Escrow accounts provide a means of simplifying complex transactions. By making use of third parties to ensure completion of the task, chances of errors are greatly reduced.
Automated process
In platforms like Feelium, escrow services are fully automated. On purchasing Feelium tokens, users are provided with an optional escrow account. Smart contracts are used to regulate the workings of escrow accounts and their protocols followed to validate terms of the trade. Feelium tokens are purchased for fiat money and uploaded into the escrow account. Once the seller validates the buyer’s terms, the trade process begins. Money is released from the escrow account when the buyer is satisfied with the service or product. This is the simplest form of an escrow transaction.
Complex buyer-seller transactions.
Complexity arises when there are more than two transactional parties involved. Let’s look at an example consisting 4 parties to understand the escrow process.
‘A’ wants a service from ‘B’. ‘B’ outsources the task to ‘C’. ‘C’ uses product delivery from ‘D’ to complete the service for ‘A’. Does this sound complicated? Well, this is how most transactions in the real world work. Feelium simplifies this complicated process.
‘A’ purchases Feelium tokens and obtains an escrow account. Making use of the free smart contracts on Feelium, he/she drafts a reasonable contract asking for services from ‘B’.
‘B’ involves ‘C’ in the process by adding the clause of a proof of work from ‘C’.
‘A’ agrees to this on the condition that ‘B’ validates any service from ‘C’.
‘C’ adds the clause that the service will be completed using a product delivered by ‘D’.
‘D’ delivers the product and uploads a proof of delivery.
After this, the whole process works like a wheel with each party validating the service of the other. No money will be released until the premium buyer, ‘A’, signs a confirmation and uploads it to the escrow account. The escrow account protects ‘A’s money until he/she is satisfied. If any one of the 4 transactional parties are not satisfied, for example, if the ‘D’ is not paid the amount for delivery, the escrow wheel remains on hold until the issue is resolved.
There could also be a pre-determined time clause which would ensure that if the chain is broken, money invested by each party is delivered back to them within a period of time. Thus, no one incurs a loss.
Verification of work
In an escrow service, verification is required from both parties for the process to end. Feelium works this out by using a notification service when each part is completed, triggering a response from the parties involved.
Feelium generates a QAT or Quick Access Token to access the platform. Feelium has a double verification attached which confirms the user’s intention by asking for the QAT before funds are released or sent. If the contract is breached, the Feelium platform assumes a buyer or seller default and nullifies the process. Funds are released back to the concerned parties as mentioned above.
Third party involvement
In traditional escrow services, a firm or licensed party stands as a third party, monitoring the progress of the task. Feelium escrow service works in the same way, only it is completely digitalised. There is no danger of the escrow firm concluding in favour of the client in order to continue business with said client. Feelium escrow services are trust-free and work like a well oiled machine. Sign up for more information and services on www.feelium.co.
