Digital Fund Token Creation via Distributed Ledger Escrow
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Solution Overview
Problem
Existing trading systems struggle to efficiently create and redeem multiple security assets such as ETFs and mutual funds using cryptographic techniques, particularly due to issues with market data storage, ownership data management, and incompatibility with crypto currency trading protocols, leading to liquidity problems and inefficiencies.
Innovation Solution
A Crypto Fund Creation and Redemption Platform utilizing a distributed ledger to create and redeem digital fund tokens, which are electronically signed and recorded on a blockchain, allowing for direct or indirect creation and redemption of fund shares using escrow accounts and cryptographic signatures.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Productivity
If existing trading systems are used to create and redeem multiple security assets, then traditional trading processes can be maintained, but liquidity problems and inefficiencies occur due to incompatibility with crypto currency trading protocols
Solution Approach 1:
The patent introduces a distributed ledger as an intermediary layer between traditional trading systems and crypto currency protocols. This mediator enables seamless creation and redemption of multiple security assets by translating between different trading protocols while maintaining liquidity and efficiency on both sides of the system.
Solution Approach 2:
The trading system is designed with multi-functionality to handle both traditional security asset trading and crypto currency trading through a unified platform. The system can create and redeem various types of security assets (ETFs, mutual funds, index funds) while simultaneously supporting crypto currency transactions, eliminating the need for separate systems and improving overall productivity.
2Reliability
If market data and ownership data are stored in separate systems, then data security can be maintained, but incompatibility and inefficiency occur in trading operations
Solution Approach 1:
The patent merges market data storage and ownership data storage into a unified distributed ledger system. This combination maintains data security through cryptographic principles while enabling seamless trading operations by having both data types readily accessible and synchronized within the same system architecture.
Solution Approach 2:
The distributed ledger acts as an intermediary data structure that reconciles market data and ownership data. It provides a unified interface for trading operations while maintaining the security properties of separate storage through cryptographic hashing and distributed consensus mechanisms.
3Device complexity
If traditional trading protocols are used for crypto currency trading, then existing infrastructure can be utilized, but liquidity problems and inefficiencies arise
Solution Approach 1:
The trading system implements dynamic protocol selection and adaptation. It can automatically switch between traditional trading protocols and crypto currency-specific protocols based on the asset type and trading conditions, optimizing productivity while efficiently utilizing existing infrastructure through dynamic configuration rather than static architecture.
Data Source
AI summary
An asset trading system utilizing a distributed ledger and configured to: when a creation request to create a digital fund token representing at least one share of a fund having a plurality of different assets (i) is received, (ii) is electronically signed with a private key associated with a first addressed account, and (iii) indicates a composition of the at least one share of the fund: place the plurality of different assets represented by the at least one share of the fund into an escrow account; create the digital fund token, wherein the digital fund token indicates the composition of the share of the fund; and record the creation of the digital fund token on a distributed ledger.