Hey Checkpoint,
Quick question for ya. If/when escrow gets implemented to SR, how will you proceed?
Are you open to using escrow on other markets (not sure if this is OK to ask, answer if you want).
Just speaking as a prospective buyer
Hi,
We will implement escrow at a higher price, as we all know there is always a chance that we will never get these funds. Take as example SR bust, Sheep market scam and so on.
So the FE listing will be cheaper than the escrow listing. We wanted to update our listings on Agora but it's VERY slow. So we didn't completed that.
Perhaps has your team looked into multi-sig escrow? There's quite a few markets that offer this (BlankBank, Cloud Nine, DarkBay, Hydra, TMP come to mind).
It offers better protection to the seller in case of the site trying to pull some shit, however it's not without its flaws.
There's been speculation that markets could potentially lock a vendor out of their account, change the signing key for multisig, and sign the transaction using their key as well as the false vendor key to steal funds from users. Similarly, any vendor account owned by the market admins could do the same.
That said, a scam like that would not last nearly as long as it would on SR if word got out, but I digress.
Multi-sig escrow gives a better (read: not perfect) way for vendors to be sure they get their funds. Food for thought
EDIT: A (very) detailed explanation of the attack vectors inherent to multi-sig escrow (clearnet) : https://reddit.com/r/DarkNetMarkets/comments/23l2h6/torescrow_is_a_scam/cgy1jv3
DOUBLE-EDIT: TL;DR of the link above basically states that while a multi-sig market could run away with funds, it seems that in that scenario, a vendor's funds are always safe.
The market never stores a vendor's funds, and the 2/3 multi signature transactions created by the vendor (i.e. orders you accept) only allow for funds to go back to you or the buyer, arbitrated by the market as a form of resolution.
If they were to hack your vendor account, all they could do is accept new orders in your place and sign over those funds (and those only) their way. Any previous escrowed transaction cannot theoretically be diverted their way.
The only way for this to happen (your funds as a vendor getting stolen) is for a buyer to claim non-delivery and the market siding with them (acting like resolution we're familiar with from SR1), however it opens the opportunity for the market admins to open buyer accounts and order from you signing with a random buyer key, and then signing the transaction as the middle-man (market's key) in favor of the buyer (the buyer would have to do the same in their own favor).
This kind of possibility existed on SR1 as well, as the staff could have theoretically placed orders, received them, and refunded the buyer account as resolution staff. The same principle could happen in this case.
An exit scam from a multi-sig market would either be from hacking and changing a vendor's signing key, or the market opening rogue accounts and (very acutely) tying their funds up for a vendor's product. Once it is delivered, they refund their own buyer account using both keys.
Any smart market admin wouldn't do the above to their own address
but it does open a possible man-in-the-middle exploit as an extension to what I've outlined above. Fake buyer (market admin) orders from vendor 1, and inititates a transaction with another buyer in escrow and receives their buyer's address. Forward that to the vendor 1, and vendor 1 ships to rogue seller/admin/buyer's buyer. The buyer receives, releases escrow (or DNM admin signs for vendor and uses the collusion exploit), and then refunds themselves from vendor 1. Essentially, this would act as dropshipping and could go undetected for quite a while, meanwhile a good vendor gets his reputation completely tarnished for sending out packages and people claiming no-shows, when really they're making money and good feedback to boot.
It's not as simple as directly running off with escrow balances and deposit balances, but this possibility does exist and allows for the admins to essentially garnish funds over time along with commission. I doubt that nearly as much money could be stolen, so there's that, it just sort of changes the attack vectors and complicates them.
A solution to the problems above would be to implement random arbitration (not by market admins), and this concept has been speculated on before, but I've not heard of any solutions.