The Kleros experiment has failed
Founder gone rogue, 51% attacks, perjury
Summary: A Kleros founder has successfully ran a 51% attack in a Kleros subcourt and used it to improperly deny millions of dollars of insurance claims. They had hundreds of eth in the insurance pool, making this a massive conflict of interest. In addition to the attack they also repeatedly spread blatantly false information in those cases, i.e. perjury.
I’ve previously documented the actual attack in this thread:
That thread has on-chain evidence for the 51% attack by linked accounts with hundreds of eth of exposure to the Unslashed insurance pool. One of the addresses linked there purchased the clesaege.eth ENS, suggesting that the attack has been carried out by Clement Lesaege, listed as a co-founder at https://kleros.io/en/about/.
In this post I’ll document the various false claims accounts controlled by Clement have put forward, and several denials of valid Unslashed claims. I’m not going to relitigate cases, just point to the specific lies made. In my view, this represents a serious flaw - there is no mechanism for such lies to be punished. Repeatedly lying to a court would get someone sanctioned and held in contempt, if not worse. In theory, Kleros can be forked and perjurious voters removed, but in practice that seems unlikely.
Case 1170:
Disclaimer: I was involved in this case. While I am trying to stick to the objective facts, I am biased.
Brief summary of the main issue: Insurance was purchased on Apr 1st. The loss being claimed against happened later on Apr 1st and the claim was filed on Apr 6th. Several days after the claim was filed, Unslashed uploaded a new policy that said that there’s a 10 day “waiting period” before insurance can be claimed. This policy was not available publicly at either the time of buying insurance, the event being claimed against, or the claim being filed.
Clement argued, via various accounts, that this document should be taken into account, despite the insurance buyer having never seen it or accepted it. He also falsely claimed that it was available earlier, without offering any evidence: on May 1, his 0x5e7B account made an evidence submission that stated “the event happened at a time where the policy was available”
This false statement influenced the jury, as can be seen by looking at the vote justifications:
In addition to swaying the jury with perjurious claims, Clement also voted to reject this claim with a substantial amount of voting power, over 51% of the vote in several rounds.
Case 1211:
The claimant in this case suffered a 1.6M loss when their UST position got liquidated on Abracadabra. The case is still ongoing, but so far all known Clement accounts have voted against in both rounds.
The justification offered is transparent nonsense: they imply that because the liquidation involved selling UST for MIM, the claimant could have kept the MIM and thereby recovered. However, because the account was underwater, there was no MIM to recover. In fact, it can be easily verified that the account currently still has MIM debt, with no UST holdings. See https://debank.com/profile/0x0A6D97444602B96F7E231e9dD5ecec9251a9cAfe:
The claimant showed proof of their original 1.6M deposit, which got entirely liquidated and therefore lost. As the CTO and co-founder of Kleros, Clement is surely competent enough to figure this out, but is by all appearances simply denying the claim because he can.
Case 1213:
In this case, someone spuriously claimed that sufficient proof of ownership hadn’t been offered. I will just quote from this document extensively rebutting this claim. It simply cannot be said in good faith that there was any uncertainty about ownership. https://ipfs.kleros.io/ipfs/QmeEk24Sr7yFLeCDjLZVkQfrQk6ddN5NCGNUDhvFVqDj8C/1213-2a.pdf
Two Clement controlled accounts voted to reject, with these justifications:
”When the claim was made, no way of verifying the address was provided, therefore the challenge was legitimate. I'm voting to reject in order for the challenger not to be penalized as he is not in fault, if a readjusted claim is made, I will approve it now having seen sufficient evidence.”
”At the time of the claim, no proof were available. Taking into account the state of the world at the time of the dispute, this claim should be rejected and then readjusted.”Note that in 1170, Clement forcefully argued for documents published after the claim was made to be taken into account. While here, he (falsely) said that no proof was offered at the time of the claim and therefore voted to reject this claim.
Update: this case was ultimately accepted after one of Clement’s accounts changed their vote in a later round
I attempted to collect more evidence based on discussions in Discord, but have been banned from the Kleros Discord with no warning or reason given.
I would advise anyone considering using Kleros, or any protocol using Kleros, whether they feel comfortable with the risk of Clement choosing to get involved in their cases given this pattern of behavior. I have heard from several people that were afraid to file insurance claims because of this attack - there’s a substantial chilling effect.
I totally agree to this. Please stay away from Unslashed finance for any kind of insurance and kleros is totally corrupt. They suck and are just manipulating the system the extent they can
Another thieving jew, imagine my surprise.