Long are gone the days when online users trusted each other. Today, the ones who trust are the ones who get eventually catfished or scammed and lose their trust in people. This is especially true for cryptocurrency users where transactions are anonymous and irreversible.
To solve this problem, Zenland has built a smart contract escrow platform where anyone can trade directly with each other through escrow contracts.
Cryptocurrency and Escrow
By definition, escrow is a financial agreement between two parties to keep the payment in third-party hands until the terms of the sale are completed. Historically, the term escrow has been used for real estate deals and is often associated with banks, government taxes, and escrow agents.
Yet the appearance of cryptocurrencies has introduced a new era of electronic commerce. Quick and borderless but not entirely trouble-free. While the use of the new digital currency allows over-the-counter (OTC) transactions without a central authority, it often has its price to pay. Internet commerce is full of phishing websites and cyber criminals looking to lay their hands on someone’s wallet.
Much like the banks became the target for robbers, third-party cryptocurrency wallets are a target for hackers.
Altogether, this creates the need for a safer way for cryptocurrency users to do business online.
Escrow Smart Contracts
In the same way, as traditional escrow is centralized, smart contract escrow is decentralized. To see the difference, let’s take a look at the example case.
Mark is an avid Dota2 gamer who often trades Arkana skins. He has two options to choose from:
a) fiat (with a credit card or PayPal);
b) crypto (Bitcoin or other altcoins).
If he is choosing the first option, Mark has to pay a marketplace commission (usually 5%-7%), receive the payment to his internal account and have to meet a minimum threshold before withdrawing to his card/PayPal.
If Mark trades Arcana OTC with cryptocurrency, the trade is faster with no commission but a high risk of “gifting” his skin. Because cryptocurrency transactions are irreversible and anonymous, there is a high risk of delivering the in-game asset but not getting paid, and vice versa.
And this is just one case where escrow smart contracts can make an online deal safer, trustless, and less costly.
It is possible through the use of an escrow smart contract as your private encrypted container that is stored on the blockchain. To this container, only the two parties (a buyer and a seller) can have access with no middleman or central authority involved.
Ready to see how Zenland escrow contracts are changing the peer-to-peer world of electronic commerce?
Zenland Escrow: Step-by-Step
Wondering how this all works for Zenland users? Set your timer for this 2-minute walkthrough guide and let’s get into action! We promise you will learn some pretty interesting concepts and see their implementation.
A user connects Metamask and logs in (No-KYC, no gas fee)
Connecting the MetaMask wallet gives the user its unique ID which is simply a MetaMask wallet address.
This automatically creates a user profile to launch escrow contracts and interact with other users. This is the only identifier for a specific user and no KYC or sign-in is required.
A user creates/approves the escrow agreement (mutual terms)
For the Zenland escrow platform, both users (a buyer and a seller) can fill out a simple contract form. Yet it can only be launched if both parties approve the terms (similar to signing a contract).
Buyer sends approved smart contract to blockchain (contract deployment)
With the click of the mouse, a buyer sends a signed contract to the blockchain network. This is a blockchain transaction that has a gas fee.
Once the buyer confirms the transaction, it is verified by a number of computers around the world and then permanently recorded in the blockchain database under a specific address known as a contract address.
This is seen in the blockchain explorer like Etherscan as contract creation, or in technical terms, contract deployment.
Buyer sends payment to the escrow contract (funds guarding)
Once the contract is entered into the blockchain database, it turns into a blockchain account, a sort of well-encrypted container able to safeguard the payment.
But because these smart containers do not understand a human language but code, users interact with the deployed contract through a specific user interface.
Each interaction sends a specific command, a.k.a. a contract call to enter or retrieve transaction data including the transfer of funds kept inside the contract.
Seller starts and completes the order (a product, service, or asset)
In traditional P2P trade, the seller starts working on delivering a product or service without knowing whether or not the buyer will follow through with the payment.
In most ways, both sides have to trust each other before any deal can be made. In contrast, with smart contract escrow, the deal is made without relying on words but on actions, such as sending payment to the contract or confirming the order fulfillment.
This principle of verifiable trust is the core feature of the trustless escrow ecosystem that Zenland is building.
Buyer accepts the order and releases the payment to seller’s wallet
Once the order has been received, the buyer will have time to inspect the item without paying for it, a.k.a. buyer protection time.
Though, unlike the traditional understanding of it being the measure to protect the buyer, the new understanding of buyer protection time in the context of Zenland is the protection of the integrity of the deal mutually agreed upon in the escrow contract.
To put it another way, this mutually agreed time allows a buyer to inspect every detail of the deal while the seller will have the option to withdraw the payment to his/her wallet if the buyer has neither released payment nor opened a dispute once the time runs out. For clarity reasons, the countdown is run for both sides to see and act accordingly.
If content with the results of the deal, a buyer unlocks the payment from the contract directly to the seller’s wallet address filled in the contract terms. This way, Zenland differs from traditional P2P marketplaces that usually hold up the payment inside user accounts until the minimum payout threshold is reached.
Now, if you like what we are building and feel like it may be time to change the way you do business online, you can try an escrow contract yourself at no service fee. Simply open two different browsers, install the Metamask wallet extension (more wallet integrations are in progress), and simulate the contract flow following the steps we discussed above.
Explore Zenland
💠Official website https://zen.land/
💠 Zenland escrow application https://app.zen.land/
💠 ZENF token page https://token.zen.land
💠 User documentation https://docs.zen.land/
💠 Knowledge base https://learn.zen.land/
💠 Whitepaper https://zen.land/whitepaper.pdf
💠 Telegram group https://t.me/zenlandofficial
💠 Telegram channel https://t.me/zenlandapp
💠 Twitter https://twitter.com/zenland_app
💠 Discord https://discord.com/invite/gXdd8bd6Ez
