Escrow smart contract

An escrow smart contract serves as an impartial and automated intermediary that holds and manages assets, funds, or digital items until specific conditions are met. The primary purpose of an escrow smart contract is to facilitate secure and trustless transactions between two parties without relying on a traditional trusted third party, such as a bank or escrow service. PulseMarket uses an escrow smart contract exclusively during auctions to provide a fair process. The escrow smart contract plays a crucial role in ensuring a secure and transparent process for both buyers and sellers.

During an NFT auction on PulseMarket, the NFT is held in an escrow smart contract until the auction concludes. Here's how it works:

Listing the NFT: The seller initiates the auction by creating a listing for the NFT on the marketplace, specifying the auction duration and relevant details.

Escrow Smart Contract: As soon as the auction starts, the NFT is transferred to an escrow smart contract. This smart contract acts as a neutral intermediary, securely holding the NFT until the auction ends.

Bidding: Potential buyers place their bids on the NFT during the auction period, and all bids are transferred to the escrow smart contract. The highest bidder wins when the auction ends.

Ownership Transfer: With both the NFT and the winning bid securely held in the escrow smart contract, the ownership transfer process is triggered. The smart contract then transfers the NFT to the winning bidder's wallet, and the winning bid amount is transferred to the seller. Any bids that were not successful will be returned from the escrow to the respective bidders.

Using an escrow smart contract ensures that the seller cannot access the winning bid amount until the auction is successfully completed, preventing potential scams or unfair practices. Likewise, the buyer can be confident that they will receive the NFT once their winning bid is accepted, as the NFT remains locked in the escrow contract until then.

The use of an escrow smart contract adds an extra layer of trust and security to the auction process on PulseMarket, making it a popular mechanism for conducting transparent and fair auctions. It provides both buyers and sellers with peace of mind during the trading process, contributing to a more reliable and efficient marketplace environment.