SmartPiggies
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  • Introduction
  • Getting Started
    • Accessing Testnet
    • What is a SmartPiggy NFT?
      • Background: What is a financial option?
    • Where do Piggies live?
      • Arbitrum Introduction
      • How to use Arbitrum
    • Parts of a Piggy
    • An example Piggy
    • Creating your first Piggy
      • Create a Piggy
      • Request a Piggy
  • Lifecycle of a Piggy
    • Approve Collateral
    • Auction
    • Buy
    • Bid
    • Finalize
    • Clear
    • Settle
    • Claim payout
    • Burn - Reclaim collateral
  • Advanced Functions
    • Transfer
    • Split
  • The User Interface
    • Explore Markets
      • Table Dropdown
    • My Dashboard
      • Table Dropdown
    • Wallet
      • Approving Collateral tokens
      • Approving Oracle tokens
      • Claiming payouts
      • Supported wallets
  • Oracles
    • Available oracles
    • Using your own oracles
    • SmartPiggies and Oracles
  • Arbitration
    • The (optional) Need for Arbitration
    • Setting an arbitrator
    • The Arbitration Process
    • Arbiter Reputation and History
  • FAQ
  • FAQ
  • Developers
    • Contracts
      • Calling the contracts directly
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  1. Arbitration

The (optional) Need for Arbitration

Assigning an Arbitrator is optional, however, as no data source that is external to the network can be guaranteed to be correct or incorruptible, it may be necessary in some cases to introduce a trusted third party arbitrator into the settlement process of a SmartPiggies option, particularly if that option contains a large amount of collateral.

Examples of a data source failure that would warrant arbitration:

  • Human error

  • Corrupt data records

  • Corrupt reporting authorities

  • Infrastructure failure

  • Price manipulation

Employing an Arbitrator introducing it's own risks. An individual entering a contract should carefully consider whether an Arbiter is trustworthy as the assigned Arbiter could potentially collude to force the contract to settle in the counterparty's interest.

By entering a contract with an assigned Arbiter, a user is implicitly agreeing to the Arbiter's future actions or inactions.

In order to assist in a user's decision to agree to an assigned Arbiter, SmartPiggies application has a built in inspector to allow users to review the past behavior of an assigned arbiter.

PreviousSmartPiggies and OraclesNextSetting an arbitrator

Last updated 3 years ago

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