Multisig on Tor markets, what 2-of-3 actually means
Classic escrow means the shop holds your coins alone. When a market exits, the shop wallet leaves with everyone. Multisig turns that single point of failure into three.
The old way
Classic escrow: you deposit coins to the market wallet. The market holds them while the seller ships. When you confirm delivery, the market releases the coins to the seller. If you dispute, a moderator decides. This works fine when the market is honest. When the market decides to disappear, every wallet leaves with the operator. Every exit scam of the last ten years worked this way because the operator had unilateral control of the funds.
The multisig way
A 2 of 3 multisig deposit is guarded by three separate private keys, and any two of them together can move the coins. The three keys are held by the buyer, the seller and the market. Not one of them alone can spend the deposit.
Normal happy path: order finishes fine, the buyer and the seller both sign, the coins go to the seller. Neither of them needs the market to sign at all. The market is only there for arbitration when the two sides do not agree.
Dispute: the buyer or the seller opens a dispute. A market moderator reviews the case and cosigns with whichever side they decide is right. Two signatures release the coins, the third is not needed.
Market exits with the money: cannot happen. The market only holds one key. One key cannot move the deposit.
Why 2 of 3 and not 2 of 2
A 2 of 2 multisig between buyer and seller sounds cleaner because there is no market involved. In practice it means that if either side goes offline or refuses to cooperate, the coins are stuck forever. Somebody has to be a tiebreaker. That third key is the market, and it can only ever help, never steal.
What the market actually can do
Cosign to unstick a stuck order. That is all.
The market cannot spend your deposit without the buyer or the seller cosigning. It cannot rotate its own key to a new one without breaking every open deposit, which would be public and obvious. It cannot silently drain wallets over the weekend the way exit scam shops used to.
The tradeoffs
Multisig transactions are bigger than plain ones because three signatures are heavier than one. On Bitcoin this means slightly higher fees. On Monero the effect is smaller. Some markets pass the fee to the buyer, some absorb it.
Multisig setup takes a few clicks at checkout. You have to make a fresh wallet or use a multisig aware wallet like Sparrow (Bitcoin) or the official Monero wallet, both of which have multisig menus built in. The market walks you through it.
Refunds are not always clean. If a seller vanishes with the order not shipped, the market cosigns with you to move the coins to a refund address of your choice. The seller does not get to complain because they left.
What multisig does not fix
A dishonest seller shipping counterfeits. Multisig makes exit scams from the shop impossible, but the seller can still ship you a rock instead of what you paid for. The dispute system still exists and you still need to file one.
The market moderator deciding against you in a dispute. If the mod is bought or lazy, they can cosign with the seller and take your money out of the pool. Multisig limits the market's power over deposits but not its power to be a bad arbiter. Read reviews of the market's dispute record before you commit.
How to use it
Pick a market that runs 2 of 3 by default. On the current list, TorZon, Anubis and Osiris all offer it. At checkout, pick multisig instead of classic escrow. Follow the wallet setup. Deposit. Ship or wait. When the order finishes, confirm and sign the release. That is it.
Do not lose your key. If you lose your key mid-order, you become one of two remaining, and both the seller and the moderator have to sign to move the coins. This usually still works out but it costs you time.
The short answer
2 of 3 multisig removes the single biggest risk on Tor markets, which is the shop taking every deposit and walking. It does not remove seller fraud and it does not remove bad arbitration. It shifts the trust from the shop's honesty to the shop's dispute process, and the dispute process is what you should be reading about before you commit to a market.