Token Transfer Validation via Mint Traceability on Blockchain
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Solution Overview
Problem
Existing blockchain-based digital cash systems face challenges in efficiently validating and transferring tokens, particularly in tracing transactions back to issuance transactions for validation.
Innovation Solution
A computer-implemented method for validating token transfer transactions involves obtaining and verifying a candidate token transfer transaction by tracing it back to a token mint transaction through a list of transactions, ensuring the sum of token amounts is consistent, and sending a list of transactions to a second party for validation.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Ease of operation
If existing token standards (ERC20, ERC721, ERC1155) are used, then token issuance and management are simplified, but control over token supply and distribution is lost
Solution Approach 1:
The patent introduces a smart contract as an intermediary layer between the token standard and the blockchain network. This smart contract implements custom token logic that allows the issuer to maintain control over supply and distribution while still utilizing the underlying token standard for basic operations. The smart contract acts as a mediator that reconciles the conflicting requirements of ease of operation and supply control.
2Adaptability or versatility
If custom token logic is implemented without standardized interfaces, then control and flexibility are improved, but integration with existing blockchain infrastructure becomes difficult
Solution Approach 1:
The patent segments the token system into multiple layers: a standardized interface layer that interacts with existing blockchain infrastructure, and a custom logic layer implemented through smart contracts that provides flexibility and control. This segmentation allows each layer to operate independently, reducing integration complexity while maintaining adaptability.
Solution Approach 2:
The patent creates a universal token framework that can work with multiple existing token standards (ERC20, ERC721, ERC1155) while incorporating custom logic. The smart contract is designed to be multi-functional, supporting both standardized operations and custom token management capabilities, thereby reducing integration complexity across different blockchain environments.
3Reliability
If blockchain networks process all token transactions, then decentralization is maintained, but network congestion and high fees occur
Solution Approach 1:
The patent introduces an off-chain intermediary system that handles token transaction processing. This intermediary layer processes transactions outside the main blockchain network, reducing congestion and fees while maintaining decentralization through periodic synchronization with the blockchain. The intermediary acts as a buffer that preserves the benefits of both centralized efficiency and decentralized reliability.
Data Source
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AI summary
A computer-implemented method of validating a token transaction as part of a token protocol using a blockchain, comprising: obtaining a candidate token transaction; obtaining, for each respective input of the candidate token transaction that references a respective token transaction, a respective list of transactions tracing back to a respective token mint transaction linking the candidate token transfer transaction to the respective token mint transaction; and validating the candidate token transfer transaction by: verifying that each respective input of the candidate token transaction references a respective token mint transaction or can be traced back, using the respective list of transactions, to a respective token mint transaction; and verifying that a sum of the respective token amounts comprised by the respective outputs of the candidate transaction is equal to a sum of the respective token amounts comprised by the one or more respective outputs referenced by the candidate transaction.