can transform commerce and drive adoption. 
• Public Relations A PR agency within the blockchain space will be in contact with leading press sources and will secure placements for our founder, Mike Kanovitz, to speak about the importance of court connectivity and how Cardano is at the forefront of having court enabled solutions.

[IMPACT] Please describe how your proposed solution will address the Challenge that you have submitted it in.

To quote the Campaign Brief, “It’s time to think big!” We have a big vision for opening Cardano to trillion dollar markets that require access to courts. The same platform that drives this court access will also support enforcement of the property rights, privacy rights and other liberties needed for DAOs and Web3 services to achieve legal compliance on par with their centralized alternatives. The following examples demonstrate how transformative a court oracle would be for Cardano.

1.Open centralized finance for the next round of disruption Access to courts is a key advantage that gives centralized providers an effective monopoly on many services. The court oracle can help “even the playing field” and open the centralized solutions up for disruption. The list of disruptive products waiting to be built on Cardano is long and the applications are mutually-reinforcing. For example: (1) Business-ready smart contracts that can both execute automatically and preserve legal rights by access to the courts; (2) Factoring of tokenized debts; (3) Tokenized asset collateral that can address all of the potential and competing claims in the physical asset; (4) Decentralized mortgage finance that lends against the tokenized asset collateral; (5) Digital derivative securities backed by loans against the tokenized asset collateral; etc. 

2.Provide court access to governments and regulated entities The use cases for blockchain by governments, such as healthcare and acquisitions, are only beginning to be explored. Because due process in court is an inherent requirement for government action, any decentralized government function must be addressable in courts to pass constitutional muster. A court oracle will therefore help the Cardano community develop government solutions and cement Cardano’s reputation with regulators for its commitment to compliance. 

Additionally, many functions performed by regulated entities require access to courts. For example: 

• Property custodians. Similarly, unclaimed property laws require anyone holding abandoned assets (e.g., stocks in an unused trading account) to send the unclaimed funds to the state, in a process called “escheat.” Yet DEXs and DAOs lack the ability to escheat dormant cryptocurrency accounts. While no state has yet brought an enforcement action against a decentralized property holder, that is only a matter of time. A court oracle can keep decentralized providers legally compliant by escheating digital assets to a state-controlled wallet.
• Federally insured banks can offer custody but they cannot accept cryptocurrency deposits because transactions are irreversible in the event of a crime or mistake. The oracle will provide a court-supervised method to remedy illegal blockchain transactions in similar fashion to fiat transactions, while still adhering to the basic rules of blockchain immutability. 

3. Addressing DAOs and Web3 compliance needs A court oracle will also make Cardano a better development environment for DAOs and Web3 solutions by providing more sophisticated forms of DAO governance and giving DAOs themselves access to court to enforce business rights, like unfair competition and patent infringement.

4.Providing integrations that augment existing products Court access is a value-add option for existing products on Cardano. By way of example:

• Government partnerships Multiple governments have partnered with, or indicated an interest in partnering with, Cardano and IOHK to create official systems of record, some of which include digital identities. In general, citizens of the governments may have a right to expungement of records or to have inaccuracies corrected, and these rights are triggered by court orders. Similarly, courts may grant third parties a conditional right of access to records concerning a citizen and this access is also subject to court decisions.
• Improving consumer protection in cross-chain bridges and DeFi  Smart contracts are notoriously dangerous. There are almost weekly reports of multi-million-dollar attacks exploiting loopholes in cross-chain bridges, DEXs and DeFi products. A court oracle makes it possible to wrap existing coins so that they can be frozen and recovered. Bridge, DEX and DeFi operators can add judicial enforcement for the assets in their contracts, protecting users in the event of an exploit.   

[IMPACT] What are the main risks that could prevent you from delivering the project successfully and please explain how you will mitigate each risk?

We have identified four main risks for the project.

Risk 1: Hiring is highly competitive, and given Cardano’s specialized ecosystem we need to take special efforts to find additional engineers who are active in the Cardano community. We are fortunate that most people who we have spoken with about the availability of legal rights on-chain have been energized by the concept and often ask to become involved. 

Risk 2: We are currently in a cryptocurrency downcycle that may be worsening. This impacts our budget (see contingencies within budget) as well as the market’s appetite for blockchain-based solutions. Nevertheless, we strongly believe that blockchain’s ascendancy is inevitable and that now is the time to build. We will manage our budget and resources so as to be able to weather a substantial period of reduced revenues. 

Risk 3: With all projects there is a risk that adoption does not occur. This is particularly true of new ideas as incumbents are resistant to change and established providers are rarely able to disrupt themselves. We are mitigating this risk by having a robust marketing plan to promote the project within the community, to those in the legal sector, and to consumers. We are also extremely passionate about the importance of bringing legal remedies to the blockchain and based on our experiences to date we believe others will share this passion. 

Risk 4: Security. Because we are providing information that others rely upon, security is paramount. All code presents a risk from malicious actors; it is unavoidable but it is minimizable. We will take steps to minimize the risks through bug bounties/pen testing and by having the oracle thoroughly audited and certified at level three. Further, it should be noted that the risk of a successful attack through our oracle is mitigated because of the time delays that are built into court procedures. For example, final court orders are automatically stayed for 30 days to allow time for an appeal. Therefore the contracting parties will have notice and ample time to check for errors or malicious acts and can return to court to obtain an amended order if needed. 

[FEASIBILITY] Please provide a detailed plan, including timeline and key milestones for delivering your proposal.

Our timeline is represented in a GANNT chart highlighting the beginning of the project through month 7+.

To view our GANNT chart click here.

Our key milestones include:

1. Link up oracle to judicial witnesses
2. Beta users onboarded
3. First smart contract deployed
4. Complete marketing website
5. Media campaign to popularize Cardano court oracle

We will utilize Jira for sprint management and Monday for non-development related project management. 

Months 1 - 4

• Develop backend of court oracle system 
• Build smart contract for oracle
• Link up oracle to judicial witnesses
• Witnesses linked to verifiers
• Oracle consensus layer
• Regression environment
• Security review and testing
• Design of interface 

Months 2 - 3 

• Develop marketing website
• Write user and case studies
• Begin recruiting Beta users

Months 4 - 5 

• Publicize Cardano Jurat application 
• Release videos promoting product
• Educational materials
• Community push for promotion

Months 6 + 

• Maintenance and bug fixes
• Community outreach
• Continue marketing product
• Case studies for future phases

[FEASIBILITY] Please provide a detailed budget breakdown.

Our budget covers development, marketing and education.

Office Hours

We are providing direct developer education and will absorb the costs in our corporate overhead. The community will have access to open office hours with our CEO, attorney Mike Kanovitz, and one of our engineers. We will hold a weekly drop-in Zoom meeting where developers can have their questions answered, ideas vetted, and learn about legal areas of relevance. This time is worth $45,000 over the course of six months. 

Subtotal for office hours: $0

Software Production 

Our software budget is inclusive of the initial analysis, development, testing, deployment, documentation, project management, and maintenance. The budget covers architecture planning and design. Our team will work in two week sprints utilizing Jira to facilitate open collaboration between designers and engineers. Within each sprint there will be design, engineering, and QA to ensure ontime system delivery. We will also conduct pen-testing by an external firm to confirm that there are no vulnerabilities. An external security audit will be conducted to review code and architecture. 

Subtotal software production and maintenance: $128,500

Marketing and Promotion

We will have a robust marketing, promotion, and PR effort to aid in the awareness and adoption. This includes the marketing website, social media content, SEO writing, public relations, advertising, conferences, digital asset production, and project management related to these efforts. 

Subtotal marketing and promotion: $46,000

Other Costs

Like all businesses, we will have additional costs such as subscriptions, dues, insurance, legal, and supplies. For project responsibility we have added these into our budget.  

Subtotal marketing and promotion: $23,700

Total: $198,200

A detail view of our budget can be found here.

[FEASIBILITY] Please provide details of the people who will work on the project.

We have assembled a one-of-a-kind team consisting of world class technologists, celebrated trial lawyers, and fintech market professionals. We will also be adding contractors for our Cardano project, with a preference for developers who have experience working in Haskell and/or who have completed the Plutus Pioneers program through certification.

Our core team members include the following persons:

Vadim, holds a master's degree with a double major in Distributed Systems and Artificial Intelligence, and an undergraduate degree in Computer Science. He has been granted two patents and has two pending applications, all in the fields of digital ledger and cryptography. He brings to our project 20+ years of experience in finance focusing on enterprise architecture for Global Investment Banks and FMU's within Market Risk, Collateral, and Payments. 

Subodh has 23 years of software development experience, the last 18 of which involved developing proprietary software for various Wall Street banks in the domain of Trade Pricing, Quantitative Risk Management and Brokerage Operations. He has designed, developed and deployed several large distributed computing solutions for banks using various proprietary and open source technologies. Experienced with various tools including Java, Scala, Python, C++, Microsoft C#, Hadoop and Apache Spark Big Data platforms.

Mike Kanovitz holds a JD degree from Cornell Law School and is the co-founder of several companies in addition to Jurat, including a 100-person civil rights law firm, Loevy & Loevy, and an AI start-up studio, Exponential Ventures (XNV). In addition to practicing as a civil rights trial lawyer for over 20 years, Mike represents victims of cryptocurrency fraud in consumer protection cases. From this work he recognized the need for blockchain-based legal technology. He is a member of the Government Blockchain Association and the author of several works addressing the intersection between law and blockchain.    

Alexzandra Fields has worked within tech startups for the last decade, and led the marketing and sales team scaling a fintech wealth management platform from under $250,000 in AUM to nearly $1B in less than 6 months. She also consults as a product developer for a SAS platform where she is focused on product enrichment. 

We will also be able to draw on resources from our partner organization, XNV, and work with Adriano Marques who has a Masters in Computer Science from Georgia Tech whose background is in Software and AI Engineering. We may also utilize Igor Muniz (software engineer), Tony Kamillo (software engineer), Andre Tapxure (Devops and infrastructure), and Shetara Sawyer (UX). 

[FEASIBILITY] If you are funded, will you return to Catalyst in a later round for further funding? Please explain why / why not.

Yes and no. We expect that our requested budget will suffice for us to provide the deliverables in this proposal. Regardless, we are prepared to co-invest if necessary to see this project launch on Cardano.

We do expect to submit follow-up proposals in later rounds because we see the movement towards on-chain legal rights as a long-term project that will evolve over time. One such proposal will likely be to increase the code library and smart contract widgets offerings based on community feedback so as to better support development on Cardano. We anticipate that this will be a modest funding request.  

Longer term, assuming that there has been good adoption in the Cardano community, we intend to propose a soft fork that can incorporate a court interface directly into Cardano’s computational and settlement layers. Philosophically, we believe that legal enforcement should be available to every user in every circumstance on-chain, just as it is off-chain. This will require a base level of integration such that courts can provide compulsory legal remedies. The oracle method to incorporate court enforcement into smart contracts cannot protect the rights of non-parties, such as a user who has been hacked or defrauded. 

A truly compliant blockchain environment must respond to court actions by regulators and law enforcement officials. Such matters are compulsory so an “opt in” method like contracting is insufficient.The absence of compulsory legal enforcement has led to widespread problems with blockchain lawlessness and inhibited adoption. Relatedly, for Web3 and DAOs to replace their centralized counterparts, there needs to be a judicial enforcement layer in the stack supporting them to protect third parties and the government’s interests. 

Therefore, after we have proven the usefulness of on-chain legal remedies through the smart contract implementations we are proposing for F9, we intend to return for funding to develop an integration solution that we can propose to the community.  

[FEASIBILITY] Are you or any member of your team working on any other proposals in this Fund9?

[FEASIBILITY] Are you or your team working on any other proposals from previous Funds?

[AUDITABILITY] Please describe what you will measure to track your project's progress, and how will you measure these?

We will measure our progress daily across the following KPIs:

KPI 1: Deployment to Testnet

KPI 2: Deployment to Mainnet

KPI 3: Beta Release & Launch by EOQ (from launch)

KPI 4: First smart contract deployed

KPI 5: 2 million impressions through marketing efforts

Additional trackable goals: 

• Percentage increase in attendees that take part in our Office Hours.
• Deepen our relationship with existing Cardano DAOs.
• Web traffic increases 10% month over month

[AUDITABILITY] What does success for this project look like?

As stated, we believe strongly that official, government-constituted courts are vital to assure that every member of society has the opportunity to obtain justice. Impartial judges and peer jurors are also the best protection yet invented to prevent abuse of authority by governments and the powerful. Our mission, therefore, is to secure the role of courts in the face of technological change. We invented Jurat so that courts could continue to dispense justice in decentralized environments.

We are in the first phase of implementing that solution, in which we will empower developers to build profitable court-access products as this is the most sustainable way to scale. These are the solutions we are proposing in this Challenge. 

Success involves developers building profitable businesses on Cardano that would not be possible or which would not be as popular without the availability of on-chain legal remedies. We also want to see businesses adopting Jurat in commercial smart contracts. Success in this phase also involves raising consciousness about the existence of on-chain legal enforcement and about why it is a necessary missing piece for blockchain to achieve widespread adoption. Beyond adoption, we will look for evidence of increasing public discussion of Jurat or the concept of on-chain legal rights, such as articles in popular publications like Medium, active Reddit/Discord communities and forum debates about the pros and cons of our proposed solutions in mainstream cryptocurrency groups like Bitcointalk.org. This success will be community acknowledgment of the legal enforcement need and constructive criticism from the community so that we can improve our solutions.

[AUDITABILITY] Please provide information on whether this proposal is a continuation of a previously funded project in Catalyst or an entirely new one.

This is an entirely new proposal not based on a previously funded project.

Sustainable Development Goals (SDG) Rating

Our proposal focuses on SDG 16:

Goal 16. Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels

SDG subgoals:

16.10 Ensure public access to information and protect fundamental freedoms, in accordance with national legislation and international agreements

16.3 Promote the rule of law at the national and international levels and ensure equal access to justice for all

16.4 By 2030, significantly reduce illicit financial and arms flows, strengthen the recovery and return of stolen assets and combat all forms of organized crime

16.5 Substantially reduce corruption and bribery in all their forms

16.6 Develop effective, accountable and transparent institutions at all levels

16.a Strengthen relevant national institutions, including through international cooperation, for building capacity at all levels, in particular in developing countries, to prevent violence and combat terrorism and crime

Key Performance Indicator (KPI):

16.3.3 Proportion of the population who have experienced a dispute in the past two years and who accessed a formal or informal dispute resolution mechanism, by type of mechanism

16.4.1 Total value of inward and outward illicit financial flows (in current United States dollars)

16.6.2 Proportion of population satisfied with their last experience of public services

16.10.2 Number of countries that adopt and implement constitutional, statutory and/or policy guarantees for public access to information.