Arbiter Fund

It is important that the protocol has a sustainable method for incentivizing users to act as arbiters when pools are disputed. Whilst it would be possible to take these funds directly from pools as they are resolved through arbitration, this risks incentive misalignment, as it may encourage arbiters to ensure that a disputed pool is resolved in the affirmative in order to receive their arbitration fee from that pool’s funds.

The creation of an arbiter fund is therefore needed to ensure that funds exist to pay arbiters, irrespective of which way they vote when called upon to arbitrate on a disputed pool.

To support this arbiter fund, a percentage of all funds from resolved scenario pools across the life of the protocol will be set aside for this purpose. Additionally, the arbiter fund will initially be seeded with an allocation of SNR tokensThis will help to distribute the token to the protocol’s early adopters, reward positive behaviour, incentivise involvement in arbitration and support this process in the protocol's earliest stages of development.