Stable Value Digital Asset Token Supply Modification
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Solution Overview
Problem
Current blockchain technology lacks adequate solutions for modifying the supply of stable value digital asset tokens, which are tied to underlying blockchain technology and face challenges in managing and regulating their issuance and circulation effectively.
Innovation Solution
A system and method for modifying the supply of stable value digital asset tokens using smart contracts on a blockchain, where tokens like SVCoin are pegged to fiat currencies, allowing for controlled issuance, redemption, and management by trusted entities like digital asset exchanges or banks, utilizing key pairs and smart contract instructions to manage token creation, delegation, and storage on the blockchain.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If blockchain technology is used to issue and manage digital asset tokens, then transparency and decentralization are improved, but the ability to modify token supply effectively is worsened
Solution Approach 1:
The patent introduces a smart contract as an intermediary between the decentralized blockchain and the token issuance process. The smart contract holds and manages the private key that controls token generation, acting as a mediator that enables supply modification while maintaining blockchain transparency. This resolves the contradiction by allowing centralized control mechanisms to operate within a decentralized framework.
Solution Approach 2:
The patent segments the token management system into multiple components: the blockchain network for transparency and immutability, the smart contract for controlled supply modification, and the private key management system for security. This segmentation allows each component to fulfill its specific function, resolving the contradiction between decentralization and supply flexibility.
2Stability of the object's composition
If stable value digital asset tokens are pegged to fiat currencies, then value stability is improved, but the complexity of managing issuance and redemption is worsened
Solution Approach 1:
The patent implements automated smart contracts that handle the complex processes of token issuance and redemption automatically. When fiat currency is deposited or withdrawn, the smart contract autonomously performs the corresponding token operations without manual intervention. This self-service mechanism maintains value stability while reducing management complexity by eliminating manual processes.
Solution Approach 2:
The patent establishes predetermined rules and automated processes within the smart contract for token issuance and redemption before they are needed. The system is pre-configured with the pegged value ratio and automated redemption logic, so when transactions occur, the complex management actions are already prepared and execute automatically, reducing operational complexity.
3Ease of operation
If trusted entities manage token issuance and redemption, then control and regulation are improved, but the risk of centralized points of failure is worsened
Solution Approach 1:
The smart contract acts as a trusted intermediary that holds the private key and controls token issuance and redemption. Instead of direct centralized control by an entity, the smart contract mediates all transactions according to predetermined rules. This maintains ease of operation through centralized control while reducing failure risk by removing single points of human intervention and error.
Solution Approach 2:
The patent replaces manual, mechanical control processes with automated cryptographic and smart contract mechanisms. The private key management and token issuance operations are performed automatically by the smart contract based on predetermined logic, eliminating human error and centralized failure points while maintaining control capability.
Data Source
AI summary
The present invention generally relates to a method, system and program product for modifying a supply of stable value digital asset tokens tied to a blockchain.