Dynamic Token Instrument Using Nested Security Layers

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Solution Overview

Problem

Existing digital asset protection systems lack effective security measures to prevent unauthorized access and manipulation of digital assets, particularly in computer networked environments like the internet.

Innovation Solution

A system utilizing dynamic non-fungible token (DNFT) exchange instruments, which includes a data processing system that generates and manages DNFTs encapsulated within a control structure that updates internal states based on off-chain data. This system restricts output, transmits digital DNFTs, and continuously monitors assets to detect and update internal states in real-time.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Adaptability or versatility

If digital assets are stored and exchanged in networked environments, then accessibility and exchangeability are improved, but security vulnerabilities and unauthorized access risks increase

Engineering Contradiction:

ImproveexchangeabilityVSAvoidunauthorized access

Core Design Contradiction:

Adaptability or versatilityVSObject-affected harmful factors

Solution Approach 1:

The patent implements nested security layers where NFTs are encapsulated within smart contracts, which are further protected by private keys and stored in secure enclaves. This multi-layered nesting structure allows the asset to remain accessible for exchange while protecting it from unauthorized access at each security layer.

Inventive Principle:

Principle #7Nested doll (Nesting)

Solution Approach 2:

The patent introduces multiple intermediaries including smart contracts that mediate between the NFT and exchange platforms, and secure enclaves that act as intermediaries between private keys and the blockchain network. These intermediaries enable exchange functionality while blocking direct unauthorized access to the underlying assets.

Inventive Principle:

Principle #24Intermediary (Mediator)

2Productivity

If digital assets are made accessible for exchange, then liquidity and transaction speed are improved, but exposure to manipulation and security threats increases

Engineering Contradiction:

Improvetransaction speedVSAvoidmanipulation risk

Core Design Contradiction:

ProductivityVSObject-generated harmful factors

Solution Approach 1:

The patent performs preliminary security actions by encapsulating NFTs in smart contracts with built-in security rules and validation logic before they are exposed to exchange platforms. This preliminary protection allows rapid exchange transactions to proceed while pre-established security measures prevent manipulation attempts.

Inventive Principle:

Principle #10Preliminary action

Solution Approach 2:

The patent implements feedback mechanisms where smart contracts continuously monitor transaction conditions and automatically enforce security rules. The system provides feedback by validating each exchange transaction against predetermined criteria, allowing legitimate transactions to proceed at high speed while blocking manipulative actions.

Inventive Principle:

Principle #23Feedback

3Reliability

If security measures are strengthened to protect digital assets, then security and privacy are improved, but system complexity and operational difficulty increase

Engineering Contradiction:

ImprovesecurityVSAvoidsystem complexity

Core Design Contradiction:

ReliabilityVSDevice complexity

Solution Approach 1:

The patent employs universal smart contract templates that provide multiple security functions (authentication, authorization, transaction validation, and monitoring) within a single standardized structure. This multi-functionality reduces system complexity by eliminating the need for separate security components while maintaining comprehensive protection.

Inventive Principle:

Principle #6Universality (Multi-functionality)

Solution Approach 2:

The patent implements self-service security where smart contracts automatically enforce security rules and validate transactions without requiring external intervention. The system performs self-auditing and automatic rejection of invalid transactions, reducing operational complexity while maintaining high security standards.

Inventive Principle:

Principle #25Self-service

4Reliability

If real-time monitoring and continuous updates are implemented, then asset protection and detection capability are improved, but computational resources and processing time increase

Engineering Contradiction:

Improveasset protectionVSAvoidcomputational resources

Core Design Contradiction:

ReliabilityVSUse of energy by moving object

Solution Approach 1:

The patent implements periodic monitoring where smart contracts check asset conditions and update states at predetermined intervals or upon triggering specific events, rather than continuous monitoring. This periodic approach maintains reliable asset protection while significantly reducing computational resource consumption compared to constant monitoring.

Inventive Principle:

Principle #19Periodic action

Solution Approach 2:

The patent applies monitoring and updates selectively to only those aspects of the asset that require protection or have changed, rather than continuously monitoring and updating all asset properties. This partial action approach provides sufficient asset protection while minimizing unnecessary computational overhead.

Inventive Principle:

Principle #16Partial or excessive action

Data Source

PatentUS12321924B1Dynamic token instrument using a protection architecture

Publication Date: 2025.06.03 WELLS FARGO BANK NA

AI summary

Systems, methods, and computer-readable storage media to exchange using dynamic non-fungible token (DNFT) exchange instruments. One method includes receiving an issuance request, generating a DNFT exchange instrument, dynamically updating the DNFT exchange instrument, and executing an exchange.