Subjective

Screenshots

Problem Statement

Peer-to-peer (P2P) transactions platforms, such as Venmo, Zelle, and Paypal are quick and easy, but they have no accountability mechanisms to protect users from frauds and scams. Additionally, there's little you can do if you pay for a product or service that turns out to be unsatisfactory. This is a big problem given that 1 in 5 Americans who have used P2P services has had an issue like this.On the other hand, payment services which reduce buyer and seller risk, such as Escrow.com, are centralized and work through super high fees. This makes them unattractive for most P2P transactions.This is where Subjective comes in. Subjective is a protocol that uses game theory to provide accountability mechanisms for every P2P transaction. But how does it work?Just like Venmo, I can use Subjective to send crypto through an easy to use UI. All I need to do is set the value of the transaction, the address I’m interacting with (e.g. the seller's id), and a brief description of the transaction (e.g. bike sale). At the moment of transfer, a smart contract with a unique id is generated, which ties both users: the buyer and the seller. This time, if there is a problem (e.g. the bike bought turns out to be broken), I can access the contract through the id, see the transaction details and submit a price renegotiation. The seller can see this adjustment request and they can accept it, reject it, or submit a counter-proposal.Now, 1 of 2 things can happen and this is where game theory will make sure that both parties reach the best possible outcome.If both parties reach an agreement - “Yeah I did sell him a broken bike, so I should give him a price discount”, the contract is sealed and the buyer receives a partial refund.However, if both parties do not reach an agreement, both will be subject to a fine. The seller will be paid the buyer’s last bid minus the fine (which is a percentage of the deal value) and the buyer will pay the seller’s last bid plus the fine (see example from pitch deck).This is very important because, analogous to the prisoner's dilemma from game theory, both players will be worse off should they choose to be greedy and not reach a common ground. On the one hand, this keeps the seller accountable because they must sell their product or service at a fair price. On the other hand, this also keeps the buyer accountable because it prevents them from making outlandishly low bids for fear that the seller just refuses the price renegotiation.The decentralized App makes money by securing the difference in bids whenever there is a disagreement. Part of these funds would go to those running the dApp and the other part would be managed by a DAO.

Solution

Our project is a UI for P2P transactions. So our main focus was to keep it as simple and clean as possible. Besides HTML, CSS/Bootstrap, and Javascript, we used libraries to make the blockchain connections, such as web3.js, ethers.js, and the Metamask Provider API. We deployed our contract in the SKALE network, making it easier to deploy our smart contract, faster, and with no gas fees. What we believe is most notable in our project and we also received positive feedback from mentors, is our game theory model, which allows for P2P to reach an agreement in a dispute resolution through Nash Equilibrium. What I was more impressed about, was our ability to reduce the UI to just the essentials with as little friction as possible. And I was also impressed with the amount of mentoring we received, which was fundamental to making a lot of progress in just 36h and to give us motivation to continue with the project!