Smart Contract Authorization for Locked Cryptocurrency Transactions
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Solution Overview
Problem
Consumers are limited in using pooled cryptocurrency for transactions due to the currency being locked in liquidity pools, requiring them to wait for unlocking or undergo cumbersome borrowing processes, which is inconvenient and risky.
Innovation Solution
A system that enables real-time authorization of transactions using pooled equity by generating a smart contract on a blockchain, allowing a liquidity provider to transfer locked cryptocurrency on behalf of the consumer, ensuring immediate transaction execution.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Productivity
If cryptocurrency is locked in a liquidity pool, then trading liquidity is improved, but transaction usability deteriorates
Solution Approach 1:
The patent introduces a smart contract as an intermediary between the locked cryptocurrency and the transaction system. The smart contract acts as a mediator that can release funds temporarily for transactions while maintaining the locked status in the liquidity pool, thus enabling both trading liquidity and transaction usability simultaneously
Solution Approach 2:
The patent segments the cryptocurrency into two functional parts: one portion remains locked in the liquidity pool to maintain trading liquidity, while another portion is temporarily unlocked through smart contract mechanisms to enable transactions. This segmentation allows both requirements to be satisfied concurrently
2Reliability
If consumer waits for equity to unlock, then transaction safety is improved, but transaction speed deteriorates
Solution Approach 1:
The patent implements preliminary action by having the smart contract pre-authorized to release funds when specific conditions are met. Instead of waiting for natural unlocking, the system prepares the transaction pathway in advance with conditional logic that automatically executes when the consumer needs to transact, thus maintaining safety while enabling immediate transaction speed
Solution Approach 2:
The patent introduces dynamic fund management where the locked status of cryptocurrency can temporarily change based on transaction needs. The smart contract dynamically adjusts the locked/unlocked state of funds in real-time based on consumer requests and liquidity pool conditions, allowing fast transactions while maintaining overall pool integrity
3Adaptability or versatility
If consumer manually borrows unlocked currency, then transaction availability is improved, but process complexity deteriorates
Solution Approach 1:
The patent implements self-service by enabling consumers to directly initiate transactions using their locked equity through a simplified interface. The smart contract automatically handles the complex borrowing and repayment logistics without requiring the consumer to manually navigate lending platforms or coordinate with multiple parties, thus maintaining transaction availability while reducing process complexity to a simple user action
Data Source
AI summary
A method for enabling real-time authorization of a transaction with pooled equity includes: receiving a transaction request message, the transaction request message including at least a public key of a cryptographic key pair and a transacting currency amount; verifying a balance of a cryptographic currency for a first blockchain wallet associated with the cryptographic key pair on a blockchain using at least the public key, where at least a portion of the balance is locked in a currency pool; generating a smart contract, the smart contract configured to initiate a first blockchain transaction on the blockchain for transfer of the transacting currency amount from a second blockchain wallet to a destination address, where the second blockchain wallet is different from the first blockchain wallet; and transmitting the generated smart contract to a node in a blockchain network associated with the blockchain for publishing to the blockchain.