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Glossary Term

Escrow

Escrow is a secure, intermediary mechanism—often established via smart contracts on Solana—that temporarily holds funds or assets during a transaction until specific, predetermined conditions are met, ensuring trustless exchanges between parties.

Beginner
Technology
Crypto Terminology

Escrow: what is it?

Examples

  • 1

    Solana NFT marketplaces using escrow to hold NFTs until payment is made.

  • 2

    OTC (Over-the-Counter) decentralized swaps featuring escrow contracts for token trades.

  • 3

    Decentralized lending/borrowing protocols that hold collateral funds in escrow until loan terms are satisfied.

Common Use Cases

P2P token trades where both parties want assurance of fair settlement.
NFT auction platforms where NFT is locked in escrow until the winning bidder meets payment.
Crowdfunding or multi-signature wallets requiring group consensus for fund release.

Pro Tips

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Always use audited, reputable smart contracts or DeFi protocols for escrow transactions on Solana.

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Double-check contract terms and required conditions before initiating an escrow-based transaction.

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Understand how disputes (if any) are managed in escrow setups—some protocols automate reversal/refunds if conditions aren’t fulfilled.

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Be aware of Solana’s speed, which typically ensures escrow withdrawal or fulfillment happens in seconds.

Frequently Asked Questions

Related Terms

Node
Proof of Stake (PoS)
dApp (Decentralized Application)
TPS (Transactions Per Second)
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