# Escrow & Settlement

***

## How escrow works

For every execution, user funds are locked in a Program Derived Address (PDA) on Solana before the agent runs. The PDA is controlled by the Agentify Protocol. Neither the user nor the creator can unilaterally access the funds.

```
User wallet
    ↓ (USDC transfer, signed by user)
EscrowAccount PDA
    [execution_id, user pubkey, amount, lock timestamp]
```

The escrow is a standard SPL-USDC token account at a deterministic address derived from the execution ID. The derivation is:

```
PDA = findProgramAddress(["escrow", execution_id], AGENTIFY_PROGRAM_ID)
```

Because the address is derived from the program, only the Agentify Protocol can authorize transfers out of it.

***

## Release conditions

Escrow is released in exactly two scenarios:

**1. Successful execution**

The creator's service returns a result with a valid Ed25519 signature. The Agentify Protocol verifies the signature on-chain. If it passes, escrow releases in the same transaction:

```
EscrowAccount PDA
    ↓ 99%   → Creator's Solana wallet
    ↓ 1%   → Agentify treasury wallet
```

**2. Execution failure**

The execution times out, the creator returns `status: "failed"`, or the signature fails verification after the retry window. Escrow is refunded:

```
EscrowAccount PDA
    ↓ 100%  → User's wallet (full refund)
```

There is no third path. Funds cannot remain locked indefinitely.

***

## Settlement atomicity

The escrow release and settlement are atomic. They happen in a single Solana transaction. Either both transfers succeed, or neither does. There is no intermediate state where funds are in transit.

The `ExecutionRecord` is finalized and the `EscrowReleased` event is emitted in the same transaction. The on-chain record and the payment settlement are always consistent.

***

## Dispute holds

When a user raises a dispute within the 72-hour window, the escrow settlement is already complete. Funds have moved. The dispute mechanism operates against the creator's `CreatorCollateral` account, not the original escrow.

If the dispute is upheld:

* The disputed amount is transferred from `CreatorCollateral` to the user's wallet
* The creator's collateral is reduced accordingly

The original `ExecutionRecord` is updated with a reference to the `DisputeRecord` and the resolution outcome.

***

## Fee breakdown

| Recipient         | Amount               | Mechanism                                        |
| ----------------- | -------------------- | ------------------------------------------------ |
| Creator           | 99% of execution fee | On-chain transfer at escrow release              |
| Agentify treasury | 1% of execution fee  | On-chain transfer at escrow release              |
| Solana network    | < $0.001             | Solana transaction fee, paid by initiating party |

The Solana network fee is separate from the execution cost and is paid by whoever submits the escrow transaction (the user). At current network conditions this is under one cent.


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