crypto

Crypto has no banks and no usual security guarantors. Then how to ensure the integrity of a transaction between two unfamiliar participants? 

▪️ Escrow is a system of escrow in which assets are temporarily held by a third party (or smart contract) until the agreed terms of the transaction are met.

Simply put, until one party fulfills its obligations - no one gets the money.

Instead of a traditional “middleman” escrow is often implemented through a smart contract, which:

🔴 accepts the cryptocurrency for storage;
🔴 checks that the conditions are met;
🔴 automatically transfers funds to the right party or returns them to the sender in case of a dispute.

Without escrow:
- seller can receive payment and disappear,
- buyer can receive token and “forget” to transfer money.

Such mechanisms are used where it is necessary to ensure the integrity and security of the transaction:

- P2P cryptocurrency exchanges
- NFT-marketplaces
- IDO / ICO / Launchpad
- Freelancing and DeFi services
- DAO and voting

Escrow reduces the risks of fraud and makes transactions more secure, especially between unfamiliar participants. 

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It's trust implemented through code. In the era of decentralization, it plays the same role as a notary or a bank in the traditional world.