Decentralized Trading With Autonomous Agents and Order Book Verification
Find Innovative SolutionsGenerate Solutions
Solution Overview
Problem
Decentralized exchanges (DEX) face limitations such as restricted asset selection, complexity, liquidity issues, user unfriendliness, and security concerns, discouraging users from engaging in diverse and secure trading.
Innovation Solution
A decentralized transaction system employing autonomous agent-based trading with a decentralized order book model, utilizing smart contracts and a distributed ledger to facilitate secure, transparent, and efficient peer-to-peer transactions through agent-based and order book-based verification.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If decentralized exchange is implemented to enable peer-to-peer trading without intermediaries, then trading autonomy and security are improved, but system complexity and difficulty of operation increase
Solution Approach 1:
The patent introduces an order book as an intermediary data structure that mediates between buyers and sellers. The order book stores and manages buy and sell orders, automatically matching them according to price and time priority. This intermediary mechanism simplifies the trading process by handling order matching logic centrally within the decentralized system, reducing the complexity individuals would otherwise need to manage for peer-to-peer matching.
Solution Approach 2:
The patent segments the trading system into distinct functional components: order placement, order storage in the order book, order matching logic, and trade execution. Each component operates independently but connects through well-defined interfaces. This segmentation allows each part to be optimized and understood separately, reducing overall system complexity while maintaining decentralized trading security.
2Ease of operation
If decentralized exchange limits asset selection to maintain system simplicity, then ease of operation is improved, but adaptability and versatility deteriorate
Solution Approach 1:
The patent implements a universal order book data structure and matching engine that can handle multiple asset types including cryptocurrencies, commodities, and other tradable instruments. The system uses a standardized order representation that accommodates different asset classes, allowing the same core infrastructure to serve diverse trading needs. This multi-functionality enables the system to expand asset selection without proportionally increasing operational complexity.
3Productivity
If decentralized exchange allows direct peer-to-peer trading, then trading efficiency is improved, but liquidity issues arise that restrict large orders
Solution Approach 1:
The order book serves as a liquidity intermediary that aggregates buy and sell orders from multiple participants. By collecting and displaying the order book state, the system provides visibility into available liquidity at different price levels. This allows traders to execute large orders by breaking them into smaller chunks that can be filled against existing orders in the book, preventing significant market impact while maintaining trading efficiency.
Solution Approach 2:
The patent implements feedback mechanisms where the order book continuously updates and broadcasts price and volume information to all participants. This real-time feedback enables traders to adjust their strategies based on current market conditions, improving liquidity provision. Market makers can respond to order book changes by adjusting their quotes, ensuring continuous liquidity availability even for large orders.
Data Source
AI summary
Disclosed is decentralized transaction system comprising computing nodes to implement platform, computing node(s) is configured to: receive, from first user device (FUD), first request for first trade (FT), first smart contract (FSC) to lock funds for FT; receive, from second user device, second request for second trade (ST), second smart contract (SSC) to lock trade subject (TS) for ST; send, to agent database (AD), first notification, for first autonomous agent (FAA) associated with first user (FU); second notification, for second autonomous agent (SAA) associated with second user (SU); create communication interface, FAA configured to send first set of trade parameters (FSOTP), first digital signature (FDS) to SAA, facilitate agent-based trade match, SAA configured to perform trade match, send FDS, FSOTP and second set of trade parameters (SSOTP) to SSC; employ processing interface for enabling order book-based trade verification, SSC to execute transfer of funds and trade subject to SU and FU, respectively.