Digital Asset Conversion via Fiat Intermediary Rate Aggregation
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Solution Overview
Problem
Existing digital asset exchange systems limit users to exchanging digital assets only for fiat currency, physical goods, or a select few digital assets, lacking the capability to convert between different digital assets efficiently and effectively.
Innovation Solution
A system and method that enables the conversion of digital assets between different user accounts by determining an aggregated conversion rate based on exchange rates with fiat currency, using APIs to retrieve exchange rates, and executing conversions in real-time, while managing rate-specific thresholds and limits to control economic dynamics.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Adaptability or versatility
If digital asset exchange systems only support conversion to fiat currency or select few digital assets, then system complexity is reduced, but adaptability and versatility are limited
Solution Approach 1:
The patent uses fiat currency as an intermediary medium to enable conversion between any two digital assets. The system converts source digital assets to fiat currency first, then uses the fiat currency to acquire target digital assets, thereby achieving versatile digital asset exchange without directly connecting all possible asset pairs, which reduces system complexity while maintaining high adaptability
2Productivity
If real-time conversion processing is implemented, then productivity and user experience are improved, but use of energy and processing resources increases
Solution Approach 1:
The system performs preliminary actions by pre-calculating and caching conversion rates, maintaining rate-specific thresholds and limits, and preparing conversion pathways before user requests. This allows real-time conversion processing to be achieved by executing pre-prepared conversion logic rather than calculating everything from scratch, reducing real-time processing resource consumption while maintaining high productivity
3Loss of information
If aggregated conversion rates are calculated and presented, then information presentation is optimized for users, but computational complexity and processing time increase
Solution Approach 1:
The patent merges multiple conversion rate data points, rate-specific thresholds, and limit parameters into a single aggregated conversion rate that is presented to users. By combining these separate elements into one comprehensive rate, the system optimizes information presentation for users while reducing the computational overhead of presenting multiple separate parameters, thereby reducing processing time
Data Source
AI summary
Various embodiments are directed to processing conversions of digital assets to other digital assets. An example method includes determining a source exchange rate for a source digital asset and a fiat currency, determining a target exchange rate for a target digital asset and a fiat currency, and generating an aggregated conversion rate for the source digital asset and the target digital asset using the source exchange rate and the target exchange rate. The method further includes executing a digital asset conversion, which includes causing source digital asset units to be debited from a source digital asset user account and causing target digital asset units to be credited to a target digital asset user account, and subsequently executing fiat currency transactions (e.g., settlements) with a first digital asset exchange system associated with the source digital asset and a second digital asset exchange system associated with the target digital asset.