Dispute Resolution

Phase 6 — Dispute Resolution (When Trust Meets Judgment)

No matter how well-designed a process is, disagreements happen. That’s why every Trustless Work escrow includes a final safeguard: Dispute Resolution.

This phase ensures that when parties disagree on delivery or results, funds don’t vanish into uncertainty. They stay locked in the escrow until a Dispute Resolver decides where they should go.

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⚖️ The Role of the Dispute Resolver

The Dispute Resolver is the only address authorized to intervene once a dispute is raised. This role represents a neutral authority — it can be:

• A platform’s customer support team mediating between users

• A DAO-based arbitration module

• A trusted third party or auditor

• Or, in advanced setups, a decentralized dispute resolution DAO

The resolver’s job is to review both sides, look at the evidence, and decide how the locked funds will be distributed.

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🧾 How a Dispute Is Raised

Disputes can be triggered by either:

• The Service Provider (e.g., claiming they delivered as promised), or

• The Approver (e.g., claiming the work was unsatisfactory).

Once raised:

• The milestone or escrow’s disputed flag is set to true.

• The contract enters a locked state — meaning no further releases can happen until it’s resolved.

• All updates and evidence remain visible on-chain for transparency.

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🧠 How the Resolver Makes a Decision

The Dispute Resolver signs a resolution transaction that includes:

1. A list of addresses and amounts to re-route the funds to.

2. Optional evidence or reasoning (usually an off-chain link or case reference).

💡 This flexible format replaces the older binary system (refund or payout). It allows more nuanced outcomes — partial refunds, multi-party settlements, or even new allocations in special cases (like shared credit lines or pooled contributions).

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🔄 Transparency and Traceability

Every resolution is publicly verifiable and immutable:

• The contract emits a Resolution Event containing all the distributions.

• These amounts become part of the escrow’s historical record.

• Anyone can inspect who received what, when, and why.

This creates transparent, tamper-proof accountability — essential for platforms that need audit trails, regulatory compliance, or internal oversight.

You can verify resolution details directly in:

• Escrow Viewer — structured breakdown of resolution outcomes

• Stellar Expert — raw transaction data and event logs

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👥 Who Plays This Role in Practice

Depending on the ecosystem, the Dispute Resolver can be implemented in different ways:

Scenario	Dispute Resolver	Example
Marketplace or SaaS Platform	Platform’s customer support team	Upwork, Fiverr-style review desk
Grants or DAOs	Governance contract or arbitration module	Community voting or delegated resolution
Private Credit & Finance	Escrow manager or legal agent	Adjusts amounts between borrower, lender, guarantor
P2P / Trust-Minimized Systems	Decentralized arbitration	Uses smart contracts or on-chain juries

🧩 The role is flexible — the key is that the resolver’s actions are traceable, transparent, and signed.

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🪶 Evidence and Off-Chain Storage

Resolvers can attach evidence to their decisions — for example:

• Case reports

• Proof of refund agreements

• Links to decentralized storage (IPFS, Arweave, Filecoin)

Trustless Work stores only the reference (the URL or hash), not the file itself. This keeps the on-chain data light while preserving a full trail of proof.

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📦 Outcome of the Dispute Resolution Phase

By the end of this phase:

• The Dispute Resolver has signed and submitted a resolution transaction.

• Funds have been re-routed according to the distribution list.

• The escrow’s resolved flag is set to true.

• All movements are publicly visible and auditable.

💡 The Dispute Phase proves that even in disagreement, trust can remain programmable. No hidden decisions — every outcome is on-chain, traceable, and final.