Cross-Chain Asset Settlement Using Coordinated Non-Custodial Transfer
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Solution Overview
Problem
Current digital asset settlement systems face inefficiencies due to the lack of reliable, institutional-grade solutions for trading between different blockchains, leading to high operating costs and poor user experience, particularly in decentralized exchanges where computing resource consumption is excessive.
Innovation Solution
A platform that facilitates coordinated, non-custodial digital asset settlement across heterogeneous blockchains using a settlement coordinator that asynchronously receives transaction packages from counterparties, retrieves encryption keys, and transfers assets without needing private keys, while utilizing a credit system for trading and minimizing computing resource consumption.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If decentralized exchanges operate directly through blockchain transactions, then user control and security are improved, but computing resource consumption increases excessively
Solution Approach 1:
The patent introduces a settlement coordinator as an intermediary component that manages cross-chain settlements. This coordinator handles the complex computing tasks of monitoring transactions, verifying transaction packages, and coordinating asset transfers across different blockchains, thereby reducing the computing burden on individual decentralized exchange nodes while maintaining security and user control through cryptographic signatures and non-custodial architecture.
2Loss of energy
If centralized exchanges are used for digital asset trading, then operating costs are reduced, but the platform must access private keys compromising security
Solution Approach 1:
The system enables self-service through automated monitoring and processing. The settlement coordinator automatically monitors transactions facilitated by custodians, retrieves transaction packages, and processes settlements without requiring manual private key management. Users maintain control of their private keys locally, while the system automates the settlement process through cryptographic verification and coordinated execution across blockchains, reducing both costs and security risks.
3Adaptability or versatility
If trading between assets from different blockchains is enabled, then versatility is improved, but computing resource consumption increases
Solution Approach 1:
The patent segments the cross-chain settlement process into distinct components: transaction monitoring by the settlement coordinator, separate retrieval of transaction packages from counterparties, independent verification of each package, and coordinated execution of asset transfers. This segmentation allows the system to handle multiple cross-chain transactions efficiently by processing them in organized stages rather than as monolithic operations, reducing overall computing resource consumption.
Data Source
AI summary
A plurality of computer-based transactions facilitated by each of a plurality of custodians are monitored. A first transaction of the plurality of transactions includes a transfer of an amount of cryptocurrency of a first type by a first counterparty to a second counterparty in exchange for an amount of cryptocurrency of a second, different type. Transaction packages are generated by each counterparty which include requisite information to effect the transfer. A settlement coordinator asynchronously receives (via a computing network) the transaction packages which specify information required to (i) transfer the cryptocurrency of the first type from the first counterparty to the second counterparty on a first blockchain and (ii) transfer the cryptocurrency of the second type from the second counterparty to the first counterparty on a second blockchain. The settlement coordinator after receiving the first request and the second request accesses the first blockchain and the second blockchain to transfer ownership of the cryptocurrency of the first type and the cryptocurrency of the second type to effect the first transaction.