Contingent Asset Token Processing With One-Step Risk Authentication
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Solution Overview
Problem
Existing asset valuation systems do not effectively handle contingent assets, which are subject to contingencies such as approval or payment upon satisfaction of certain conditions, leading to inefficiencies in listing, transaction, and risk assessment.
Innovation Solution
A computing system is developed to manage contingent assets by authenticating their validity, determining risk levels, negotiating listings, and facilitating transactions using blockchain technology to ensure secure and efficient processing.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Adaptability or versatility
If contingent assets are listed and transacted using traditional asset valuation systems, then existing market mechanisms can be utilized, but the system cannot properly handle contingencies leading to inefficiencies in listing, transaction, and risk assessment
Solution Approach 1:
The patent introduces a risk adjustment parameter that modifies the valuation of contingent assets based on the probability of contingency satisfaction. This parameter allows the system to adapt traditional asset valuation methods to handle contingent scenarios, improving both adaptability and risk assessment accuracy by incorporating probabilistic risk factors into the valuation calculation.
Solution Approach 2:
The patent employs a risk assessment intermediary mechanism that evaluates the probability of contingency satisfaction and adjusts asset valuation accordingly. This intermediary layer between the asset and the market enables proper handling of contingent scenarios without disrupting existing market mechanisms, thereby improving both adaptability and reliability.
2Reliability
If contingent assets are subjected to multiple listing and transaction steps to ensure proper risk assessment, then risk can be better evaluated, but the process becomes more complex and time-consuming
Solution Approach 1:
The patent performs risk assessment and probability evaluation as preliminary actions before the actual listing and transaction process. By pre-evaluating the contingency risks and incorporating these assessments into the asset valuation beforehand, the system avoids complex multi-step verification processes during trading, thereby maintaining reliability while reducing operational complexity.
Solution Approach 2:
The patent merges the risk assessment function with the asset valuation function into a single integrated process. Instead of separate listing, verification, and risk assessment steps, the system combines these operations into one streamlined valuation process that incorporates risk adjustments, thereby reducing process complexity while maintaining accurate risk evaluation.
3Ease of manufacture
If traditional asset valuation methods are used for contingent assets, then existing market infrastructure can be utilized, but valuation accuracy is compromised due to the contingent nature of the assets
Solution Approach 1:
The patent modifies existing valuation parameters by introducing risk adjustment factors that account for the contingent nature of the assets. This allows the system to leverage existing market infrastructure while improving valuation accuracy, as the adjusted parameters reflect the true economic value of contingent assets considering the probability of contingency satisfaction.
Solution Approach 2:
The patent creates a modified version of traditional asset valuation methods that incorporates risk adjustments. Instead of completely replacing existing infrastructure, the system copies the fundamental valuation framework and enhances it with contingency-specific parameters, thereby maintaining ease of operation while improving measurement precision.
Data Source
AI summary
A method includes a computing entity issuing to an asset authenticity computing entity a request to select and authenticate a digital record that represents an available contingent asset based on a digital record representing a hypothetical contingent asset to produce a selected contingent asset. The method further includes determining that authenticity information associated with the selected contingent asset indicates that the selected contingent asset matches the hypothetical contingent asset. The method further includes, when approved, generating a smart contract to indicate availability of the selected contingent asset and obtaining a copy of an object distributed ledger. The method further includes causing inclusion of a next block on the object distributed ledger that includes the smart contract to represent the selected contingent asset.