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How escrow protects a trade

What actually happens to the crypto between opening and closing an order.

P2P · 3 min read

Escrow solves the oldest problem in trading between strangers: who goes first?

The sequence

  1. The order opens and the seller's crypto is locked.
  2. The buyer sends the money directly to the seller.
  3. The seller confirms it arrived and the escrow releases.

What escrow can't do

Escrow protects the crypto, not the bank payment. If a buyer pays with stolen funds and the bank later reverses the transfer, the seller may still lose out. That's why name matching and irreversible payment methods matter so much.