Timeout System

The Timeout System enforces deadlines across the entire transaction lifecycle. It ensures that:

  • No party can stall the process
  • All actions must be taken within defined time windows
  • Inaction leads to automatic and deterministic outcomes

Timeouts are a core part of Nector’s design, replacing the need for manual intervention or dispute moderators.

Overview

Nector defines four types of timeouts:

  • Shipping Timeout
  • Review Timeout
  • Response Timeout
  • Discussion Timeout

Each timeout corresponds to a specific phase of the transaction and enforces strict deadlines.

1. Shipping Timeout

The shipping timer begins once both parties have fully funded the escrow.

The seller must complete the required delivery action within the defined shipping time:

  • Physical products = mark as shipped
  • Digital products = upload the file

If the seller fails to act in time:

  • 20% of the product price is deducted from the seller’s bond half of that goes to the buyer and the other half is allocated to the platform

All remaining funds are returned to their original owners.

Key Property

Delaying shipment is economically penalized, making inactivity irrational for the seller.

2. Review Timeout

The review timer begins when:

  • The seller marks the item as shipped (physical), or
  • The digital file is delivered

The buyer has 24 hours to take one of the following actions:

  • Confirm the order
  • Open a dispute

If the buyer confirms:

  • Payment is released to the seller
  • Bonds are returned

If the buyer does nothing:

  • Payment is automatically released to the seller
  • Bonds are returned

Key Property

Buyers cannot delay indefinitely. Inaction benefits the seller.

3. Response Timeout

The response timer begins when the buyer opens a dispute.

The seller has 24 hours to respond by choosing one of the following:

  • Refund the buyer
  • Respond and enter discussion

If the seller does not respond:

  • The dispute is resolved in favor of the buyer
  • The seller is penalized

Penalty structure:

  • 20% of the product price is deducted from the seller’s bond half of that goes to the buyer and the other half is allocated to the platform

All remaining funds are returned.

Key Property

Ignoring disputes results in guaranteed financial loss for the seller.

4. Discussion Timeout

The discussion timer begins when the seller chooses to respond to a dispute.

Both parties enter a 24-hour negotiation window.

During this phase:

  • Buyer can release payment to the seller
  • Seller can issue a refund

If no action is taken:

The dispute resolves as a draw

Draw Outcome:

  • All funds in escrow are forfeited
  • Funds are transferred to the platform treasury

Key Property

Prolonging disputes without resolution results in losses for both parties.

Trigger Mechanism

Smart contracts cannot execute actions autonomously.

All timeout transitions must be triggered by an external transaction.

Nector uses a keeper bot system that continuously monitors orders and triggers timeout functions when deadlines are reached.

However:

  • Any external party can trigger a timeout
  • The smart contract enforces that execution is only valid after the deadline

This ensures that:

The system remains decentralized and does not rely on a single trusted actor.

Automation and Reliability

The keeper bot ensures that timeouts are executed even if:

  • Users are offline
  • No manual action is taken

Because the contract logic is public, anyone can run their own bot to monitor and trigger timeouts.

Time Source

All time-based logic relies on:

  • block.timestamp

This ensures consistent and verifiable timing across all transactions.

Anti-Abuse Design

The timeout system is designed to eliminate stalling strategies:

  • Sellers cannot delay shipping without penalty
  • Buyers cannot delay review without benefiting the seller
  • Sellers cannot ignore disputes without losing funds
  • Both parties cannot stall indefinitely during disputes

Each phase introduces time pressure combined with financial consequences, ensuring that:

The rational strategy is always to act within the allowed timeframe.

Edge Case Handling

Even in edge cases, such as:

  • Seller marking shipment at the last possible moment

The system remains safe:

  • The buyer still receives a full review window
  • No timing exploit provides economic advantage

Design Philosophy

Nector does not rely on user honesty.

Instead, it enforces behavior through constraints:

Every action has a deadline. Every delay has a cost.