Start here: What is an Escrow?
What is a User Escrow?
When you trade with Arwen, you don’t need to deposit your coins at the exchange. Instead, you lock your coins in an on-blockchain User Escrow. Once your User Escrow is confirmed by the blockchain, your coins are locked and can only be used to back trades on this specific exchange. Once you close your User Escrow, the balance of coins that you own in the User Escrow will be released to your wallet.
Each user escrow has an expiry time. If the exchange is behaving normally, you will be able to close this escrow at any time, even before it expires. Closing the escrow will release coins to your Bitcoin wallet.
If the exchange gets hacked or becomes unresponsive, you will be able to close your User Escrow once the User Escrow expires.
You can sell coins from your User Escrow on the exchange's centralized orderbook.
Setting up a User Escrow
When you create a User Escrow, you must select and exchange to trade with, what coin you're selling, the amount of that coin to escrow, and the expiration date of the escrow. You also need to enter a wallet address where you want your coins to be transferred when escrow closes.
Below, we show how to lock 0.03 BTC in an escrow with our testnet exchange “Coinboss” using the Arwen App.
Now you need to fund the User Escrow. This step replaces the familiar step of depositing coins with the exchange.
To fund a user escrow, you just need to send coins to the blockchain address of the escrow. The escrow’s address is shown in the “Fund User Escrow” modal. You can use any wallet to fund a User Escrow and send by whatever method you’d like: scan the QR code or copy and paste the address manually into your wallet application.
Because escrows are funded via an on-blockchain transaction, they will take time to confirm, just like depositing coins at an exchange. Once you've sent your coins to the escrow address, you can wait online for the escrow to confirm (shown by the check-mark below), or simply return to the app later.
In order to trade, you will also need to set up an Exchange Escrow.
Common Questions: