Stable Value Token Collateral Management on Blockchain
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Solution Overview
Problem
Current blockchain technology lacks a mechanism to deposit, hold, and distribute collateral in the form of stable value digital assets for security tokens based on user-defined smart contracts on the same underlying blockchain, limiting the ability to invest and earn interest on stored digital assets.
Innovation Solution
The system and method involve generating user-defined smart contracts that manage collateral in the form of stable value tokens, allowing for the recalculation and distribution of collateral amounts based on benchmark information and collateral requirements, enabling the implementation of trade instructions and dispute resolution mechanisms within the blockchain network.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If digital assets are stored on the blockchain for security and independence, then security and independence are improved, but the assets remain idle and cannot earn interest
Solution Approach 1:
The system segments digital assets into two functional categories: stable value tokens for collateral (earning interest) and volatile digital assets for security/independence. This segmentation allows each type to fulfill its primary function while resolving the contradiction between security and productivity.
Solution Approach 2:
Stable value tokens act as an intermediary between volatile digital assets and the blockchain system. They enable interest-earning collateral functionality while the volatile assets maintain security and independence, thus resolving the contradiction through a mediating mechanism.
2Productivity
If stable value tokens are used as collateral for security tokens, then investment and interest earning are enabled, but system complexity increases
Solution Approach 1:
The smart contract system provides universal functionality by integrating multiple operations (collateral management, interest calculation, distribution, and dispute resolution) into a single automated framework. This multi-functionality reduces the need for separate systems, thereby managing complexity while enabling investment capabilities.
Solution Approach 2:
The system implements self-service through automated smart contracts that recalculate collateral amounts, distribute interest, and resolve disputes without manual intervention. This automation reduces operational complexity while enhancing investment functionality.
3Adaptability or versatility
If user-defined smart contracts manage collateral recalculation and distribution, then adaptability is improved, but difficulty of detecting and measuring increases
Solution Approach 1:
The smart contract system implements continuous feedback mechanisms that automatically monitor collateral amounts, recalculate requirements based on benchmark information, and trigger distributions when thresholds are met. This automated feedback loop simplifies monitoring while maintaining high adaptability.
Solution Approach 2:
The system performs preliminary actions by pre-defining collateral requirements, benchmark information sources, and distribution rules in the smart contract. This preliminary configuration enables flexible adaptation while reducing the complexity of real-time detection and measurement.
Data Source
AI summary
The present invention generally relates to a method, system and program product for depositing, holding and/or distributing collateral in the form of digital assets in a peer-to-peer network.