Holdback

Retention money
nobody can sit on

A Solana program keeps a subcontractor's 5% in a vault owned by nobody, and releases it automatically when the warranty ends.

Stablecoin railsAnchor · Token-2022 · Solana ActionsFirst test market: Kazakhstan

Colosseum · 2026

The problem

£8 bn

of subcontractors' own money went unpaid in England over 3 years

44%

of contractors lost retention because an upstream company went insolvent

£27,300 lost per contract on average

43%

of US subcontractors wait over 90 days for final payment and retainage

nearly one in five waits 6 months or more

92%

of US subcontractors floated payroll from their own pocket while waiting to be paid

survey of 492 firms, May 2026

Sources: Gowling WLG 2025 (UK government figures); Fenwick Elliott; Siteline "State of Subcontractor Billing 2026"

How it works today

The client keeps 5% of every payment "as a warranty" for 1–2 years

$190,000 paid to the subcontractor

$10,000 held back

A $200,000 contract. The held-back $10,000 sits in the client's own account, mixed with their other money.

Delayed

The warranty ends and the answer is "next month". The subcontractor chases the money.

Spent

For the client it is free working capital for the next project.

Lost

If the client goes bankrupt, the retention goes to their creditors. As happened with Carillion in 2018.

Why now

Governments admit the problem, but their fixes are blunt

New Zealand · 2023

Law: retention must be held in trust in a separate bank account, with a ledger per contract.

Costly, and still controlled by the party that owes the money.

United Kingdom · 2025

After a consultation, cash retentions are to be banned, not before 2027.

The client loses the quality guarantee.

Kazakhstan · 2025–26

KZTE tenge stablecoin pilot and a KASE × Solana Foundation MoU on tokenization.

Money is arriving on-chain in the local currency.

Holdback is the third way: the retention stays, but it cannot be abused.

Sources: Construction Contracts (Retention Money) Amendment Act 2023 (NZ); Kennedys and Beale & Co (2025); Superteam Kazakhstan deck 2026

The solution

Four rules enforced by a program, not by people

01 · SPLIT

Each invoice is split in one transaction: 95% to the subcontractor, 5% into the vault.

→

02 · VAULT

The vault is a program address with no key. The client cannot take it back.

→

03 · DEFECT

Only the cost of a defect is frozen. An arbiter settles disputes.

→

04 · RELEASE

After the date, anyone clicks a Blink and the money goes to its owner.

No calls, no begging, no lawsuits. The subcontractor sees the money in real time.

What a bank cannot do

Retention becomes an asset you can sell today

The subcontractor needs cash now, not in 2 years. They list their claim on the vault at 90%.

A funder pays, and the claim moves to them in the same transaction. Nobody can take the money without handing over the claim.

When the warranty ends, the vault pays the funder.

Subcontractor gets now	$4,050
Funder receives at the end	$4,500
Funder's return	+11%
Funder's risk	the money is already in the vault, not a promise to pay

How we use Solana

A real program, not a wallet button

Anchor program

8 instructions: create and accept contract, pay with split, raise defect, resolve, list claim, buy claim, release.

PDA vault

The vault has no private key. Only the program can sign a transfer, and only by the rules.

Atomicity

Splitting a payment and selling a claim are single transactions: all or nothing.

Token-2022

Works with SPL Token and plain Token-2022 mints, such as USDC. Risky token extensions are refused.

Solana Actions

The release button is a Blink: a link anyone can click.

Cost

0.000005 SOL per action. The whole 8-transaction scenario costs a fraction of a cent.

Open source · 22 automated tests pass on a local Solana validator (solana-test-validator 2.3, Anchor 0.31)

Working demo

Market

Retention is standard on construction sites almost everywhere

Country	Called	Typical size	What we know
England	retention	3–5%	£3.2–5.9 bn is held at any time during a year
United States	retainage	5–10%	43% of subcontractors wait over 90 days
New Zealand	retention money	5–10%	law requires a separate trust account
Canada	holdback	10%	statutory holdback in provincial law
Russia, Kazakhstan	warranty retention	5%	a common clause in contractor agreements (Kazakhstan to be verified by interviews)

Model (hypothesis): 0.5% of held amount from the client plus a fee on claim sales.

Sources: Fenwick Elliott; Siteline 2026; NZ Act 2023. Typical sizes in the US, Canada and NZ are indicative and need verification

Alternatives

Why this beats what exists

	Client's own account	Bank trust account	Ban on retention	Holdback
Protected from bankruptcy	no	yes	n/a	yes*
Paid out without asking	no	no	n/a	yes
Subcontractor sees the money	no	on request	n/a	in real time
Client keeps the quality guarantee	yes	yes	no	yes
Cash before the warranty ends	no	no	n/a	sell the claim

Among 5,428 projects in the Colosseum database, none is about construction retention.

* the money is outside the client's account; how a court treats it in a bankruptcy has not been tested

How we make money

Three revenue lines, not a fee on the vault

Per contract, $10,000 retention, 12 months	Income
0.5% fee on the held amount	$50
Fee when a claim is sold early	$13.5
Flat contract fee (replaces a bond premium)	$75
Share of vault yield (not built)	$90

The vault fee alone is thin: $50 a year on a $200,000 subcontract.

With the first three lines, break-even for a team of three is about 780 contracts a year, 3.6% of Kazakhstan.

Kazakhstan is the pilot. England alone is £16–30 m a year at the same fee.

All prices are our assumptions, to be replaced by interview answers. Details: docs/BUSINESS-MODEL.md

What we checked

Security and law: fixed and still open

Security self-review

4 weaknesses found and fixed with tests: arbiter chosen by the client alone, a silent arbiter locking the vault, buyer exposed to a shrinking vault, token extensions that break payouts.

Open: not audited; the upgrade key must go to a multisig before real money; a stablecoin issuer can freeze a vault.

Legal

Is the vault safe if the client goes bankrupt? Courts have protected retention held on trust in a separate fund. Nobody has ruled on a program-owned vault.

Open: a contract clause that declares the trust, a lawyer's opinion, rules on claim sales and stablecoins. Devnet and test tokens until then.

Prototype, not audited. Details: docs/THREAT-MODEL.md, docs/LEGAL.md

Plan

From Shymkent to countries where the law demands it

Now

10 interviews: 7 subcontractors and 3 developers in Shymkent. Goal: 2–3 letters of intent.

5 weeks

Devnet pilot on one real contract with test money, plus an auditor dashboard.

New Zealand and Australia: a cheaper way to comply with trust-account laws. Then the US.

Biggest risk

Clients benefit from holding the money. Our answer: the law (NZ), better subcontractors, and an alternative to the UK ban.

Not yet verified

How often retention is delayed in Kazakhstan, and what a developer would pay. This is what we learn first.