He could post a secret in the decrypted text on the page that, once submitted to the chain, fulfills the contract and transfers the ETH. I know very little about smart contracts but I thought this is what they’re good at… “if a value is posted with a sha512 hash that matches x, the contract is fulfilled”, and put the value on the page, encrypted, and ask hackers to decrypt it.

It doesn’t necessarily prove that the encrypted key is valid, but it proves that the author put some money up on the chain at least. It could always be that the decrypted text doesn’t provide the key that fulfills the contract, but ultimately that isn’t a solvable problem. You can’t prove a claim about some encrypted text without someone having the ability to decrypt it.

But then you don’t need to have a smart contract, simply posting public key of the wallet is enough (to verify the content of the wallet). The contract at most provides an escrow, but even that isn’t really the case since presumably the originator has the key to pull the money (since he knows the secret key).

Proving that an encrypted text has the private key is possible for some encryption schemes through zero knowledge proofs, but I guess not in this case in particular.