OpenEscrow

OpenEscrow is a minimal, milestone-based decentralized escrow system built on Shardeum.
It enables transparent, trustless escrow settlement using smart contracts, while preserving privacy for sensitive milestone and dispute data using Inco.

APP HOSTED LINK: https://openescorwclient.vercel.app/

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🚀 Problem Statement

Traditional escrow systems for freelance and contract-based work:

• Depend on centralized intermediaries
• Charge high platform fees
• Require trust in opaque dispute resolution
• Expose users to custody and censorship risks

On the other hand, fully on-chain escrow systems often:

• Leak sensitive business data publicly
• Are overly complex and hard to audit

OpenEscrow solves this by cleanly separating settlement logic and privacy-sensitive decision-making.

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🧠 Core Idea

• Shardeum (Blockchain Layer)
  Handles transparent fund locking, milestone enforcement, and settlement.

• Inco (Privacy Layer)
  Handles confidential processing of milestone evidence and dispute context.

This separation ensures:

• Trustless and auditable fund movement
• Privacy for real-world business data
• Minimal and explainable smart contract logic

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🏗️ Architecture Overview

Buyer / Seller | v Frontend (React + MetaMask) | | Public settlement calls v OpenEscrow Smart Contract (Shardeum) ^ | | Confidential computation | Inco Confidential Compute

• The smart contract never processes private data
• Inco never controls funds
• Each layer has a single, well-defined responsibility

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⛓️ Blockchain Network

• Network: Shardeum EVM Testnet
• Chain ID: 8119
• Currency: SHM

Shardeum was chosen for its EVM compatibility, low fees, and suitability for scalable dApp experimentation.

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📜 Smart Contract

Contract Name

OpenEscrow.sol

Deployment Address

0x79333add32954821FE9Df4b9A81fC1AD3AF3C47E

👥 Roles

• Buyer
  • Deploys the contract
  • Funds the escrow
  • Approves milestones
  • Can raise disputes
• Seller
  • Receives funds only after milestone approval
  • Cannot withdraw funds unilaterally

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🔄 Escrow Lifecycle

1. Deployment
   • Buyer deploys the contract
   • Seller address and milestone split are locked on-chain
2. Funding
   • Buyer funds the escrow with SHM
   • Funds are locked inside the smart contract
3. Milestone Release
   • Two milestones: Design and Development
   • Split is configurable (e.g., 40% / 60%)
   • Buyer explicitly approves each milestone
4. Completion
   • All funds are released to the seller
   • Escrow is marked as completed
5. Dispute
   • Buyer can raise a dispute
   • Remaining funds are frozen permanently
   • No automatic refunds or arbitration (intentional MVP scope)

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🔍 Smart Contract Design

Key properties:

• No admin or owner privileges
• No automatic fund transfers
• No off-chain dependency
• Minimal state machine

Core variables:

address buyer;
address seller;

uint256 totalAmount;
uint256 releasedAmount;

uint256 designPercent;
uint256 developmentPercent;

enum State { AWAITING_PAYMENT, FUNDED, COMPLETED, DISPUTED }

The contract is intentionally minimal to:

• Reduce attack surface
• Improve auditability
• Ensure a reliable hackathon demo

🔐 Inco Integration (Privacy Layer)

Why?

While escrow settlement must be transparent, not all data should be public.

• Sensitive data evidence
• Dispute explanations
• Deliverable context Publishing this data on-chain would permanently expose private business information.

How Inco is Used

OpenEscrow integrates Inco as a confidential computation layer:

1. Users submit sensitive milestone or dispute data privately
2. Inco processes this using confidential compute
3. Inco returns a public signal to trigger on-chain escrow actions
4. Escrow smart contract remains unchanged
5. Sensitive data never touches the blockchain

Design Principle
Settlement must be public. Decisions can be private.
This allows OpenEscrow to combine trustless settlement with real-world privacy needs.

Demo Flow

Happy Path

1. Buyer connects wallet
2. Buyer funds escrow
3. Buyer approves development milestone
4. Buyer approves development milestone
5. Seller receives full payment

Dispute Path

1. Buyer funds escrow
2. Buyer raises dispute
3. Funds are frozen on-chain
4. Dispute context handled privately via Inc

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⚠️ Scope & Limitations (Internal)

This project is a hackathon MVP, not a production system.

Not included by design:

• Refund mechanisms
• Time-based auto releases
• Governance or DAO extensions

These are planned as future MVPs.

🚀 Future Scope

• Multi-milestone escrow contracts
• Inco-powered dispute resolution
• Cross-chain escrow

🔧 Tech Stack

• Smart contracts: Solidity (EVM)
• Blockchain: Shardeum (EVM)
• Frontend: React + ethers.js
• Privacy Layer: Inco (confidential compute)

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✨ Conclusion

OpenEscrow demonstrates how:

• Smart contracts can replace centralized escrow platforms
• Confidential compute can protect sensitive business data
• Clean separation of concerns leads to safer web3 applications