Commodities trading platform and method

Abstract

The present invention is directed to a computer-implemented method and platform for trading a commodity. It comprises: issuing a commodity token to an initial buyer at an initial token price, the token comprising a strike price for subsequent purchase of a predetermined amount of the commodity, wherein the token is secured using a decentralised digital ledger technology; receiving a request from a user to redeem the token; verifying the token; and if verified, selling the amount of the commodity to the user, at the strike price, and burning the token. The method may enable the trading of the token. The commodity may be gold, and in particular may be unmined gold to be mined at a particular location.

Description

COMMODITIES TRADING PLATFORM AND METHODField of the invention

[0001] The present invention relates to a commodities trading platform. The invention has particular application to gold and gold mines, although the invention has broader application.Background

[0002] Any discussion of the prior art throughout the specification should in no way be considered as an admission that such prior art is widely known or forms part of the common general knowledge in the field.

[0003] Gold mines require substantial upfront capital. Even after exploring and identifying a gold deposit, the step of actually establishing a mine involves sizeable upfront investments in equipment, infrastructure, and labour. For example, this often includes building roads, setting up power supplies for the mine, and purchase of high-cost mining equipment.

[0004] There are also costs associated with legal and environmental regulations in most jurisdictions, and mining companies must obtain permits regarding issues such as land use, water management and waste disposal. Conducting any necessary assessments, and ensuring compliance with these requirements, can be a long and expensive process.

[0005] One challenge faced by mining companies is that all of this upfront capital is required before they have begun earning revenue from the mined gold. However, they are typically unable to sell gold forward, due to the risk of margin calls if the gold price moves against them.

[0006] For retail investors, fluctuating gold prices make it a risky investment -the gold mining sector is highly volatile, and there are often issues with political instability in mining regions. Retail investors would like to lock in a current spot price on gold, but they lack access to a gold price in perpetuity or until production.

[0007] In relation to mining company investors, they are often unwilling to invest without funding transparency. They are typically very concerned about the proper use of invested funds, as they face the challenge of committing capital for long-term projects whileshouldering the risk of potential delays, cost overruns, or even project failures. In addition, the profitability of a gold mine is highly dependent on gold prices.

[0008] The present invention was conceived with these challenges in mind.

[0009] Unless defined otherwise, all technical and scientific terms used herein have the same meaning as commonly understood by one of ordinary skill in the art to which this invention belongs. Although any methods and materials similar or equivalent to those described herein can also be used in the practice or testing of the present invention, a limited number of the exemplary methods and materials are described herein.Summary of the invention

[0010] In a first aspect of the present invention, there is provided a computer-implemented method for trading in a commodity, the method comprising: issuing a commodity token to an initial buyer at an initial token price, the token comprising a strike price for subsequent purchase of a predetermined amount of the commodity, wherein the token is secured using a decentralised digital ledger technology; receiving a request from a user to redeem the token; verifying the token; and if verified, redeeming the token to the user, at the strike price, and burning the token.

[0011] The user and the initial buyer may be the same person or entity. However, the use of decentralised digital technology, such as blockchain, means that the token may be traded from the initial buyer to a subsequent user. Accordingly, the user and the buyer may be different entities. The method may further comprise trading the token from the initial buyer to the user, wherein ownership of the token is secured using the decentralised digital ledger technology.

[0012] The commodity may be a mining product. The commodity may be a mineral commodity. The commodity may be a metal. The commodity may be a precious metal, for example gold. The commodity may be unmined gold to be mined at a particular location.

[0013] The amount may be an ounce or more of the commodity, or a fraction thereof.

[0014] In embodiments, the token is issued before the commodity is obtained, and redeemable after the commodity is obtained. In this way, the purchase of the token can be used to fund the steps required to obtain the commodity (e.g. to mine the gold).

[0015] The platform may send, and the user may receive, a notification that the commodity has been obtained. This indicates that the token is redeemable. The notification may be sent to the current holder of the token.

[0016] The step of issuing the commodity token may include receiving funds at the initial token price, and the method may further comprise providing the initial buyer with transparency and / or control over the distribution of the funds. For example, the funds may be held in escrow until being distributed in accordance with a pre-approved plan for the funds. The pre-approved plan includes pre-approved amounts for distribution at a stage of obtaining the commodity, although some limited variation may be permitted.

[0017] The strike price may be different for different tokens, even if they relate to the same commodity, depending on the time at which the token is issued. This allows earlier issued tokens to better reflect the risk associated with e.g. constructing a mine to obtain the commodity.

[0018] The redemption of the token may comprise sending, to the user, the predetermined amount of the commodity. Alternatively, redeeming the token may comprise sending, to the user, funds representing the difference between the strike price and the current market price of the commodity, less the initial token price. These alternatives may be selectable by the user.

[0019] In a second aspect of the present invention, there is provided a computer- implemented method for trading in a commodity, the method comprising: issuing a commodity token to an initial buyer at an initial token price, the token comprising a strike price for subsequent purchase of a predetermined amount of the commodity, wherein the token is secured using a decentralised digital ledger technology; andtrading the token from the initial buyer to another use, wherein the trade of the token is secured using the decentralised digital ledger technology.

[0020] The first and second aspects of the invention may be combined, and features described in relation to the first aspect of the invention may be utilised in accordance with the second aspect of the invention.

[0021] In another aspect of the present invention, there is provided a commodities trading platform comprising: at least one processor; a memory in communication with the at least one processor, configured with instructions for directing the processor to perform the method of any one of the previous aspects of the invention.

[0022] The platform may be implemented using mobile computing device(s), such as apps on mobile phones or tablets, using internet browsers, or through dedicated applications on other computers. Requests from users may be received from mobile computing devices.

[0023] It will be appreciated that, unless otherwise stated, details and variations described for one aspect of the invention equally apply to other aspects of the invention.

[0024] A detailed description of one or more embodiments of the invention is provided below along with accompanying figures that illustrate by way of example the principles of the invention. While the invention is described in connection with such embodiments, the invention is not limited to any embodiment. On the contrary, the scope of the invention is limited only by the appended claims and the invention encompasses numerous alternatives, modifications, and equivalents. To illustrate this, numerous specific details are outlined in the following description to provide a thorough understanding of the present invention.

[0025] The present invention may be practised according to the claims without some or all these specific details. For clarity, technical material that is known in the technical fields related to the invention has not been described in detail so that the present invention is not unnecessarily obscured.Brief Description of the Drawings

[0026] Embodiments of the invention will now be described by way of example only with reference to the accompanying drawings.

[0027] Figure 1 is a timeline of the process of raising and using funds from sale of commodity tokens, according to an embodiment of the present invention.Detailed Description

[0028] In an embodiment of the present invention, there is provided a commodities trading platform which, comprises at least one server and may also comprise multiple user devices. The server and the user devices each comprise at least one processor and a memory configured with instructions directing the processor to perform operations per the below functionality. The user devices may comprise desktop devices or mobile computing devices (such as laptops, tablets, or mobile phones). The platform of the present invention may be accessed using a browser, or a dedicated application such as an app on a mobile phone.

[0029] The platform may comprise a database storing information regarding users of the platform, whereby users may purchase, trade or redeem tokens in accordance with the present invention. The user information may comprise name and address details, or other identifying and contact information. It may in some embodiments comprise information about the volume of a commodity held by a user.

[0030] The platform of the present invention is configured to issue tokens using a Decentralised Ledger Technology (DLT). The DLT may be provided directly on the platform itself, or the platform may interact with an external DLT as required to issue or burn tokens.

[0031] Different DLTs may be used in different embodiments of the invention. Blockchain is a decentralised digital ledger technology that enables secure, transparent and tamper-proof recording of transactions between parties. It is commonly associated with cryptocurrency, but in the present invention, its use can be extended to power the use of commodity tokens.

[0032] The blockchain is a distributed ledger that records transactions securely and transparently. Each block in the chain contains a cryptographic hash of the previous block, which prevents the alteration of past transactions, without the alteration being detected. This creates a highly secure system, as each transaction on the blockchain is verified and approved by multiple parties in the network before it is added to the chain.

[0033] Because blockchain transactions are verified and recorded in a decentralised and transparent way, they are often seen as a potential solution for a wide range of industries and use cases. These include financial services, supply chain management, voting systems, and more.

[0034] There are several different types of blockchain, including public, private, and consortium blockchains. Public blockchains are open to anyone and allow for anyone to participate in the network. Private blockchains, on the other hand, are permissioned and only allow certain users to participate in the network. Consortium blockchains are a hybrid of the two, allowing a select group of users to participate in the network while still maintaining a level of decentralisation.

[0035] The DLT utilised by the present invention can maintain a distributed ledger across one or more nodes of the blockchain. A node can include one or more computing devices capable of storing some or all the distributed ledger and / or executing transactions provided to the node. The distributed ledger can also store a record of transactions performed on the blockchain. The blockchain may utilise various encryption standards, according to different embodiments of the present invention.

[0036] As described in more herein, the blockchain tokens can be issued and burnt. Issuing a new token can include creating one or more tokens on the blockchain.

[0037] In a particular embodiment described in more detail below, the commodity is gold, and the tokens (which are issued on a blockchain) can be referred to as "Gelt Coins". Gelt Coin tokens enable the tokenisation of unmined gold, which helps both token buyers and mining companies. In particular, the tokenisation model allows mining companies to sell gold forward in tranches without the risk of margin calls, enabling them to raise funds for various stages of development.

[0038] In this embodiment, buyers may have the opportunity to buy Gelt Coin tokens at a cost that is lower than a traditional call option fee. A strike price is associated with each Gelt Conin. This purchase effectively fixes the price of gold at the strike price.

[0039] The funds generated from sale of the tokens can be utilised to support various stages of mine development, ranging from initial scoping studies to providing essential working capital during the startup phase, assisting the project's progression towards gold production.

[0040] Once the mining project reaches the stage of gold extraction, token holders can purchase gold at the predetermined strike price associated with their token(s), at which point the token(s) are burnt.

[0041] Alternatively, at any point, token holders can sell their tokens, capitalising on potential market gains. This tradability is a key feature of Gelt Coins, which allows buyers to benefit from gold price movements without the need to wait for actual gold production.

[0042] Another feature of the invention is that it can provide additional transparency to buyers. As depicted in Figure 1 , funds raised through token sales can be held in escrow by the token issuer, and released to the mining company according to a pre-approved spending plan. This addresses a number of key concerns in mining endeavours, including transparency, and control over fund utilisation.

[0043] In some embodiments, suppliers may need to be pre-approved, and payments made in accordance with the approved quotes. In some embodiments, expenses may have an agreed percentage variation, providing some flexibility while maintaining accountability over the way funds are spent. For example, a 10% variation may be permitted to pre-approved expenditure.

[0044] In this embodiment, the mining company's obligation to deliver gold is based on extraction. This ties the Gelt Coin's (token's) value directly to the mining process, creating a unique risk-reward profile. The particular strike price of a token can be modified to reflect the risk taken by token buyers. This helps compensate buyers for the level of uncertainty associated with different stages of the mining process. For example, if funds are used for a feasibility study with unknown extraction costs, the strike price may be below the prevailing spot price of gold. A lower strike price compensates buyers for the higher risk associated with early-stage mining projects. Alternatively, if the token is issued during the construction phase, the strike price may be higher - for example, it may simply align with market prices at the time of issue, reflecting reduced risk as the project moves closer to actual gold production.

[0045] For buyers, the Gelt Coin provides a low entry price. Through tokenisation, the amount of funds required to participate in gold mining ventures is significantly reduced, allowing buyers to more easily gain exposure to sectors that might otherwise be out of reach due to the high capital requirements. However, buyers' financial exposure is limited to the cost of the token, effectively protecting them from additional financial commitments. Ingeneral, there is also an inherent security provided by the physical gold resource (or other commodity) in the ground. This provides buyers with a unique level of assurance, compared to purely digital assets or paper-based gold investments; a Gelt coin token is directly tied to a physic resource that exists in a specific location, thereby offering a level of security that is rare in the field of digital investments. By backing each token with unmined gold, Gelt Coin creates a direct link between the digital asset and a real-world commodity. Then, as the gold is extracted and refined, the value of the Gelt Coins can potentially increase, reflecting the realised value of the underlying asset.

[0046] Furthermore, in this embodiment, Gelt Coin tokens do not have an expiry date, which means they offer long-term value for buyers, allowing them to hold their token(s) as long as they see fit, without the pressure of time-based depreciation.

[0047] In this embodiment, buyers may redeem a Gelt Coin token by acquiring physical gold at the strike price. In other variations of the invention, buyers may also be offered different ways of redeeming their tokens. They can have the choice of acquiring physical gold at the strike price, or simply being paid the difference between the strike price of the token and the spot price of gold, allowing buyers to tailor their strategy to their specific needs and market conditions.

[0048] For mining companies, the Gelt Coin tokens provide them with a new avenue for attracting funds, and one that does not come with the risk of margin calls.

[0049] The invention also has a high potential for leverage. The Gelt Coin, in this example, can be sold at a low token price to provide a low entry cost, making it more accessible to a wider range of buyers (compared to traditional gold funding options which have a high entry cost based on the spot price of gold).

[0050] A Gelt Coin also provides an option for physical delivery of gold, which is not always available in conventional arrangements, with high transparency due its blockchain-based nature.

[0051] In addition, Gelt Coins may be traded to a different user at any time - including before the physical gold has been mined. This gives users flexibility to decide when to sell their token, depending on their individual circumstances or strategy . Either the token issuer, or the mining company if different, may charge a fee when a Gelt Coin is traded.

[0052] The token may be added to a digital wallet for the token holder. For each trade, the token issuer may track the owner of the token, so that when the gold is mined and becomes available, the token holder can be notified of that fact, for example through their digital wallet. This can prompt the token holder to redeem their token through the platform, if they wish.

[0053] It will be appreciated that although the above example has been used to describe operational details of the invention when the commodity backing the token is gold. However, different commodities may be used in accordance with the present invention, including mining products, metals (such as precious metals), and minerals or ores. In some embodiments, the invention may be applied to farming commodities such as wheat.

[0054] Concerning the computing devices used in the present invention, each computing device will typically include a processor in communication with a memory. The computing device can also include one or more communication interfaces, in communication with the processor and / or memory, capable of sending and receiving data. In several embodiments, the memory is any form of storage storing a variety of data, including, but not limited to, instructions, transaction data, blockchain data, user data and / or machine classifiers. In many embodiments, instructions, the data may be stored using an external server system and received by the computing device using the communications interface.

[0055] The processor can include one or more physical processors communicatively coupled to memory devices, input / output devices, and the like. In one illustrative example, a processor may implement a Von Neumann architectural model and may include an arithmetic logic unit (ALU), a control unit, and a plurality of registers. In many aspects, a processor may be a single core processor that is typically capable of executing one instruction at a time (or process a single pipeline of instructions) and / or a multi-core processor that may simultaneously execute multiple instructions. In a variety of aspects, a processor may be implemented as a single integrated circuit, two or more integrated circuits, and / or may be a component of a multi-chip module in which individual microprocessor dies are included in a single integrated circuit package and hence share a single socket. Memory can include a volatile or non-volatile memory device, such as RAM, ROM, EEPROM, or any other device capable of storing data. Communication devices can include network devices (e.g., a network adapter or any other component that connects a computer to a computer network), a peripheral component interconnect (PCI) device, storage devices, disk drives, printer devices, keyboards, displays, etc.

[0056] In an embodiment, the system is a tangible, non-transitory, machine-readable medium storing instructions that when executed by one or more processors effectuate operations as described in this specification.

[0057] Although specific architectures for computing devices per embodiments of the invention are described above, any of a variety of architectures, including those that store data or applications on disk or some other form of storage and are loaded into memory at runtime, can also be utilised. Additionally, any of the data utilised in the system can be cached and transmitted once a network connection (such as a wireless network connection via the communications interface) becomes available. In several aspects, each computing device provides an interface, such as an API or web service, which provides some or all the data to other computing devices for further processing. Access to the interface can be open and / or secured using any of a variety of techniques, such as by using client authorisation keys, as appropriate to the requirements of specific applications of the disclosure. In a variety of embodiments, a memory includes circuitry such as, but not limited to, memory cells constructed using transistors, that store instructions. Similarly, a processor can include logic gates formed from transistors (or any other device) that dynamically perform actions based on the instructions stored in the memory. In several embodiments, the instructions are embodied in a configuration of logic gates within the processor to implement and / or perform actions described by the instructions. In this way, the systems and methods described herein can be performed utilising both general-purpose computing hardware and by single-purpose devices.

[0058] The foregoing provides one example of an embodiment of the present invention. However, numerous variations are possible. The present invention can also be implemented in numerous ways, including as processes, apparatus, systems, or (non-transitory) computer readable media.

[0059] Throughout this specification and the claims that follow unless the context requires otherwise, the words 'comprise' and 'include' and variations such as 'comprising' and 'including' will be understood to imply the inclusion of a stated integer or group of integers but not the exclusion of any other integer or group of integers.

Claims

Claims1. A computer-implemented method for trading in a commodity, the method comprising: issuing a commodity token to an initial buyer at an initial token price, the token comprising a strike price for subsequent purchase of a predetermined amount of the commodity, wherein the token is secured using a decentralised digital ledger technology; receiving a request from a user to redeem the token; verifying the token; and if verified, redeeming the token to the user, at the strike price, and burning the token.

2. The computer-implemented method of claim 1 , wherein the user and the initial buyer are the same entity.

3. The computer-implemented method of claim 1 , wherein the user and the initial buyer are different entities.

4. The computer-implemented method of claim 3, further comprising trading the token from the initial buyer to the user, wherein the trade is secured using the decentralised digital ledger technology.

5. The computer-implemented method of any preceding claim, wherein the decentralised digital ledger technology comprises a blockchain technology.

6. The computer-implemented method of any preceding claim, wherein the token is issued before the commodity is obtained, and redeemable after the commodity is obtained.

7. The computer-implemented method of claim 6, further comprising sending a notification to the user that the commodity has been obtained.

8. The computer-implemented method of any preceding claim, further comprising obtaining the commodity using, at least in part, funds obtained from the initial token price.

9. The computer-implemented method of any preceding claim, wherein the step of issuing the commodity token includes receiving funds at the initial token price, and the method further comprises: providing the initial buyer with transparency and / or control over the distribution of the funds.

10. The computer-implemented method of claim 10, wherein the funds are held in escrow until being distributed in accordance with a pre-approved plan for the funds.11 . The computer-implemented method of claim 9 or 10, wherein the pre-approved plan includes pre-approved amounts for distribution at a stage of obtaining the commodity.

12. The computer-implemented method of claim 11 , wherein limited variation around the pre-approved amounts is permitted.

13. The computer-implemented method of any preceding claim, wherein the strike price is different for different tokens relating to the same commodity, depending on the time at which the token is issued.

14. The computer-implemented method of any preceding claim, wherein redeeming the token comprises sending, to the user, the predetermined amount of the commodity.

15. The computer-implemented method of any one of claims 1 to 13, wherein redeeming the token comprises sending, to the user, funds representing the difference between the strike price and the current market price of the commodity, less the initial token price.

16. The computer-implemented method of any preceding claim, wherein the commodity comprises a mining product.

17. The computer-implemented method of any preceding claim, wherein the commodity is a mineral commodity.

18. The computer-implemented method of any preceding claim, wherein the commodity is a metal.

19. The computer-implemented method of any preceding claim, wherein the commodity is a precious metal.

20. The computer-implemented method of any preceding claim, wherein the commodity is gold.

21. The computer-implemented method of any preceding claim, wherein the amount is an ounce.

22. The computer-implemented method of any preceding claim, wherein the predetermined amount of the commodity is to be obtained from a particular location.

23. A computer-implemented method for trading in a commodity, the method comprising: issuing a commodity token to an initial buyer at an initial token price, the token comprising a strike price for subsequent purchase of a predetermined amount of the commodity, wherein the token is secured using a decentralised digital ledger technology; and trading the token from the initial buyer to another use, wherein the trade of the token is secured using the decentralised digital ledger technology.

24. A commodities trading platform comprising: at least one processor;a memory in communication with the at least one processor, configured with instructions for directing the processor to perform the method of any one of claims1 to 23.

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