[SDPay | EN] Understand Escrow Transaction on Steem
Escrow Payment Tutorial
Currently, SDPay allows you to purchase or test products using escrow payments.
However, due to a current bug in the latest Steem Keychain, only active keys work at the moment.
(An improved version of Keychain will be released soon.)
What is Escrow Payment?
Escrow payment is a payment method where a trusted intermediary (agent) helps ensure safe transactions.
Regular Payment vs Steem Escrow Payment
Regular Payment:
Buyer 💰 ──────────→ Seller
- Money sent directly
- Hard to get refund if problems occur
- Must 100% trust the seller
Steem Escrow Payment:
Buyer 💰 ──→ [Smart Contract Holds] ──→ Seller
↓
Automatically released after transaction approval/completion
- Steem blockchain's smart contract safely holds the money
- Funds released only when both parties agree
- Agent resolves disputes if problems occur
Meet the Players
1. Buyer (Sender)
- Person sending money
- Person who will receive goods/services
2. Seller (Receiver)
- Person receiving money
- Person who will provide goods/services
3. Agent (Mediator)
- Person supervising the transaction
- Person resolving disputes if they occur
- Works for a fee
Complete Transaction Process (5 Stages)
Stage 1: Start Transaction
What the Buyer Does:
Purchase Product
- Product purchase site (currently only SDPay is supported: https://sdpay.app)
- Specify seller / product amount / quantity and purchase
- Select whether to use escrow payment
- Select escrow agent (currently only etainclub is available, operated by registration)
- Agent fee is paid by the buyer, and both product amount and fee are stored in the escrow smart contract
Deadlines are Set Automatically
- Approval Deadline: Time for seller and agent to agree (SDPay: 7 days)
- Escrow Expiration: Total period agent can intervene (SDPay: 30 days)
Execute Payment
- Money moves to smart contract (temporary holding)
- Not sent to seller yet!
Stage 2: Approval Confirmation ✅
What the Seller Does:
- Click "Approve" button if you agree with the buyer's payment details
- Click "Reject" button if you don't agree → Money automatically returns to buyer
What the Agent Does:
- Review transaction details
- Click "Approve" button if no issues
- Click "Reject" button if issues found → Money automatically returns to buyer
Important!
- Both parties must approve within the approval deadline
- If either party doesn't approve → Automatic cancellation + refund
Stage 3: Transaction Progress 🤝
Once both parties approve, the actual transaction stage begins.
Buyer Options
Normal Transaction Completion
- If there are no problems with the transaction, click "Release" button
- Money transferred to seller
- Agent receives fee
- Transaction complete! 🎉
⚠️ There's a Problem
- Click "Start Dispute" button
- Move to Stage 4 dispute resolution
Seller Options
Cancel Transaction
- Can cancel transaction if seller has a problem (e.g., out of stock)
- If seller cancels transaction, amount is returned to buyer and transaction ends
⚠️ There's a Problem
- If you think there's a problem with the purchase, click "Start Dispute" button
- Move to Stage 4 dispute resolution
Stage 4: Dispute Resolution
When someone clicks "Start Dispute", the agent intervenes.
Agent's Judgment:
Review Evidence
- Buyer's claims
- Seller's claims
- Transaction evidence (all payment transfers, approval records, etc. can be verified)
Decision
- Buyer is right → Click "Return to Buyer"
- Seller is right → Click "Send to Seller"
Result
- Money goes to chosen party
- Agent receives fee (buyer's fee is not returned)
- Transaction complete
💡 Agent Fee:
- Normal transaction: Fee received
- Cancelled transaction: No fee
- Dispute resolution: Fee received
Stage 5: Deadline Expiration ⏱️
What happens when escrow expiration passes?
Automatic Refund:
- Steem blockchain automatically returns full amount to buyer (sender)
- No manual action required
- No agent fee
⚠️ Important:
- Seller and agent must approve before approval deadline (SDPay: 7 days)
- Transaction must be completed before escrow expiration (SDPay: 30 days)
- Transaction automatically cancelled when expired
- Seller cannot receive funds
- Buyer automatically receives refund
📱 Real-World Examples
Example 1: Normal Transaction (Digital Product Purchase)
Scenario: steemit purchases NFT from sdpay for 10 STEEM
Start Transaction (steemit)
- Transfer 10 STEEM as purchase price (transferred to escrow smart contract)
- Choose agent "etainclub"
- Approval deadline: 7 days
- Escrow expiration: 30 days
Approval (sdpay, etainclub)
- sdpay: Check conditions → "Approve" ✅
- etainclub: Check content → "Approve" ✅
Transaction Progress
- sdpay transfers NFT to steemit (manual)
Complete (steemit)
- Confirm NFT received
- Click "Release"
- sdpay +10 STEEM, etainclub +0.1 STEEM (fee)
- Transaction complete! 🎉
Example 2: Dispute Occurs (from Example 1 situation)
Start Transaction (steemit)
- Transfer 10 STEEM as purchase price (transferred to escrow smart contract)
- Choose agent "etainclub"
- Approval deadline: 7 days
- Escrow expiration: 30 days
Approval (sdpay, etainclub)
- sdpay: Check conditions → "Approve" ✅
- etainclub: Check content → "Approve" ✅
Problem Occurs
- sdpay transfers NFT
- steemit receives it but it's different from product description (e.g., different rarity)
Start Dispute (steemit)
- Click "Start Dispute"
- Submit evidence as comment on product post
Mediation (etainclub)
- Review evidence
- Determine steemit is right
- Click "Return to Buyer"
- steemit +10 STEEM, etainclub +0.1 STEEM (fee)
Frequently Asked Questions (FAQ)
Q1: How do I choose an agent?
A:
- Choose trusted users with high reputation
- Check agent recommendations in the app
- Review agent's past transaction history
Q2: How much are the fees?
A:
- Fees vary by agent (usually 1-5% of transaction amount)
- Fees displayed before starting transaction
- Fee only charged for normal transactions or dispute resolution
- No fee for cancelled transactions
Q3: What happens if I miss the approval deadline?
A:
- Transaction automatically cancelled
- Full refund to buyer
- No fees charged
Q4: What happens to money after escrow expiration?
A:
- Steem blockchain automatically returns full amount to buyer (sender)
- No manual action required
- Transaction automatically cancelled
Q5: What if dispute isn't resolved?
A:
- Agent makes final judgment
- Important to resolve within escrow period
Q6: What if agent isn't fair?
A:
- Agent selection is crucial!
- Choose high-reputation agents
- Check past transaction records
- Refer to community reviews
Q7: I want to cancel the transaction
A:
- Before approval: Seller or agent clicks "Reject"
- After approval: Seller clicks "Return to Buyer"
- During dispute: Agent selects "Return to Buyer"
- After expiration: Buyer clicks "Take Funds"
🎯 Key Summary
Escrow is a Safety Net
- Steem's built-in smart contract holds the money
- Released after mutual agreement
- Agent resolves disputes. Choosing the right agent is crucial.
Three People Work Together
- Buyer: Person sending money
- Seller: Person providing service
- Agent: Person supervising transaction
5-Stage Process
- Start → Approve → Transact → (Dispute) → Complete
Respect Deadlines
- Check approval deadline
- Check escrow expiration
Agent Selection is Critical
- Check reputation
- Review past records
- Refer to community reviews