> ## Documentation Index
> Fetch the complete documentation index at: https://docs.zen.land/llms.txt
> Use this file to discover all available pages before exploring further.

# Locked Escrow (2-of-2)

> Satoshi's original escrow design — maximum trustlessness, but with permanent lock risk.

<Warning>
  **Advanced users only.** Locked escrows have NO dispute resolution. Funds can be locked FOREVER if parties disagree.
</Warning>

## What is a Locked Escrow?

A **locked escrow** (also called "2-of-2 escrow") is created with **no agent selected**. This means:

* ✅ **Maximum trustlessness** — no third party can touch your funds
* ⚠️ **No dispute resolution** — if you disagree, there's no arbiter
* 🔒 **Permanent lock risk** — funds can be locked forever if you can't agree

This is Satoshi Nakamoto's original escrow design from 2010, based on pure game theory.

***

## How It Works

```mermaid theme={null}
graph TD
    A[Buyer Creates Escrow] --> B[No Agent Selected]
    B --> C[Seller Accepts]
    C --> D{Both Agree?}
    D -->|Yes| E[Release or Refund]
    D -->|No| F[Propose Split]
    F --> G{Other Party Accepts?}
    G -->|Yes| H[Funds Split]
    G -->|No| I[🔒 Funds Locked Forever]
```

### Available Actions

| Action            | Who Can Do It | Result                 |
| ----------------- | ------------- | ---------------------- |
| **Release**       | Buyer         | 100% to seller         |
| **Refund**        | Seller        | 100% to buyer          |
| **Propose Split** | Either        | Suggest % distribution |
| **Accept Split**  | Other party   | Execute the split      |

<Note>
  There is NO unilateral action for the buyer to get funds back. Only the seller can refund.
</Note>

***

## The Game Theory

Locked escrows work because of **mutually assured destruction**:

<CardGroup cols={2}>
  <Card title="Seller Cheats" icon="user-ninja">
    ```
    Seller delivers nothing
    ↓
    Buyer refuses to release
    ↓
    Money burns (locked forever)
    ↓
    Seller gains $0
    ```
  </Card>

  <Card title="Buyer Cheats" icon="user-ninja">
    ```
    Buyer claims non-delivery
    ↓
    Seller refuses to refund
    ↓
    Money burns (locked forever)
    ↓
    Buyer gains $0
    ```
  </Card>
</CardGroup>

**The key insight:** Cheating has **zero expected value** because the other party can always burn the funds. This incentivizes honest behavior.

***

## When to Use Locked Escrow

<AccordionGroup>
  <Accordion title="OTC Crypto Trades" icon="coins">
    Trading large amounts with established partners you've worked with before.
  </Accordion>

  <Accordion title="High-Trust Relationships" icon="handshake">
    Business partners, friends, or repeat clients where trust is established.
  </Accordion>

  <Accordion title="Maximum Privacy" icon="eye-slash">
    When you don't want any third party to see transaction details.
  </Accordion>

  <Accordion title="Ideological Preference" icon="brain">
    When you philosophically prefer pure code over human arbitration.
  </Accordion>
</AccordionGroup>

***

## When NOT to Use Locked Escrow

<Warning>
  Avoid locked escrows in these situations:
</Warning>

* ❌ **First-time transactions** with strangers
* ❌ **Subjective deliverables** (design, writing, etc.)
* ❌ **High-value transactions** you can't afford to lose
* ❌ **Emotional counterparties** who might act out of spite
* ❌ **Complex projects** with room for interpretation

***

## Real Risks to Understand

### Risk 1: Spite Burns

Even if you delivered perfectly, a bitter buyer might refuse to release just to hurt you.

```
Seller: "But I delivered exactly what we agreed!"
Buyer: "I don't care. I'd rather burn the money."
Result: Funds locked forever.
```

### Risk 2: Genuine Disagreement

Good-faith parties can disagree on quality or completeness.

```
Seller: "The website is done."
Buyer: "The contact form doesn't work."
Seller: "It works fine on my machine."
Result: Stalemate. No agent to decide who's right.
```

### Risk 3: Abandonment

Either party disappearing means funds are stuck.

```
Escrow funded → Seller accepts → Seller disappears
Result: Buyer can never get funds back.
```

***

## Stuck in a Locked Escrow?

If you're in a locked escrow dispute, your options are:

<Steps>
  <Step title="Communicate">
    Reach out to the other party. Many deadlocks resolve with conversation.
  </Step>

  <Step title="Propose Fair Split">
    Split the difference. Getting 50% is better than 0%.
  </Step>

  <Step title="Accept the Loss">
    If they won't respond, you may have to write it off.
  </Step>
</Steps>

<Info>
  There is NO DAO escalation, NO support team, and NO way to recover funds from a locked escrow. This is by design.
</Info>

***

## Creating a Locked Escrow

If you understand the risks and want to proceed:

<Steps>
  <Step title="Create Escrow">
    Start creating an escrow normally
  </Step>

  <Step title="Agent Selection">
    When asked to select an agent, choose "No Agent"
  </Step>

  <Step title="Acknowledge Warning">
    You'll see a warning. Confirm you understand the risks.
  </Step>

  <Step title="Complete Creation">
    Fund the escrow as normal
  </Step>
</Steps>

***

## Comparison: Standard vs Locked

| Feature                 | Standard Escrow   | Locked Escrow         |
| ----------------------- | ----------------- | --------------------- |
| **Agent**               | Yes, pre-selected | None                  |
| **Dispute Resolution**  | Agent decides     | Mutual agreement only |
| **Permanent Lock Risk** | No                | Yes                   |
| **Third-Party Trust**   | Required          | Not required          |
| **Best For**            | Most users        | Power users, OTC      |
| **Fees**                | Protocol + Agent  | Protocol only         |

***

<Card title="Not sure? Use Standard" icon="shield-check" href="/escrow-types/standard-escrow">
  Standard escrows are recommended for most transactions →
</Card>