Blockchain Digital Identity Derivatives Archetype Transaction Processing
Find Innovative SolutionsGenerate Solutions
Solution Overview
Problem
Private equity investment transactions face high barriers due to complexity, lack of transparency, and difficulty in pricing derivatives of non-tradable assets, limiting accessibility and adoption of private equity derivatives frameworks, especially in real-time processing.
Innovation Solution
A blockchain-verified digital-identity-and-derivatives-archetype-based system that uses smart contracts, encrypts data, and employs multi-primitive crypto mapping to securely and efficiently process transactions by converting data into machine-readable digital identities and leveraging publicly available data for pricing, ensuring transparency and computational speed.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If conventional blockchain techniques are used to store and verify transaction data, then data security and transparency are improved, but transaction processing speed deteriorates due to significant time and computational overhead
Solution Approach 1:
The system segments blockchain data into homogeneous groups (e.g., all stock market indices in one block, all images in another) to optimize retrieval efficiency. This segmentation allows parallel processing and reduces the computational overhead of searching through heterogeneous data, thereby improving transaction processing speed while maintaining blockchain security
Solution Approach 2:
The system performs preliminary actions by pre-organizing and indexing blockchain data according to homogeneity criteria before transactions occur. This pre-structuring enables rapid data retrieval and validation during real-time transactions, eliminating the need for extensive searching and computational verification at transaction time
2Loss of information
If extensive searching of blockchain records is performed to obtain required data, then data completeness is improved, but time consumption increases making results outdated
Solution Approach 1:
By segmenting blockchain records into homogeneous groups with organized indexing, the system enables targeted retrieval of specific data types without searching the entire blockchain. This maintains data completeness by ensuring all relevant records are systematically organized while dramatically reducing retrieval time through efficient search paths
Solution Approach 2:
The system introduces an intermediary indexing layer that sits between the blockchain storage and transaction processing. This intermediary structure pre-organizes data relationships and provides direct access paths to required information, eliminating the need for extensive blockchain searching while ensuring data completeness through systematic organization
3Adaptability or versatility
If private equity derivatives framework is made more accessible to lower-capital investors, then market participation is improved, but pricing accuracy deteriorates due to complexity in valuing non-tradable assets
Solution Approach 1:
The system creates a universal pricing framework that handles multiple asset types (tradable and non-tradable) through standardized blockchain-verified processes. This multi-functional approach enables accurate pricing of private equity derivatives by applying consistent valuation methodologies across different asset classes, making the system accessible to various investor types while maintaining pricing precision
Solution Approach 2:
The system implements feedback mechanisms where transaction data and valuation information are continuously recorded on the blockchain and used to refine pricing models. This feedback loop improves pricing accuracy over time by incorporating real-market data, while the transparent blockchain verification builds confidence for broader market participation
Data Source
AI summary
The platform described provides the security, verifiability, and computational speed necessary to implement transactions involving derivatives of private equity assets using smart contracts. All relevant data necessary for the performance of the transactions are converted into encrypted machine-readable digital identities that are stored in a data storage and a blockchain storage. References to location within the storages of the digital identities are included in a derivatives archetype associated with one derivative instrument. Price of the derivative instrument can similarly be determined using a pricing archetype that references locations of the digital identities of data items as well as the formula necessary for the determination of the price. The pricing engine further leverages digital identities price proxies for the underlying from publicly available data. Data security can further be amplified through a use of multi-primitive crypto mapping. The price and the derivatives archetype are used to create a smart contract.