How it Works

Términa Escrow provides a trustless payment infrastructure where funds are held securely until all parties agree on the outcome. Here's how the system works.

Escrow Flow

A typical escrow transaction involves three parties:

• Issuer - Creates the invoice and receives payment
• Payer - Accepts the invoice and deposits funds
• Arbiter (optional) - Resolves disputes if they arise

Step 1: Invoice Creation

The issuer creates an escrow contract on the Casper blockchain with:

• Invoice description and amount
• Payer's wallet address
• Optional arbiter address for disputes
• Optional due date

// Contract deployment
const escrow = new EscrowContract({
  issuer: "0x123...",
  payer: "0x456...",
  amount: 1000_000_000_000, // 1000 CSPR in motes
  description: "Web development services"
});

Step 2: Acceptance

The payer reviews the invoice terms and accepts them. This is an on-chain transaction that records the payer's agreement to the terms.

// Payer accepts the escrow terms
await escrow.accept();
// State: DRAFT → ACCEPTED

Step 3: Funding

The payer deposits the required amount into the escrow contract. The funds are now locked and cannot be accessed by either party until released.

// Payer deposits funds
await escrow.fund({ amount: 1000_000_000_000 });
// State: ACCEPTED → FUNDED

Step 4: Release

When the payer is satisfied with the delivered goods or services, they release the funds to the issuer. This completes the escrow.

// Payer releases funds to issuer
await escrow.release();
// State: FUNDED → RELEASED
// Funds transferred to issuer

State Machine

The escrow contract implements a strict state machine with the following states:

Dispute Resolution

If there's a disagreement between issuer and payer, either party can raise a dispute when the escrow is in the FUNDED state.

Raising a Dispute

// Either party can dispute
await escrow.dispute("Deliverables not as specified");
// State: FUNDED → DISPUTED

Arbiter Resolution

The designated arbiter reviews the case and makes a decision:

• Release to Issuer - Arbiter sides with the issuer
• Refund to Payer - Arbiter sides with the payer

// Arbiter resolves the dispute
await escrow.resolveDispute({
  releaseToIssuer: true // or false for refund
});
// State: DISPUTED → RELEASED or CANCELLED

Note: If no arbiter is specified during escrow creation, disputes can only be resolved by mutual agreement between issuer and payer.

On-Chain Data

All escrow data is stored on the Casper blockchain:

• Invoice metadata (ID, description, amount, dates)
• Party addresses (issuer, payer, arbiter)
• Current state and balance
• Event history for full audit trail

This ensures complete transparency and immutability. All transactions can be verified on the Casper Explorer.