Blockchain Shared Ledger for Secure Asset Transfers
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Solution Overview
Problem
Traditional asset transfer processes between brokerage firms are manual, time-consuming, and risk-prone, particularly when assets are used as collateral for loans, as they can lead to insufficient collateral due to asset value fluctuations during the transfer period.
Innovation Solution
The implementation of a blockchain-based electronic shared data structure to facilitate asset transfers between computing systems, ensuring secure, transparent, and efficient transactions by recording asset and loan details on a shared ledger.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If manual transfer process is used between brokerage firms, then flexibility and adaptability are maintained, but transfer time is excessive and reliability is compromised due to asset value fluctuations
Solution Approach 1:
A blockchain-based intermediary system is introduced between the delivering and receiving brokerage firms. This shared ledger acts as a neutral mediator that automatically records asset transfers and loan collateral changes in real-time, eliminating the need for manual back-and-forth communication while ensuring both parties have access to the same authoritative data, thus resolving the contradiction between maintaining flexibility and reducing transfer time.
Solution Approach 2:
The system performs preliminary actions by pre-establishing the blockchain ledger and pre-configuring smart contracts that define transfer rules and collateral requirements before the actual transfer occurs. This allows the transfer process to execute automatically upon initiation, eliminating delays associated with manual approval processes while maintaining reliability through pre-validated rules.
2Productivity
If unsecured loan is provided during transfer period, then delivering company receives funding, but receiving company faces risk of insufficient collateral due to asset value changes
Solution Approach 1:
The blockchain system implements continuous feedback by automatically monitoring asset values and updating collateral status in real-time on the shared ledger. Both delivering and receiving companies can query the current collateral status at any point during the transfer process, allowing them to take corrective actions if asset values fluctuate adversely, thus maintaining reliability while enabling efficient transfers.
Solution Approach 2:
The blockchain ledger serves as an intermediary that provides a single source of truth for collateral status to both parties. Instead of one party having to trust the other's word about collateral adequacy, the immutable ledger independently verifies and records the current state, eliminating the need for unsecured loans while maintaining transfer efficiency through automated verification.
3Adaptability or versatility
If manual hand-shake process is used, then parties can negotiate terms flexibly, but information transparency and update timeliness are insufficient
Solution Approach 1:
The blockchain system provides universal functionality by combining multiple capabilities in a single platform: it enables flexible negotiation through smart contract configuration, ensures information transparency through the immutable shared ledger, and automates execution through programmed rules. This multi-functional approach allows parties to maintain negotiation flexibility while simultaneously achieving information transparency that manual processes cannot provide.
Solution Approach 2:
The system creates accurate digital copies of all transfer terms, asset details, and collateral status on the blockchain ledger. These immutable copies ensure that both parties have access to identical, verified information, eliminating information asymmetry while preserving the flexibility to negotiate terms before they are encoded into the smart contract.
Data Source
AI summary
A method may include receiving at a receiving system an electronic request to transfer assets, included in an account of a user at a delivering system, to the receiving system; generating an electronic transaction record, the electronic transaction record identifying the user, the assets, and transfer information related to the assets; adding the electronic transaction record to a shared ledger data structure; in response to the adding: transmitting an indication to the delivering system that the electronic transaction record was added; and transmitting a notification to computing nodes associated with the shared ledger data structure that the shared ledger data structure was updated; after transmitting the indication, receiving confirmation from a third-party system that the assets were successfully transferred; and in response to the confirmation, updating an account database at the receiving system indicating a transfer of the assets