Escrow is a financial arrangement where a third party holds and regulates the payment of funds required for two parties involved in a transaction. It ensures security by keeping the funds in a secure account, which is only released when all the terms of an agreement are met.

For example, in a rental or online transaction, the buyer deposits funds into the escrow wallet. The funds remain safe until the buyer confirms receipt of goods or services, after which the escrow releases the funds to the seller.