Investment Risk and How to Reduce it with Escrow Protocol

Escrow Protocol
3 min readSep 29, 2021


We’ve all heard the rule of thumb that says that a better return on investment means greater risk. Although this might be true, it does not necessarily apply the other way around; higher risk won’t necessarily mean a greater return.

Of course, there will always be risks when investing, but some of them are even bigger in the cryptocurrency world. This can put people off from investing in it and reduce the great opportunity of supporting new technologies like blockchain and cryptocurrencies and miss out on the chance to get involved in great projects.

But what exactly are the most significant risks in investment, and how can Escrow Protocol help reduce them? Let’s have a look:

Diversification and Allocation

One of the first risks that investors encounter is knowing where to allocate their funds and having a diverse enough portfolio to balance the losses with the gains.

As the saying goes, it is not good to put all your eggs in the same basket. Not everything will be massive wins in investment, so you need to put some money into more stable investments and some into a more risky and profitable one.

Escrow Protocol can reduce this risk by allocating to Yield-Farming protocols the funds that are held, allowing to maximizing value appreciation through interest gains while waiting for pay-out on future funding targets. This means that even if funds are tied up for a longer period of time, the investor will actively benefit from the appreciation of funds held in Escrow. 80% of earned interest is returned back to investors.

Under regulation

Sadly the cryptocurrency market is still under-regulated. Many are seizing this as an opportunity to exploit and scam people, asking money for projects that don’t really exist and then running away with millions of untraceable dollars.

And no one wants a scammer running away with their money. No one.

That’s why the Escrow Protocol makes sure that investors remain in control of the funds by only allowing start-ups to receive the funds once results are delivered. Not only this, but investors can also vote on blocking further funding of a project in voting power relative to their investment stake, should milestone completions not be satisfactory as per the initial agreement.

This means that your money will be safe and under your control, making scammers look elsewhere for easy money, definitely not running away with yours.

Money Management Uncertainty

Another problem in angel and venture capital investing is trusting the start-up team based solely on previous results. Still, once they get all your investments funds and those from other investors, you don’t really know how good they are at managing their money.

That’s why Escrow Protocol allows investors to remain in complete control of their money, allowing their money to only go to the project once a milestone is completed. This helps start-up teams not be sitting on vast amounts of money but only get it once they’ve proved reliable, capable, and realistic.

Additionally, this helps start-ups and project leaders be motivated and continue to deliver their milestones in a timely manner.

Escrow Protocol is a decentralized crowdfunding platform that helps investors feel more secure about their investments in the cryptocurrency and blockchain world, leveraging the technology and systems that allow low-risk and results-driven investments.



Escrow Protocol

Decentralized Trust Fund with Controlled Payout Release Functions via Smart-Contracts