Interoperability Node for Shielded DLT Token Exchange
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Solution Overview
Problem
Distributed ledger technology (DLT) systems face challenges in cohesive sharing, synchronization, and transferring of information due to unique protocols and design considerations, which inhibit interoperability between different DLT networks, especially when cryptographic hashing obscures data, making token exchanges between independent networks complex and inefficient.
Innovation Solution
The implementation of an interoperability node that facilitates private token exchanges between DLT networks using shielded exchange instructions, zero-knowledge proofs, and cryptographic hashing, allowing for secure and efficient token transfers without revealing party identities or token details, and reducing verification messages and processing times through non-interactive zero-knowledge proofs like zk-SNARKs.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If cryptographic hashing is used to obscure data in distributed ledgers, then security and privacy are improved, but interoperability and data sharing between different DLT networks deteriorate
Solution Approach 1:
The patent introduces an interoperability node as an intermediary component that bridges different DLT networks. This node contains both a furnisher smart contract interface and a receiver smart contract interface, enabling it to translate and relay transactions between networks with different protocols. The intermediary handles the cryptographic hashing and verification processes while maintaining compatibility across networks, thus preserving security through hashing while enabling interoperability through the mediating node.
2Reliability
If unique protocols are implemented in each distributed ledger, then network security and integrity are improved, but cohesive sharing and synchronization between networks deteriorate
Solution Approach 1:
The interoperability node is designed with multi-functionality to handle multiple DLT network protocols simultaneously. It contains both a furnisher smart contract interface for one network type and a receiver smart contract interface for another network type, enabling it to perform multiple functions: receiving transactions from one protocol, verifying them, and relaying them to another protocol. This universal design allows the same node structure to work across different networks while maintaining their unique security protocols.
3Reliability
If zero-knowledge proofs are used for shielded exchanges, then privacy is improved, but verification complexity and processing time deteriorate
Solution Approach 1:
The patent implements preliminary action by pre-computing and storing nullifier sets and Merkle tree structures in the interoperability node before transactions occur. The furnisher smart contract pre-generates nullifiers for tokens that will be exchanged, and the receiver smart contract pre-prepares verification structures. This preliminary preparation significantly reduces the computational burden during actual transaction verification, as the node only needs to perform simple nullifier checks against pre-computed Merkle trees rather than performing full zero-knowledge proof verification from scratch for each transaction.
Data Source
AI summary
A system may receive a request to perform a token exchange between a first account and a second account. A selected token for the token exchange may be associated with the first account. A hash of the selected token may be stored on a furnisher blockchain of a first distributed ledger. The system may generate a new token and a hash of the new token. The system may generate a shielded exchange instruction, the shielded exchange instruction comprising the hash of the new token and a zero-knowledge proof, wherein the zero-knowledge proof is indicative of the selected token being associated with the first account. The system may submit the shielded exchange instruction to a distributed ledger technology platform to cause execution of a furnisher smart contract and a receiver smart contract. Each of the smart contracts are configured to separately verify the zero-knowledge proof and update corresponding blockchains to consummate and record the token exchange.