Disputes may arise between the parties. If the client is not satisfied with the job performed by the contractor, or if the contractor believes the client is refusing to pay for a job done, either party may freeze the escrow.

Freezing the escrow means that the funds will remain irreversibly locked in the smart contract for 12 months, before being released back to the client’s wallet address. The contractor will not be paid, but the client will also be penalized on the time value of the frozen funds.

Our current approach to dispute resolution is a simple, and cost-effective one. By imposing costs on all parties in the event of a dispute, we aim to incentivize both parties to: (i) reach an amicable settlement, and (ii) only engage with trustworthy counterparts in the first place.

Admittedly, this approach can reduce, but not eliminate the potential for abuse. In the future, we may offer arbitral options for dispute resolution. But those are likely to incur additional costs on both disputing parties.