The simple metaphor
Imagine you make a bet with a friend: “Real Madrid wins tonight, or I give you 50,000 KTK.”
Without escrow: you have to trust your friend to pay if he loses. And he has to trust you for the same reason. If either of you refuses to pay, the other one loses out.
With escrow: you both place your 50,000 KTK with a neutral third party (a notary, for example). When the match ends, that person automatically gives the 100,000 KTK to the winner. Nobody can cheat.
Ktkarena is the notary. Except that instead of a person, it's an automated system that can't be influenced.
How it works technically
Here are the 3 steps in the lifecycle of a stake on Ktkarena:
Step 1 - Bet placed (stake on your balance)
You decide to bet 50,000 KTK on Real Madrid. You tap Place bet in the app. At that moment:
- Your 50,000 KTK are reserved on your balance.
- You can no longer use them for anything else.
- But they are still technically yours.
Step 2 - Bet matched (transfer to escrow)
The algorithm finds you an opponent who staked 50,000 KTK against you. At that exact moment:
- Your 50,000 KTK leave your balance.
- Your opponent's 50,000 KTK leave their balance too.
- The 100,000 KTK total is placed in an escrow account managed by our system.
- Nobody can touch it: not you, not your opponent, not Ktkarena, not the administrators.
This is the step that truly secures your bet. As long as your stake sits on your balance, it could theoretically disappear (hack, bug). In escrow, it is isolated and protected.
Step 3 - Event resolved (automatic release)
When the event ends and the resolution is validated (by external sources or an administrator, depending on the event type), our system:
- Automatically identifies the winner.
- Calculates the commission based on the tier.
- Credits the winner with the total stake minus the commission.
- Records everything in the immutable audit log.
Delay between resolution and credit: less than 5 seconds in 99% of cases. No human intervention.
Important. While your stake is in escrow, it is not “with Ktkarena” in the sense that we could use it for anything else. It's a segregated account, isolated from our corporate treasury. Even if Ktkarena went bankrupt tomorrow, the stakes in escrow would be returned to users.
The 4 escrow guarantees
Guarantee 1 - No human intervention possible
The escrow release is automatic. No administrator can arbitrarily decide who gets the money. The code that manages the escrow is tested, audited, and runs without intervention.
Guarantee 2 - Segregated account
The money in escrow sits in a bank account separate from Ktkarena's corporate treasury. Legally, it is not money that belongs to Ktkarena - it is money held on deposit for users.
Guarantee 3 - Immutable audit log
Every movement (entry into escrow, release to the winner, commission collected) is recorded in an immutable log. Ktkarena cannot retroactively modify this history.
Learn more about the audit log.
Guarantee 4 - Refund in case of dispute
If you dispute a resolution within 48 hours of closing, your stake is frozen again in escrow while the dispute is reviewed. If the dispute is found in your favor, you are refunded in full.
What happens if something goes wrong
Problem 1 - Technical bug during escrow
If a bug keeps your stake locked in escrow past the scheduled resolution date (very rare, never observed to date): automatic refund within 24 hours, no action needed.
Problem 2 - Event canceled (postponed match, etc.)
If the event ultimately doesn't take place (postponed match, cancellation), the stake leaves escrow and returns to your balance, with no commission whatsoever.
Problem 3 - Bet not matched at all
If your bet was never matched (matching loop exhausted), the stake never entered escrow. It stays on your balance, and the bet is canceled without penalty.
Pool phase and escrow
Pool phase and escrow: during the pool phase, the KTK from residuals stays in escrow while the calculation runs. If you are absorbed by the pool, your escrow remains committed until resolution. If you are refunded (pool odds below your threshold), your escrow is released back to your balance immediately.