Hedged-Escrow

CanWork's Hedged Escrow

How CanWork avoids price volatility

The BEP Hedged Escrow


In 2018, CanYa built the first hedged-escrow system for crypto assets. This was a significant technical milestone for the project which was repeated when the hedged-escrow was transferred across to Binance Chain’s architecture in 2020. The trustless hedged escrow ensures that when a user books a service, its value will remain static independent of any $CAN token price volatility. It is critical to the integrity of the CanWork user experience for freelancers and clients alike.



The Problem

Any fiat based marketplace platform can protect against bad actors (ie customers not paying for a job or merchants taking the money for a job and not delivering) by pre-authorised payment, usually via credit cards.
CanWork, using cryptocurrency, cannot do this and therefore needs to hold cryptocurrency in escrow until the job is complete. However, this presents its own unique problem due to the price volatility of cryptocurrency while it is held in escrow.

For example, if you are paying a freelancer on
CanWork to build your new website this job may take a month or more. The job was agreed upon for $1000 USD worth of $CAN which was put into escrow. During the month-long escrow process the price of $CAN could have dropped by 20%. The escrow is now worth $800 USD and the freelancer will either lose out or demand the client to add more funds to the escrow in which case the client will lose out. This is clearly not viable for a marketplace like CanWork.

The Solution

The Hedged Escrow process is a way to ensure job value remains constant on the
CanWork platform despite the price of $CAN. The job value will be pegged in $USD and will automatically remain static throughout the job process. This means clients and freelancers can use CanWork to book real jobs with all the benefits of cryptocurrency without the downside (price volatility).



Do Payments other than $CAN work in the Hedged Escrow?


Short answer, yes. Since BEP2 integration went live in 2020
CanWork users can pay freelancers in any BEP2 token. The team have designed these payments so that they too are protected via the Hedged Escrow.


Future of the Hedged Escrow


The team are currently looking at options to further advance the functionality of our Hedged Escrow using the tools available on Binance Smart Chain. Possibilities include creating a BEP20 version of $CAN to interact with an updated version of the Hedged Escrow. Here, clients could pay in any BEP20 token, the Hedged Escrow would convert those funds to $BUSD and buy a small amount of $CAN from the transaction fee. The Escrow would then pay out the freelancer in $BUSD. This would massively reduce the friction involved in the platform for clients and freelancers while also making a more decentralised, autonomous solution for CanWork payments. This is only theoretical at this point but expect more to come on this in the future.

If you want more information or want to see how you can get involved, join the community Telegram channel.



CanWork:
https://www.canwork.io/
Twitter: https://twitter.com/CanWork_
Facebook: https://www.facebook.com/CanWorkPlatform

Chris McLoughlin

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2021-02-02

Date posted

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 CanWork   Freelance   Binance