Status: Accepted Date: 2026-03-24
Traditional educational funding often disburses total scholarship amounts upfront. In a decentralized environment, this creates a high risk of "capital flight" where recipients exit the platform after receiving funds without completing the curriculum.
We have implemented a Milestone-Based Escrow system using Soroban smart contracts. Funds are locked in a contract and released in tranches only upon cryptographic proof of milestone completion.
- Incentive Alignment: Students remain motivated to complete the entire course to unlock the full grant.
- Capital Efficiency: Unclaimed funds from dropped courses can be programmatically returned to the treasury or reallocated to active students.
- Risk Mitigation: Limits the loss per student in case of fraud or low engagement to a single milestone's value.
- Transaction Overhead: Requires multiple on-chain interactions (one per milestone) instead of a single disbursement.
- Complexity: Requires a robust verification layer (ADR-004) to trigger the releases.