Distributed Ledger Asset Backing for Stable Token Exchange
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Solution Overview
Problem
Digital ledger systems and cryptocurrencies lack a concrete link to real-world tangible items or value, leading to uncertainty in resource allocation and exchange, and fail to ensure compliance with regulatory requirements such as KYC and AML.
Innovation Solution
A computerized distributed ledger system that supports a first resource type, such as tokens, which are exchangeable on demand for a second resource type like tangible computing resources or currency, with asset backing and smart contracts ensuring fixed value and compliance with regulatory requirements.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Speed
If digital ledger systems use tokens without concrete asset backing, then transaction speed and flexibility are improved, but reliability and user confidence deteriorate due to lack of tangible value link
Solution Approach 1:
The patent introduces asset backing as an intermediary mechanism that bridges digital tokens and tangible value. The system maintains reserves of tangible assets (computing resources, currency, or other valuable items) that can be exchanged for tokens at a fixed rate, providing a mediator that ensures token value stability while preserving the speed benefits of digital transactions.
Solution Approach 2:
The patent establishes a fixed exchange rate parameter between tokens and backed assets, transforming the variable value perception into a stable, predictable relationship. This parameter change from flexible market pricing to fixed exchange rate provides users with confidence in token value while maintaining rapid digital transaction capabilities.
2Ease of operation
If digital ledger systems operate without regulatory compliance mechanisms, then system simplicity and ease of operation are improved, but harmful factors increase due to lack of KYC and AML compliance
Solution Approach 1:
The patent implements preliminary compliance actions by requiring identity verification and regulatory checks before token issuance and transaction processing. The system performs KYC and AML screening in advance, preventing harmful activities before they occur while maintaining streamlined operational procedures for authorized users.
Solution Approach 2:
The patent introduces compliance verification as an intermediary layer between users and the core digital ledger operations. This mediator ensures regulatory requirements are met without complicating the fundamental transaction mechanism, allowing simple operations for compliant users while blocking non-compliant activities.
3Device complexity
If digital ledger systems lack asset backing mechanisms, then device complexity is reduced, but loss of information occurs due to inability to verify real-world value equivalence
Solution Approach 1:
The patent creates a digital copy or representation of tangible assets through tokenization, where each token represents a specific quantity of backed assets. This copying mechanism preserves value verification capabilities by maintaining a digital record that can be audited and verified, preventing information loss about real-world value equivalence.
Solution Approach 2:
The patent introduces asset backing verification as an intermediary mechanism that connects digital tokens to tangible value. This mediator provides the necessary information link between digital and physical realms, ensuring that token holders can verify the real-world value equivalence without significantly complicating the overall system architecture.
Data Source
AI summary
Methods and systems of maintaining a digital ledger are provided in which a first resource, such as a cryptocurrency or other value-bearing resource, is backed by a second resource, such as a fiat currency or other government-issued resource, and exchangeable for the second resource at a set per-unit value. After setting a per-unit value of the first resource, interface nodes are used to maintain pools of the resources within set thresholds such that one resource can be exchanged for another at any time.