CodeHawks Escrow Contract - Competition Details

Summary:

Collusion of Arbiter and Seller

Vulnerability Details:

The Escrow contract allows the parties involved in a transaction (buyer, seller, and arbiter) to determine the outcome of a dispute. In some scenarios, there may be a risk of collusion between the arbiter and the seller, compromising the fairness and integrity of dispute resolution. If the arbiter and seller collude, they could potentially manipulate the dispute resolution process in favor of the seller, leading to an unfair outcome for the buyer.

Impact:

The centralization vulnerability exposes the risk of collusion between the arbiter and seller during dispute resolution. This could result in unfair outcomes, where the buyer's interests are compromised, and the escrow service's trustworthiness is undermined. The severity of this vulnerability is rated as high due to the potential financial loss and loss of trust in the escrow service.

Recommendations:

1. Implement a decentralized dispute resolution mechanism by integrating with Kleros Court. This will introduce an additional layer of security and impartiality to dispute resolution.

2. Add a period during which the buyer or seller can challenge arbiters decision using an "appeal" function to forward the dispute to Kleros Court. This period should be a reasonable duration to allow parties to present their case to the decentralized court for a fair resolution.