I have a question about the whitepaper concerning the dispute resolution, especially the frontrunner option :
The default method is to resolve disputes using consensus from other members of the Stox network. The mechanism follows the frontrunner method: the disputing party must place tokens on the line against the oracle report. Anyone in the network can agree or disagree and put tokens on the line as well. The frontrunner is the side (agree/disagree) that has the most tokens on the line so far. If the frontrunner doesn’t change in a period of 24 hours, we have a victory and the dispute is resolved. The victorious side shares all the tokens from the losing side, which is penalized by losing all tokens put on the line. This dispute mechanism can be implemented in a trustless and decentralized way using a dedicated smart contract
What happens if the disputing party has got so many tokens that it makes it too risky to take position against? In this case the other token holder might be financially incentivized to agree with the disputing party, no matter whether right or wrong, because the chances that the disputing party stays frontrunner for 24h are too high, making the whole dispute resolution mechanism unreliable.
Is there anything to prevent this?
On the other hand, could a dishonnest operator place tokens against a rightfully disputing party ? (here again, if the operator had a big amount of tokens, it could introduce bias in the dispute settlement, though in this case i understand why it wouldn't be interesting for the operator : => loss of confidence of the clients => loss of revenues)
Hi, I must admit, your question is very interesting.
The aspect you don't relate to is the publicity of the blockchain. Stox is not like Bitcoin: The operators are well-known and respectable businesses and their reputations are very important to their customers (customers do not understand blockchain matters but they are careful to invest their money in an application known as fraud). We assume that cases of dispute that comes into the frontrunner game will be very rare, because the operators will be very careful not to report to the public wrong results of predications, especially when the spotlight is directed right to them. Hence, the operator has much more to lose than that single game.
So when a dispute gets to frontrunning it will attract a lot of attention, and someone with a very high stakes is not likely to bet with a false bet against an operator since (1) since it's exposured to the public, many people will argue for the truth, and (2) if he wins in such a public confrontation, it will cause STOX to lose of its value and he, as a high stakes Stox holder, will lose a lot of it.