NFT Title Insurance System with Dynamic Confidence Assessment
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Solution Overview
Problem
The challenge in establishing transparent and consistent ownership and enforcing terms of use for non-fungible tokens (NFTs) on blockchain networks, due to complexities in blockchain technology and internet connectivity, leads to difficulties in policing NFT licenses and preventing misappropriation, which is not well-understood in digital asset markets.
Innovation Solution
A system for titles and title insurance for NFTs that includes an ingestion component to receive NFTs, a search component to conduct title searches, a title confidence component to determine dynamic title confidence, and a title insurance component to calculate premiums based on this confidence, which can be re-evaluated as the confidence changes.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Measurement precision
If dynamic title confidence assessment is implemented, then title insurance precision is improved, but system complexity increases
Solution Approach 1:
The system segments the title confidence assessment into distinct functional components: an ingestion component that receives NFT data, a search component that queries title information, and a title confidence component that calculates confidence scores. This segmentation allows each component to specialize in specific tasks, improving measurement precision while managing system complexity through modular design.
Solution Approach 2:
The system implements dynamic title confidence assessment that continuously updates confidence scores as new information becomes available. The title confidence component recalculates confidence levels based on changing search results and title data, enabling adaptive precision measurement without requiring complete system redesign, thus managing complexity while maintaining high measurement accuracy.
2Reliability
If continuous premium redetermination is performed, then insurance reliability is improved, but computational resources are consumed
Solution Approach 1:
The system performs premium redetermination periodically based on changes in title confidence rather than continuously. The title insurance component monitors title confidence levels and triggers premium recalculation only when confidence changes occur, ensuring insurance reliability through regular updates while conserving computational resources by avoiding unnecessary continuous calculations.
Solution Approach 2:
The system implements a feedback mechanism where premium amounts are redetermined based on feedback from title confidence assessments. When the title confidence component detects changes in title confidence levels, it triggers a premium redetermination process that adjusts insurance premiums accordingly, ensuring reliability through responsive updates while optimizing resource usage through event-driven rather than continuous processing.
Data Source
AI summary
A non-fungible token (NFT) representing title to property may be received. A search of the title to the property may be conducted. A title confidence may be determined based on the search of the title to the property. A premium may be determined based on the title confidence. The premium may be redetermined based on changes to the title confidence.