> For the complete documentation index, see [llms.txt](https://peardao.gitbook.io/docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://peardao.gitbook.io/docs/what-is-peardao/how-peardao-works.md).
# How PearDAO works
**Decentralized P2P Marketplace**
Peer-to-peer (P2P) trading is a type of cryptocurrency exchange method that allows traders to trade directly with one another without the need for a centralized third party to facilitate the transactions. A P2P platform serves as the trade facilitator by providing a platform for buyers and sellers to broadcast their offers. At the same time, it can ensure the safety and timely delivery of digital assets during trade execution.
Unlike Exchange 1.0 which is register-based and controlled by centralized server, or Exchange 2.0 where anonymous users trade on the chain with an automated market makers mechanism and are only limited to on-chain assets, we want to bring users a new era, which is a trading platform governed by DAO for assets both on and off-chain.
With Pear P2P Marketplace, we encourage trading based on the user’s mutual trade agreement. Anyone who intends to sell their digital assets can simply search for an existing buy advertisement (Ad) on the platform and establish a trade with the counterparty. This means you have more freedom to pick the best rate and payment method for your needs—and with lower costs. You can also better safeguard your privacy because you're dealing directly with a counterparty.
**Example Walkthrough**
Anyone can create an ad on the Pear P2P Marketplace. For example, someone might be interested in creating an ad to sell Crypto ( BUSD, USDT, USDC ) for Fiat using the Bank Transfer payment method. Then crypto or on-chain assets will be escrowed in smart contract.
Next, Buyer places an order on the ads available on the Pear Marketplace. Then the buyer and seller will communicate using an encrypted chat tool and the buyer will send Fiat currency to the seller using the Bank Transfer payment method. The buyer will sign the transaction that the Fiat payment has been completed. Once the Seller confirms that it has received payment from the Buyer, the Seller can release an on-chain escrow so that the crypto or on-chain assets will be sent directly to the buyer's wallet address via a smart contract.
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After the trade is completed, both Buyer or Seller will earn $PEX Trading Reward which can be claimed within 30 days.
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