https://themis.network/ My TL;DR: A trustless escrow protocol that facilitates peer-to-peer exchange of goods, services or digital assets, with cryptocurrencies as payment. It works for Over-The-Counter trading or can be integrated by e-commerce websites as payment processor.

Buying stuff online is part of our daily lives since 1994, and growing towards an estimated $27 trillion per year in 2020. That’s retail figures alone. When it comes to paying, we are used to going through payment processors such as banks or digital entities like PayPal. It’s super easy and fast, and if the shipment of a product goes well, everyone’s happy. In case it does not, settling disputes involves asking for a refund, calling your bank, suing the other party, or simply taking a bitter loss.

Escrow services, such as AliPay, have emerged to alleviate the problem. For a small fee, a reputable third party holds the funds (can be either fiat or crypto) involved in the transaction, and releases it to the seller, if they deliver, or back to the buyer, if the transaction did not occur as agreed upon.

The project is named after the Greek Goddess of Law and Undisputed Order. As people in ancient times believed in the incorruptibility of the gods, so do we now believe in the neutrality of blockchain technology, which carries out transactions as written in the code.

With that in mind, the Themis team set out to create the first trustless escrow for transactions involving cryptocurrencies, both when they are used as manner of payment for goods or services, or in an OTC crypto trade.

This is the high level view of how it works: using the classic example of Alice & Bob, let’s say they engage in a transaction. Bob sells a used cellphone and Alice pays for it. An escrow wallet is created on the Themis platform and Alice sends ETH to it.

The private key of the escrow wallet is split into 3 parts: Alice and Bob both have the first, Alice has the second and Bob the third. The second and third parts get scrambled and sent to a few peers which mediate the trade. The transaction can be confirmed by Alice on the platform, or via an oracle, which for example gets the information from DHL about successful delivery. Alice sends the other part of the key to Bob, who proceeds to receive the payment from the escrow account.

In case of dispute, let’s say Alice receives the cellphone but doesn’t want to pay, the mediators activate the arbitrage service and become arbitrators. The arbitrators can then decide that Bob is the winner and combine their scrambled parts of the private key with Bob’s part to unlock the escrow wallet for Bob.

The mediators on the platform are people running a Themis node to help validate blocks on the Themischain via the Delegated Proof of Stake and Reputation consensus mechanism. They are rewarded proportional to their staked amount of tokens and reputation. Conversely, they lose their staked tokens and reputation for malicious behavior. There are three tiers of mediators, ranging from trusted institutions running reliable no-downtime nodes to regular mediators, which stake a smaller amount of tokens and are not guaranteed to be online at all times.

The GET token is paid by participants on the platform to use the escrow and arbitrage services, and are staked by and rewarded to mediators.

The team is relatively young and inexperienced when it comes to building businesses. The technical side is very strong, however. Their CTO Ennan Zhai is a Yale researcher with a lot of published articles. The work done to come up with a trustless blockchain based escrow mechanism is impressive.

They claim some 22 developers working on the project out of China, that keep their identities hidden due to fear of Chinese censorship in relation with anonymous OTC deals. They are complemented by a large team of advisors, notably Han Kao from WanChain and Gong Hui from Seele. Shen Bo, who founded Fenbushi Capital, is a notable investor, together with some other smaller investment groups. Fenbushi Capital is not listed as an institutional investor.

There is an MVP available for testing, but not in English, their GitHub action appears slow, and they boast a test net coming in June. Their roadmap only specifies test net and main-net as next milestones, which does not look great. They are looking to raise 22,000 ETH for 50% of the tokens, and are quite under the radar at the moment. They partner with Shenzen Chieftin Lab for smart contract review and with Oraclechain for fetching offchain data. Businesswise, they have collaborations with an insurance agency, a fuel discounter and an app dealing with intellectual property, all of which will use Themis’ OTC capabilities in some way.

OTC deals with crypto as payment will only increase in popularity, as people continue to embrace the speed, privacy and reduced costs of using cryptocurrency over fiat. Themis proposes to remove the third party trust proxy that many turn to in OTC deals and, if they pull it off, they will have a first mover advantage that will give them the spotlight, at least until Ant Financial executes on its plans to include blockchain technology in its AliPay services.

I however think it’s too early in the space for too much retail action to happen and crypto OTC deals can already be conducted safely. The hidden developers aspect is a bit discouraging, and their team is relatively young and not business proven, albeit technically capable. Even if they prove that it works as advertised, AliPay’s imminent movement into blockchain tech is a serious threat to the project. I will avoid the Themis ICO.

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