Nothing is perfect but I think in the majority of cases it'll work as well as a trustable third party but without requiring one. If someone with much more money wants to screw people over at least they'll be paying a non-nominal amount. For bigger items that kind of attack would get expensive quickly.
The amount of collateral is configurable by sellers, and since buyers will soon be able to message sellers that means it's negotiable.
The amount of collateral is configurable by sellers, and since buyers will soon be able to message sellers that means it's negotiable.