Secret Key Matching Engine for Anonymous Cross Trades
Find Innovative SolutionsGenerate Solutions
Solution Overview
Problem
Institutions face challenges in trading securities without disclosing information to middlemen, as existing systems do not allow for simultaneous matching of buyers and sellers across multiple times, leading to potential information leakage and reduced profits.
Innovation Solution
The Secret Key-Based Counterparty Matching Engine (SKCME) generates a secret key to initialize a random number generator, creating a list of scheduled execution times and locations, enabling institutions to match anonymously at multiple times without disclosing information, facilitating cross trades through designated venues.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Loss of information
If existing trading systems are used to match buyers and sellers, then trading can be facilitated, but information leakage to middlemen occurs and profits are reduced
Solution Approach 1:
The patent introduces a cryptographic hash function as an intermediary mechanism that enables matching between buyers and sellers without revealing their identity information. The hash function processes order data to generate unique identifiers that can be matched across multiple venues while preserving anonymity, thus eliminating information leakage to middlemen while maintaining trading efficiency.
Solution Approach 2:
The system creates cryptographic copies (hash values) of the original order information that can be used for matching purposes without exposing the sensitive underlying data. These hash copies serve as surrogate keys that enable counterparty identification and matching while preventing direct access to the actual order details, thereby reducing information leakage.
2Loss of information
If anonymous matching is implemented across multiple times, then information leakage is minimized and profits increase, but system complexity increases
Solution Approach 1:
The system employs self-service mechanisms where the cryptographic hash function automatically performs the anonymization and matching operations without requiring complex external verification systems. Each order inherently carries its own cryptographic fingerprint that enables automatic matching across multiple time periods, reducing the need for additional complexity in the matching infrastructure.
Solution Approach 2:
The patent transforms the order data by applying cryptographic hash functions that change the parameter representation from raw sensitive information to anonymized hash values. This parameter transformation enables multi-time anonymous matching while keeping the system relatively simple, as the same hash function can be applied consistently across different time periods without requiring complex state management.
3Productivity
If traditional matching systems are used, then matching can occur at single points in time, but middlemen are required and information leakage increases
Solution Approach 1:
The system implements periodic matching actions across multiple time periods using the same cryptographic hash function. Instead of single-point-in-time matching, the hash-based identifiers remain valid across multiple trading periods, enabling continuous anonymous matching without requiring middlemen. This periodic action maintains trading efficiency while eliminating information leakage associated with traditional single-time matching systems.
Data Source
AI summary
The Secret Key-Based Counterparty Matching Engine Apparatuses, Methods and Systems (“SKCME”) transforms client key message, order placement input inputs via SKCME components into order placement output outputs. A matched key is determined and used to generate a set of cross times and a set of cross venues for a security identifier. Orders associated with the security identifier are obtained from counterparties and are assigned a scheduled cross time from the generated set of cross times and a scheduled cross venue from the generated set of cross venues. The orders are sent for execution at the scheduled cross venue at the scheduled cross time.