Escrow Flow
Below is a non-technical flow that illustrates how escrow works.
START: The client posts a job listing. Interested freelancers apply for the job. After reviewing all the received proposals, the client selects the freelancer they wish to work with. Before the work officially begins, the client deposits the agreed-upon budget into Nerwo's escrow (smart contract). This can be the amount mentioned in the original listing or an amount privately agreed upon between the parties. By making this deposit, the client assures the freelancer that the funds have been set aside and will be released upon the completion of the work, thus ensuring a safe and transparent transaction for both parties through Nerwo's smart contract.
Deposit Funds: The client deposits funds into the escrow contract. These funds represent the payment for a service or product that the freelancer will provide. The funds can be deposited in ETH or in an ERC20 token supported by the contract. Once deposited, the funds are locked in the contract and cannot be withdrawn until the freelancer successfully completes the task or until a dispute is opened, and a verdict is received that will release the funds in favor of the winning party.
Pay Freelancer: Once the freelancer has provided the service as agreed, the client can release the funds in favor of the freelancer.
Reimburse Client: If the freelancer is unable to provide the service or product as agreed, they can choose to reimburse the client. This step allows the freelancer to return the funds to the client without the intervention of a referee.
Open a Dispute: If disputes arise between the client and the freelancer regarding the quality of work or other aspects, one of the parties can decide to open a dispute. This step involves an external referee (a third-party protocol called Kleros) who will examine the evidence and decide who is right.
Verdict: Kleros reviews the evidence presented by both parties and issues a verdict. This verdict acts as an oracle and interacts with Nerwo's escrow (smart contract), determining in whose favor the funds locked in the escrow contract will be released.
Who Wins?: Based on the verdict issued by Kleros, the contract determines which party has won the dispute and can therefore withdraw the funds.
Freelance: If Kleros decides in favor of the freelancer, he can withdraw the funds from the escrow contract. This step allows the freelancer to receive payment for their work.
Client: If Kleros decides in favor of the client, they can withdraw the funds from the escrow contract. This step allows the client to be reimbursed for a service or product that was not provided as agreed.
Court refuses to rule: There may be cases where Kleros refuses to issue a verdict, due to lack of sufficient evidence or due to a level playing field between the parties. In this case, the funds are divided equally between the parties.
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