Escrow & Settlement

Payments on VirtEngine are usage-driven: tenants fund an escrow account up front, but money only moves to providers after signed usage records survive a dispute window and settle on-chain.

The settlement sequence. Funds rest in escrow until usage is reported, the dispute window passes, and x/settlement authorizes transfer of the agreed amount with no marketplace commission.

Escrow accounts

When a tenant creates a deployment, they deposit funds into an escrow account managed by x/escrow. The escrow account:

• backs every lease formed under the deployment,
• is drawn down only by settled usage, and
• can be topped up at any time; when it empties, the lease closes.

This protects both sides: providers know funded capacity is real, and tenants never grant a provider direct pull access to their wallet.

The settlement pipeline

The provider daemon runs a settlement pipeline that connects metered usage to on-chain billing. Its cadence is configurable; the defaults are:

Setting	Default	Meaning
settlement_interval	1 hour	How often pending usage is processed into settlements
dispute_window	24 hours	Time tenants have to dispute a usage record
reconciliation_interval	6 hours	Cross-validation against platform metrics
max_pending_records	100	Backlog size that triggers early settlement

Usage records are submitted on-chain in signed batches (MsgRecordUsage), then settled by x/settlement into billable line items once the dispute window has elapsed and no dispute is open.

Disputes and corrections

A tenant who believes a record is wrong can dispute it inside the window:

virtengine tx settlement dispute-usage \
  --usage-id usage-1234567890 \
  --reason "CPU usage appears inflated" \
  --expected-cpu-hours 10 \
  --from customer

Dispute lifecycle: Created → Pending → Reviewing → Resolved / Rejected / Expired. Key guarantees:

• usage cannot be settled while a dispute on it is open;
• accepted disputes produce corrections — new usage records that reference the original rather than silently rewriting history;
• dispute evidence is immutable once recorded.

Reconciliation and discrepancy handling

Settled usage is cross-checked against independent platform metrics (the reconciler compares provider container/volume/GPU metrics with platform-side component usage). Discrepancies escalate by size:

Difference	Severity	Action
0–5%	Low	Log only
5–10%	Medium	Alert generated
10–25%	High	Alert + review
>25%	Critical	Settlement blocked

Zero marketplace commission

At payout, the proposed x/take settlement policy is 0% marketplace commission, so x/escrow transfers the agreed amount to the provider. Validator transaction fees apply separately to on-chain messages and are proposed at approximately 90% below standard network transaction fees. The issuance and fee-policy model is covered in Settlement Policy & Issuance.

Operator commands

# Force settlement for an order
virtengine tx settlement settle-order --order-id order-1234567890 --from provider

# Check reconciliation status
virtengine query settlement reconciliation-status --allocation-id alloc-1234567890

# List active disputes
virtengine query settlement disputes --status pending --provider provider-address