Complex Token Values With Phase Rotation for Fair Ledger Trading
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Solution Overview
Problem
Traditional digital token systems represent value solely by magnitude, leading to unfair advantages for high-frequency traders and privacy issues due to transparent transaction values, and lack efficiency in matching buyers and sellers.
Innovation Solution
Implementing complex number values with magnitude and phase components, using distributed ledgers to record and manage transactions, and smart contracts that match buyers and sellers based on bid and ask prices, phases, and frequencies, ensuring secure and efficient exchanges.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Loss of information
If digital tokens use real number values with transparent magnitudes, then transaction clarity is improved, but privacy is compromised and high-frequency traders gain unfair advantages
Solution Approach 1:
The patent transforms the single-parameter real number value system into a two-parameter complex number system (magnitude and phase). This parameter expansion allows the system to encode transaction information in multiple dimensions, where the phase component can rotate over time to obscure the real monetary value while preserving the ability to verify transaction validity through consensus rules.
Solution Approach 2:
The invention adds a phase dimension to the traditional magnitude-only value system. By representing token values as complex numbers with both magnitude and phase components, the system creates an additional dimensional space for encoding information. The phase can rotate independently over time, providing a dynamic layer that obscures the underlying value from high-frequency traders while maintaining transaction integrity.
2Ease of operation
If traditional order books match buyers and sellers based on magnitude and time, then trading simplicity is maintained, but high-frequency traders with lower latency gain unfair advantages
Solution Approach 1:
The patent introduces dynamic phase rotation to the order book matching system. Instead of static magnitude-based matching, the complex value exchange smart contract continuously rotates the phase of bid and ask prices at assigned frequencies. This dynamic transformation means that order book positions and matching criteria change over time, preventing low-latency algorithms from consistently exploiting static patterns and gaining unfair advantages.
Solution Approach 2:
The system implements periodic phase rotation at assigned frequencies for different bid and ask prices. This periodic action creates a rhythm of change in the order book that disrupts high-frequency trading strategies relying on ultra-low latency. The smart contract periodically updates phases according to assigned frequencies, ensuring that no trader can consistently predict or exploit static price patterns.
3Reliability
If complex number values with rotating phases are used, then privacy and fairness are improved, but system complexity increases
Solution Approach 1:
The complex value exchange smart contract autonomously manages the phase rotation and order book matching without requiring external coordination. The contract self-adjusts phases according to assigned frequencies, automatically matches orders based on evolving complex values, and enforces consensus rules. This self-service capability reduces the need for complex external infrastructure while maintaining the privacy and fairness benefits of complex number representation.
Solution Approach 2:
The smart contract performs multiple functions within a single decentralized system: it manages the order book, rotates phases according to assigned frequencies, matches buyers and sellers based on complex values, and records transactions on the distributed ledger. This multi-functionality consolidates what would otherwise require separate complex systems into a single universal contract, reducing overall system complexity while maintaining enhanced privacy and fairness.
4Reliability
If frequent phase adjustments are made to prevent high-frequency trading advantages, then trading fairness is improved, but bandwidth requirements increase
Solution Approach 1:
The system applies phase rotation at optimized frequencies that are sufficient to prevent high-frequency trading advantages but not excessively high. The smart contract assigns specific frequencies to different bid and ask prices, rotating phases at the minimum necessary rate to disrupt low-latency algorithms while avoiding unnecessary bandwidth consumption from overly frequent adjustments. This partial action approach achieves fairness without excessive energy loss.
Data Source
AI summary
To record an exchange of value in a distributed ledger, a client device interacts with a distributed ledger maintained by participants in a distributed ledger network, for example via a digital wallet. The distributed ledger includes a set of consensus rules including at least one consensus rule that digital token values recorded in the distributed ledger include complex values having at least two components. The client device generates a transaction indicating an exchange of value of a digital token having at least two components, where the transaction is stored in the distributed ledger, and transmits the transaction to at least one other participant in a distributed ledger network of participants maintaining the distributed ledger. The participants append data to the distributed ledger in response to determining that the data satisfies the set of consensus rules.