A moderator is a type of user on the OpenBazaar network who helps offer a secure payment method called moderated payment. The buyer adds a moderator and then pays their Bitcoins into a sort of escrow address, called a multisignature or “multisig” address, which is then jointly controlled by the buyer, the vendor, and the moderator. In order for the funds to leave the multisig, any two of these parties need to agree how to release the funds. (Read more about how multisig accounts work here: Can Bitcoin and Multisig Reduce Identity Theft and Fraud?)
In most cases a transaction will go through smoothly, the buyer and vendor are both happy, and they agree to release the funds. In that case the moderator isn’t even aware they were chosen to provide escrow and they don’t receive a fee. If the transaction doesn’t go smoothly and the buyer or seller open a dispute, then the moderator will provide resolution. The moderator will determine which party is at fault, and will then join with the winning party to release the funds (either release payment to the vendor or refund the buyer). In return for offering this service, the moderator will receive a percentage of the transaction called a dispute fee. These fees are displayed when selecting a moderator and can be viewed by visiting the moderator’s page as well.
Read more: How To Choose a Good Moderator on OpenBazaar