UMA Arbitration Policy

The first step to initiate a dispute against an IP Asset is to call the raiseDispute function on DisputeModule.sol. This function will in turn call assertTruth on UMA’s OptimisticOracleV3.sol. To initiate a dispute the dispute initiator will need to post a bond of at least the minimum bond defined by UMA for the selected currency. Note that this bond will be lost if the dispute is deemed not verifiably correct by the oracle.

After this step, the dispute will be “open” to be countered/appealed by other users. If there is no counter/appeal, UMA rules define that the IP will be considered to be infringing.

/// @notice Raises a dispute on a given ipId
/// @param targetIpId The ipId that is the target of the dispute
/// @param disputeEvidenceHash The hash pointing to the dispute evidence - this could be an IPFS CID 				converted to a bytes32 hash. This is the document with the proof that UMA reviewers will potentially read
/// @param targetTag The target tag of the dispute
/// @param data The data to initialize the policy - here you can do abi.encode of liveness, token address 	and bond amount
/// @return disputeId The id of the newly raised dispute
function raiseDispute(
 address targetIpId,
 bytes32 disputeEvidenceHash,
 bytes32 targetTag,
 bytes calldata data
) external returns (uint256 disputeId);

After the raiseDispute call there is a period of time called “liveness” in which a counter dispute/appeal can be submitted. The liveness period is split in two parts: (i) the first part of the liveness period in which only the IP owner can counter dispute/appeal and (ii) a second part in which any address can counter dispute/appeal - which can be done by calling disputeAssertion on ArbitrationPolicyUMA.sol. To counter a dispute the caller will need to post a bond of the same amount and currency that was used by the dispute initiator when raising a dispute. Note that this bond will be lost if the original dispute is deemed to be verifiably correct by the oracle.

After this step, the dispute is escalated and will be reviewed by external party UMA.

/// @notice Allows the IP that was targeted with a dispute to dispute the assertion while providing counter evidence
/// @param assertionId The identifier of the assertion that was disputed
/// @param counterEvidenceHash The hash of the counter evidence
function disputeAssertion(bytes32 assertionId, bytes32 counterEvidenceHash) external;

/// @notice Returns the assertion id for a given dispute id
/// @param disputeId The dispute id
function disputeIdToAssertionId(uint256 disputeId) external view returns (bytes32);

UMA reviewers judge the dispute. On this step the user just has to wait until the UMA reviewers make the dispute judgement. This step could take 48-96 hours.

This step is expected to be automatic as UMA runs a bot that calls settleAssertion which in turn distributes the bonds back to the address that wins the dispute.

1. If nobody submitted a counter dispute then when the liveness period is over, any address can call settleAssertion on UMA’s OptimisticOracleV3.sol.
2. If somebody has submitted a counter dispute/appeal before the liveness period is over, then the dispute is escalated to UMA reviewers who will judge and make a decision on whether the IP is infringing or not. After the decision has been made, then any address can call settleAssertion on UMA’s OptimisticOracleV3.sol.