How a Trade Works

Our trading process differs from traditional P2P platforms. We do not lock the seller's cryptocurrency in an escrow account during the trade. Instead, we use a "fiat-first" model, where security is guaranteed by the security deposit ("Deposit-to-Trade") of both parties.

Step-by-Step Online Trade Process Let's consider a standard trade to buy 100 USDC.

1. Trade Initiation:

   • Buyer (A) finds Seller (B)'s advertisement and opens a trade.

   • The system instantly checks that both participants have a sufficient security deposit (e.g., $100 or more) in the Safe treasury.

2. Fiat Transfer (Off-chain):

   • Buyer (A) sees Seller (B)'s fiat details (e.g., bank card number).

   • Buyer (A) directly sends $100 in fiat to Seller (B)'s account using their bank or payment app.

   • At this time, Seller (B)'s 100 USDC are still in their personal EVM wallet (MetaMask, Rabby, etc.).

3. Fiat Verification (AI-Powered):

   • Buyer (A) uploads "Receipt 1" (a screenshot or receipt confirming their payment) to the trade chat.

   • Seller (B) receives a notification, checks their bank account, and, after confirming receipt of funds, uploads "Receipt 2" (a screenshot confirming they received it).

   • Our AI Guardian (a fine-tuned Gemini 2.5 Flash model) analyzes both documents in real-time for matching amounts, dates, payment methods, and looks for signs of forgery (editing artifacts, generation signs, mismatches with specified payment methods).

4. Cryptocurrency Transfer (On-chain):

   • Only after the AI (or a human arbitrator in a dispute) confirms that the fiat was successfully received by Seller (B), our backend generates and displays a "Send Crypto" button in the seller's interface.

   • This button is "pre-loaded" with the buyer's correct wallet address and the exact transfer amount.

   • Seller (B) clicks this button, which helps them initiate an on-chain transaction of 100 USDC from their personal wallet (the one they are logged in with) to Buyer (A)'s wallet.

5. Completion:

   • The Looty backend automatically monitors this on-chain transaction. As soon as it is confirmed on the Base network (or other EVM network), the trade is considered successful and closed.

Offline Trades (Cash-in-Person) Looty also supports secure cash exchanges, replacing receipt verification with one-time codes (OTC).

1. Parties agree to the trade and meet in person.

2. Buyer (A) gives Seller (B) the cash.

3. To confirm fiat receipt, Buyer (A)'s app generates a one-time secret code.

4. Seller (B) must enter this code into their app.

5. This code entry serves as a digital "receipt" and is the equivalent of "Receipt 2."

6. After this, Seller (B)'s "Send Crypto" button becomes active, and they send the cryptocurrency to Buyer (A) (Step 4).

Future Security Enhancement: For additional protection in offline trades, we plan to implement a geo-verification mechanism. The system (with user permission) will check that both participants are in close proximity (e.g., within a 50-meter radius) at the moment of the code exchange. This will help prevent disputes related to one party not showing up.

Diagram: The Trade Flow (How a Trade Works)