Technical Whitepaper

1. Introduction

This document describes a secure, decentralized escrow system implemented as an Ethereum smart contract. The protocol enables trustless peer-to-peer transactions with built-in dispute resolution while maintaining full transparency through blockchain verification.

2. Core Features

• Secure fund custody with time-bound protections

• Cryptographic term verification using keccak256 hashing

• Automated fee distribution (3% transaction fee)

• Multi-party confirmation requirement

• Admin-mediated dispute resolution

• Non-custodial balance management

• ERC-20 token compatibility

3. System Actors

3.1 Participants

• Buyer: Initiates transactions by depositing funds

• Seller: Receives funds upon successful completion

• Admin: Privileged role for dispute arbitration and fee collection

3.2 Smart Contract Components

• Escrow vault: Holds funds until conditions are met

• Deal registry: Trades with associated metadata

• Balance ledger: Tracks owed amounts per user/token

• Term verification: Stores hashed agreement terms

4. Deal Lifecycle

4.1 Creation Phase

1. Parties agree to terms off-chain

2. Buyer submits:

   • Seller address

   • ERC-20 token address

   • Deposit amount

   • keccak256 hash of terms

3. Contract:

   • Deducts 3% fee

   • Stores remaining amount in escrow

   • Generates unique deal ID

   • Records terms hash immutably

4.2 Execution Phase

• Mutual Acceptance Path:

  1. Both parties confirm acceptance

  2. Funds release to seller

  3. Deal marked complete

• Dispute Path:

  1. Either party flags dispute

  2. Admin arbitrates resolution

  3. Funds distributed per ruling

• Timeout Path (new):

  1. 30-day inactivity period

  2. Eligible party can trigger expiration

  3. Funds return to buyer

5. Security Architecture

5.1 Fund Protection

• Reentrancy guards on all transfers

• Segregated balance accounting

• Time-locked expiration as fail-safe

5.2 Term Integrity

• Cryptographic hashing of agreements

• On-chain hash storage

• Immutable record per deal

5.3 Access Control

• Participant-only modifiers

• Admin-restricted arbitration

• Self-custody withdrawals

6. Technical Implementation

6.1 Storage Structure

struct Deal {
    address buyer;
    address seller;
    uint256 amount;
    uint256 timestamp;
    bool disputed;
    bool resolved;
    bool buyerAccepted;
    bool sellerAccepted;
    bytes32 termsHash;
    address tokenAddress;
}

mapping(uint256 => Deal) public deals;
mapping(address => mapping(address => uint256)) public bankroll;

6.2 Key Functions

• createDeal(): Initiate new escrow

• acceptDeal(): Confirm participation

• disputeDeal(): Flag disagreement

• resolveDispute(): Admin arbitration

• expireDeal(): Timeout handler

• withdraw(): Claim available funds

6.3 Event Tracking

event DealCreated(uint256 dealId, address buyer, address seller...);
event DealAccepted(uint256 dealId, bool buyerAccepted...);
event DealDisputed(uint256 dealId, address by);
event DealResolved(uint256 dealId, bool favorBuyer...);
event DealExpired(uint256 dealId);

7. Economic Model

• Fixed 3% transaction fee

• Fee accumulation in admin bankroll

• No recurring costs

• Gas-efficient dispute resolution

8. Integration Guide

8.1 For DApps

1. Encode terms as UTF-8 string

2. Generate termsHash:

   const termsHash = ethers.utils.keccak256(ethers.utils.toUtf8Bytes(termsText));

3. Call createDeal() with hash

8.2 For Users

• Verify terms hash matches agreement

• Monitor deal status via events

• Withdraw funds to self-custody wallet

9. Compliance Features

• Transparent audit trail

• Non-custodial design

• Immutable records

• No admin fund access beyond fees

Appendix A: Security Audit Summary

The contract implements industry-standard protections including:

• Reentrancy guards

• Input validation

• SafeERC20 transfers

• Timeout safeguards

• Privilege separation

Appendix B: Sample Term Structure

Recommended term format:

1. Delivery Timeline: [date]
2. Quality Standards: [specs]
3. Inspection Period: [days]
4. Jurisdiction: [location]
5. Arbitration: [process]