Overview
Escrow is a trusted arrangement that holds assets until contract conditions are met. In crypto, smart contracts act as automated escrow. It reduces counterparty risk in transactions.
How It Works
Funds are locked in an escrow contract and released when predefined conditions are satisfied. This can be automatic or require signatures. It protects both buyer and seller.
Why It Matters
Smart-contract escrow enables trustless trades, payments, and marketplaces. It removes the need for a trusted third party. Its logic must be correct to avoid exploits.
Related Concepts
Escrow relies on Smart Contracts and Multisig. It is used in trading and marketplace contexts.