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What Is the Advantage of an “Escrow” Smart Contract in Lending?

It is a trustless, automated mechanism that securely holds collateral and funds, eliminating the need for a third-party intermediary.
Greeks.Live16.11.25

What Is the Advantage of an “Escrow” Smart Contract in Lending?

The escrow smart contract provides a trustless, automated mechanism for collateral management. It securely holds the NFT collateral and the borrowed funds, ensuring that the borrower receives the loan and the lender is guaranteed the collateral upon default.

This eliminates the need for a trusted third-party intermediary, reducing counterparty risk and transaction costs.

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