The world has become increasingly better connected and digital first, with it possible to video chat, game or transact money with someone you do not know thousands of miles away at ease. However, not all facets of modern life have become easier to achieve across borders or as digital friendly.
One of the industries that has remained more local than most is the legal sector. This is at least in part owing to the variances in legal structures and application of law across different jurisdictions. Furthermore, automated or robo-legal advice remains in relative infancy. This means that all too often there are high costs and time delays for two parties seeking to enter an agreement. And, even when such an agreement is formed, it can prove difficult for a complainant from one country to seek recourse against an accused party domiciled in another, particularly when many individuals and corporations are sheltered by protective nations.
PAID Network will allow individuals and firms to save both time and resources, circumvent costly intermediaries, and better secure themselves in the event of a dispute. PAID is a platform through which multiple entities can sign templated but tailored Smart Agreements, where funds can be held in escrow or parties can take out insurance in the event of dispute and where issues can be arbitrated by the network of users that make up the protocol. Through doing so, we can better protect parties that are currently vulnerable to agreements that offer no real protection in the event of a malicious actor and eliminate efficiencies for individuals, crypto firms and traditional firms alike.
A situation that pleases few
There are numerous issues with how contracts are agreed upon, implemented, and enforced at present. Chief amongst these are:
Out of reach for most people
Most people are either unable or would not know how to access legal advice. Drafting, executing, and enforcing legal contracts is complex, and requires specialist expertise, particularly for cross-border agreements. This means that the majority either would not seek such advice or may utilize someone ill-equipped to advise on such matters.
Lack of recourse
Even when such agreements are properly made, if one party decides to break it, there is often limited recourse for the aggrieved party. There are several reasons for this, including the difficulty in chasing down individuals or firms from a different country and the expense of seeking damages. Furthermore, the slowness of the legal system may mean any resolution comes too late, or that the aggravating party is unable to provide restitution. All too often legal victories are costly and ultimately pyrrhic.
Even when the process works as it should, it can be slow. Because of the need to take advice, the individual or firm is forced onto the timeline of the advisory/legal firm. This can be frustrating, and also means time is expended trying to chase the advisor/lawyer to complete the work — especially if it is a job that is deemed a low priority.
How PAID eliminates these inefficiencies
PAID will solve these issues in two core ways.
1. SMART Agreements
The first issue surrounds the complex nature of agreements and the time and cost to draft and implement these. PAID’s SMART Agreements are intentionally written in a simple manner, designed to mean that a) the parties signing them understand what they are agreeing to; and b) that in the event of a dispute, arbitrators can also easily conclude what was agreed upon.
2. A decentralized, borderless and quick system
The differing legal standards applied across countries, as well as the unequal nature of fairness applied by varying judiciary systems, is eradicated by making agreements signed on PAID subject to two out of three arbitrator’s votes. This means that there is no need to pursue counterparties through the judiciary system, but rather disputes can be swiftly settled by community members with a significant stake in PAID itself. These arbitrators, selected at random each time, will receive a fee for their work — but it will be a fraction of the cost of traditional methods, and be settled in days rather than months or years.
Through the tandem of easy to create and understand agreements, and a system designed to resolve disputes quickly and cheaply, we lower the barrier to entry for everyone. PAID will allow people who previously would not have been able to set up formal contracts to do so, thus protecting more people from being exploited.
A typical user journey is detailed below:
Figure 1: Simplifying contracts
A wider platform
While this is an ambitious goal on its own, we are constructing a wider ecosystem to meet the needs of users. For example, as previously referred to, parties entering into agreements will be able to put up funds for escrow to provide guarantees that the terms of the contract will be met. These escrow smart contracts can be unlocked by the counterparty once the conditions are met (if not, then it triggers the aforementioned arbitration process). In addition, the funds for escrow could even be borrowed from PAID token holders, allowing token holders to receive interest for the service.
Entities will also be able to insure against counterparties failing to fulfill on contract terms. This will work through a decentralized insurance pool, in which PAID token holders can stake and, again, receive payments for providing this service. These insurance premiums will vary on a case by case basis according to the varying risk.
Much of this will be facilitated through a reputation-based system. Each user will have a PAID profile with a reputation score that will be based upon the feedback they receive from parties with whom they conduct business. To prevent malicious actors from starting new profiles each time they get poor feedback, users will have to go through digital biometric identity verification, and to add additional credibility they can link their social media profiles including Linkedin, Facebook, and Instagram.
All of this will be underpinned by the PAID token. PAID token holders will be able to, amongst other things, stake tokens, act as an arbitrator, loan for escrows, and offer insurance coverage. Additionally, and unlike many protocols, PAID is envisioned as a profit-generating network that will return value to its stakeholders. Revenue generated through the platform will be partially distributed back to core stakeholders, being used to burn tokens and being sent to holders proportional to holders, with the remaining balance sent to treasury for ongoing operating expenses.
A new way of doing business
PAID represents a change in how business can be enacted between two parties that do not trust one another. However, the infrastructure we are building will be capable of supporting a wide range of use cases and other potential crypto-focused services that we will detail more about later. For now, we are hard at work building our Polkadot-based project, including preparing for the launch of our alpha product and ensuring it is rigorously audited.
If you would like more details on our current private sale round, or would like to be kept informed on our forthcoming public sale of PAID, then please complete the linked form.
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