This type of transaction allows users to exchange crypto assets to fiat or any other material assets that are available on the ESCB exchange platform.
The difference is that this sort of trade is carried out offline, counterparties cannot specifically know about the trade, only about the time of execution. This type of trade demands an escrow, only from one side, the counterparty must complete all expected actions by agreement for closing such a trade.
For example, let us consider an exchange process for BTC_JPY. In this case, Alice wants to buy 1 BTC for 1 000 000 (1M) JPY, Bob creates a sell limit order with parameters: 1 BTC as the Quantity and the Limit Price at 1M, Alice creates a buy limit order with parameters: 1 BTC as the Quantity and the Limit Price at 1M. When the matching engine is faced with this order it creates the trade with deferred status, as opposed to the typical closed status. In this status, no one asset is transferred until it is actioned. ESCB exchange platform creates a Talk channel for such trades, we have described this service in our earlier articles.
The key aspect is security in providing such a trade. Bob, who owns crypto assets, will wait until the transfer of external assets from Alice and only after this moment will confirm trade.
After this confirmation escrow will transfer to the counterparty 100% of the value. Before sending external assets Alice has the option to refuse this deal. Then escrow will return to Bob 100% of the value.
But what happens if Alice could only transfer 50% of the deal (or any part thereof) of the agreement amount due to a bank issue? This is when counterparties can ask for arbitration and that will resolve any disputes. The typical escrow deal can be closed without any 3rd party intervention but when a counterparty sees some suspicious offer or action and are faced with a force majeure, he/she can ask arbitration to close such a deal in a particular mode. In such cases, the arbitration will participate in Talk and will make a decision after listening to both sides. The trade will be decided by arbitration after a dispute resolution.
Orders from a trade which has been resolved will not be created additionally. After this moment such trades will have a closed status and will be seen on tickers and trade feed as basic trades.
The main concepts for deferred trades:
Only one person from counterparties needs to call for arbitration.
Only if arbitration is used, the current Talk messages will be accessible for exploring.
Any messages and files will be encrypted by channel identity.
Any user can set up a welcome message with some conditions and information about accepted payment methods or any other financial information.
Any KYC procedures must be processed by counterparties, ESCB platform is not responsible for any risks related to counterparties rights on any assets that can be involved in an exchange. As a method of confirming any rights on assets, a user can demand the counterparty to provide a picture with the current financial data including a credit/debit card with the first 4 and last 4 numbers hidden, signed by the counterparty
The sandbox mode is not used on the blockchain. For production environment we will be using HMW smart contract, this will avoid any possible scam schemes.
For the production environment, a rating system will be available to use based on the blockchain. This will allow for trusted trader status.
P.S
For the 20 days in the sandbox testing mode 2 084 871 orders were tested, 771 557 trades with 1 138 instruments. The next step in our roadmap is the preparation of publishing the open source. We hope that this will happen during these coming weeks.