Nested Smart Contract Wallets for Programmable CBDC Transactions
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Solution Overview
Problem
Existing Central Bank Digital Currency (CBDC) wallets have user experience issues related to accessibility and lack of infrastructure, and they fail to leverage the programmability feature of digital currencies.
Innovation Solution
The implementation of methods and systems for managing programmable currency-based transactions through nested smart contract-based wallets, which allows for the creation of new sub-wallets or depositing funds into preexisting sub-wallets based on transaction categories defined by smart contracts.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If traditional CBDC wallets are implemented with public key and private key infrastructure, then security is improved, but user accessibility and ease of operation deteriorate
Solution Approach 1:
The patent introduces a smart contract wallet as an intermediary between the user and the blockchain system. Instead of requiring users to directly manage private keys, the smart contract wallet handles security operations through predefined rules and conditions. This mediator layer maintains security through cryptographic operations while presenting a simplified interface to users, thus resolving the contradiction between security and ease of operation.
Solution Approach 2:
The smart contract wallet enables self-service functionality by automatically executing transactions based on predefined conditions without requiring manual private key management. The system serves itself by autonomously handling authentication, authorization, and transaction execution according to encoded rules, eliminating the need for users to understand complex cryptographic operations while maintaining security.
2Ease of operation
If CBDC wallets are implemented as simple storage accounts, then ease of operation is improved, but programmability and functionality deteriorate
Solution Approach 1:
The smart contract wallet is designed as a universal platform that can perform multiple functions beyond simple fund storage. It can execute complex transactions, enforce spending conditions, implement time-based controls, and integrate with various external systems. This multi-functional design maintains operational simplicity for users while providing extensive programmability and adaptability for different use cases.
Solution Approach 2:
The patent implements a nested wallet structure where sub-wallets can be created within parent wallets, each with specific programmable conditions. This nested architecture allows complex programmable functionality to be organized in manageable layers, maintaining simplicity at the user interface level while enabling sophisticated programmability through the nested smart contract structure.
3Adaptability or versatility
If digital currency transactions are made programmable with smart contracts, then functionality and control are improved, but system complexity deteriorates
Solution Approach 1:
The patent segments the wallet system into distinct modular components: external wallets, smart contract wallets, and sub-wallets. Each segment has specific responsibilities and can be independently configured. This segmentation reduces overall system complexity by breaking down the complex programmable wallet functionality into manageable, interchangeable modules that can be deployed and managed separately.
Solution Approach 2:
The system manages complexity by allowing configuration through parameter changes rather than requiring fundamental system redesign. Smart contracts can be deployed with different parameters and conditions based on specific use cases, enabling programmability without hardcoding complex logic. This parameter-driven approach allows the system to adapt to different requirements while maintaining a consistent underlying architecture.
4Reliability
If transaction monitoring and categorization are implemented, then transaction control and security are improved, but processing time and operational complexity deteriorate
Solution Approach 1:
The patent implements preliminary action by encoding transaction conditions, categories, and controls directly into the smart contract wallet during deployment. Rather than monitoring and analyzing transactions after they occur, the system pre-configures rules that automatically enforce transaction control. This upfront configuration eliminates the need for time-consuming post-transaction analysis while maintaining strong control and security.
Solution Approach 2:
The smart contract wallet performs self-service transaction monitoring and categorization by automatically evaluating incoming transactions against predefined conditions. The system serves itself by autonomously determining whether transactions comply with encoded rules without requiring external monitoring or manual categorization. This self-executing approach maintains strong transaction control while minimizing processing time delays.
Data Source
AI summary
Methods and systems for managing programmable currency-based transactions through nested smart contract-based wallets are disclosed. Method performed by a server system includes receiving fund transfer of a digital currency associated with a smart contract including a set of predefined instructions from a first wallet to a second wallet. Method includes determining a transaction category of the digital currency based on the set of predefined instructions. Transaction category indicates purpose of the fund transfer as per the smart contract. Method includes generating and depositing the digital currency to new sub-wallet(s) associated with the second wallet based on the transaction category of the digital currency. Each of the new sub-wallet(s) is eligible to hold the digital currency for a specific transaction category. Alternatively, the method includes depositing the digital currency to preexisting sub-wallet(s). Each of the preexisting sub-wallet(s) is eligible to hold the digital currency for the specific transaction category.