Cross-Party Escrow

Escrow exists because two parties who don't fully trust each other still need to transact. The traditional answer is a custodian who holds the funds and releases them when conditions are met — which just replaces "trust the counterparty" with "trust the custodian." For Bitcoin, there's a better way: a 2-of-3 multisig where no one party can move the money alone, and the neutral arbiter only matters when there's a dispute.

SigVault lets each participant hold their key from their own organization, so a deal can be wired up without anyone joining anyone else's workspace.

The shape of an escrow vault

A 2-of-3 policy across three independent parties:

• One key held by the buyer
• One key held by the seller
• One key held by a neutral third party (the arbiter)

The happy path never involves the arbiter. When the buyer is satisfied, buyer and seller sign together (2-of-3) and funds release. If the deal completes and the buyer needs a refund, buyer and seller can also cooperate. The arbiter's key is only used to break a tie: they side with one party, and their signature plus that party's makes the required two.

How it works in SigVault

1. Each party works from their own organization. The buyer, seller, and arbiter each have their own SigVault account and hardware wallet — nothing is merged.
2. Connect hardware wallets. Every key lives on its owner's device; SigVault only ever sees public keys.
3. Share one device each into the escrow vault builder. Sharing exposes a public key for this vault only and is revocable.
4. Build the 2-of-3 vault. SigVault produces a descriptor-based multisig, so the escrow is auditable and restorable in any compatible tool.
5. Each party approves the specific vault before their key is bound to it.

wsh(sortedmulti(
  2,
  [buyer/48'/0'/0'/2']xpub6...,     // buyer's org
  [seller/48'/0'/0'/2']xpub6...,    // seller's org
  [arbiter/48'/0'/0'/2']xpub6...    // neutral third party
))

Funding and release

The buyer funds the vault address. Because it's a real on-chain multisig, both parties can independently verify the balance — no custodian statement to trust. On completion, buyer and seller each sign on their own hardware, the transaction reaches its 2-of-3 threshold, and funds move to the seller. If they disagree, the arbiter reviews the case and signs with whichever party they judge correct.

No party — and not SigVault — can spend alone. The arbiter can't run off with the funds, because one signature is never enough.

Why counterparties trust it

• No custodian risk. The money sits in a multisig neither side controls unilaterally.
• Organizational separation. Buyer, seller, and arbiter keep their own accounts, keys, and audit trails.
• Minimal arbiter power. The neutral party can only tip a decision, never seize funds.
• Verifiable on-chain. Both sides can confirm the escrow balance directly.