This process ensures that payment is only transferred to the recipient once the verification of goods delivery is confirmed by the escrow service provider. However, this mechanism encounters challenges similar to those faced by Discreet Log Contracts (DLCs) when operated over LN, primarily due to the discrepancy between the expected duration of contractual agreements and the preference of forwarding nodes for quick resolution of Hash Time Locked Contracts (HTLCs). Typically, contracts extend over days or weeks, whereas forwarding nodes are optimized for resolutions spanning seconds to minutes.

A proposed solution to mitigate the extended duration of HTLC resolutions involves implementing a hold fee, charged in satoshis per minute, for as long as an HTLC remains unresolved. Nonetheless, this approach might render the use of escrow via LN financially unviable for the paying party. For instance, considering an HTLC worth $1,000 being forwarded through ten hops and kept pending for one month, with an assumed annual time value of capital at 5%, the accumulated hold fees would approximate $42. This financial implication suggests that while LN-based escrows can technically support proper escrows, the economic feasibility of such arrangements under current conditions poses significant challenges.