Skip to main content
The Protocol is designed to minimize unnecessary data disclosure during disputes. If a user files a dispute, the counterparty can submit evidence of the transaction without exposing additional personal data. In the current contract implementation, disputes are resolved on-chain by authorized admins based on submitted evidence and protocol fault rules. Privacy-preserving bank transaction verification and deeper automated settlement are part of the roadmap (see Section 4.2).
Current Dispute Process:
  1. Party raises dispute within T_dispute window
  2. Counterparty submits evidence (payment confirmation, screenshots, transaction IDs)
  3. Evidence reviewed against protocol rules
  4. Authorized admins issue on-chain verdict
  5. Settlement executes: USDC released, bonds slashed/returned, reputation updated

​
Windows & Burdens

Default onus: The party claiming completion provides evidence of completion. The challenger can present counter-evidence (e.g., bank statement showing non-receipt). Fail-to-prove paths trigger slashing or refunds according to the Protocol rules.

​
Time Windows

Each order type and payment rail has specific dispute windows: Standard Windows:
  • T_dispute for low-risk rails: 1 hour after merchant confirmation
  • T_dispute for medium-risk rails: 6 hours after merchant confirmation
  • T_dispute for high-risk rails: 24-48 hours after merchant confirmation
Evidence Submission:
  • Parties have 24-48 hours to submit evidence after dispute is raised
  • Extensions may be granted for complex cases requiring off-chain proof generation

​
Burden of Proof

On-Ramp (Fiat → USDC):
  • Merchant claims: “I received fiat payment”
  • Merchant must prove: Bank notification, transaction ID, matching amount and reference
  • User can contest: Show their bank statement proving no transfer occurred
Off-Ramp (USDC → Fiat):
  • Merchant claims: “I sent fiat payment”
  • Merchant must prove: Transfer confirmation, recipient details match order
  • User can contest: Bank statement showing no receipt within time window

​
Penalty for False Claims

In the event a buyer attempts to proceed without actually making the fiat transfer first, they risk losing Reputation Points—creating strong economic disincentives for fraudulent behavior.
Consequences of False Disputes:
  • Reputation slashing: Significant RP reduction
  • Bond forfeiture: Posted bonds are slashed
  • Fee penalties: Additional penalties for malicious disputes
  • Temporary restrictions: Reduced limits or temporary suspension
  • Permanent ban: Repeated false disputes result in protocol ban

​
Slashing Schedule

Penalties scale with severity and repetition:
  • -50 RP
  • 50% bond slashed
  • Warning issued
  • Transaction limits reduced by 50% for 30 days
  • -200 RP
  • 100% bond slashed
  • Transaction limits reduced to minimum for 90 days
  • Matching priority set to lowest
  • Permanent ban from protocol
  • All bonds forfeited
  • Reputation reduced to zero
  • Address blacklisted

​
Privacy-Preserving Evidence

The protocol minimizes data exposure during disputes:

​
Current Evidence Types

Merchant Evidence (On-Ramp):
  • Redacted bank notification showing: amount, date, reference number
  • Transaction ID from payment rail
  • Timestamp of receipt
Personal details redacted: Account numbers, full names, addresses User Evidence (On-Ramp Dispute):
  • Bank statement excerpt showing: no matching transaction
  • Account balance proof (amount sufficient to make payment)
  • Transaction history for relevant time period
Personal details redacted: Account numbers, other transactions, full identity Merchant Evidence (Off-Ramp):
  • Payment confirmation from sending bank
  • Transaction ID and reference
  • Recipient details matching order (encrypted to admin only)
User Evidence (Off-Ramp Dispute):
  • Bank statement showing no receipt
  • Account activity log for time window

​
Future: ZK-Proof Evidence (Roadmap)

Planned evidence module will enable fully cryptographic proofs:
  • ZK-proof of payment: Prove a transaction occurred without revealing transaction details
  • ZK-proof of non-payment: Prove no matching transaction exists without exposing full bank history
  • Selective disclosure: Reveal only the specific fields required for dispute resolution
  • On-chain verification: Automated verification without human admin review

​
Dispute Resolution Flow

​
Admin Role (Current Implementation)

In the current implementation, disputes are resolved by authorized admins:

​
Admin Responsibilities

  • Review submitted evidence within 24-48 hours
  • Verify evidence authenticity (check transaction IDs with rail providers)
  • Apply protocol rules consistently
  • Issue on-chain verdict with reasoning
  • Execute settlement (release funds, slash bonds, update reputation)

​
Admin Constraints

Admins operate under strict constraints:
  • Rule-bound: Must follow protocol rules, cannot make arbitrary decisions
  • Evidence-based: Decisions must be based on submitted evidence
  • Transparent: All verdicts recorded on-chain with reasoning
  • Accountable: Admin actions auditable by governance
  • Time-limited: Must resolve within specified windows or default to protocol rules

​
Transition to Decentralization

The roadmap includes transitioning to more automated and decentralized dispute resolution: Phase 1 (Current):
  • Admin/multisig resolution
  • Manual evidence review
  • On-chain verdict execution
Phase 2 (Near-term):
  • ZK-proof evidence submission
  • Automated verification for clear cases
  • Admin review only for complex disputes
Phase 3 (Long-term):
  • Fully automated ZK-proof verification
  • Decentralized arbitrator pool
  • Governance-driven rule updates
  • On-chain settlement without admin intervention

​
Appeal Process

Users who disagree with a dispute verdict can appeal:
1

File Appeal

Submit appeal within 7 days of verdict, including:
  • Reason for disagreement
  • Additional evidence
  • Appeal fee (returned if appeal successful)
2

Secondary Review

Different admin or admin panel reviews case Fresh evaluation of all evidence
3

Final Verdict

Appeal decision is final Reputation and settlement adjusted if verdict changes Appeal fee returned or burned based on outcome
Frivolous appeals result in additional reputation penalties to prevent appeal spam.

​
Dispute Statistics and Transparency

The protocol maintains public statistics on dispute resolution:
  • Dispute rate: Percentage of orders resulting in disputes
  • Resolution time: Average time to resolve disputes
  • Verdict distribution: Percentage resolved in favor of each party
  • Appeal rate: Percentage of verdicts appealed
  • Appeal success rate: Percentage of appeals that change verdict
These statistics provide transparency and accountability, helping users understand the dispute process and trust in fair resolution.