Tokenized Commodity Multipart Transactions via Distributed Ledger
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Solution Overview
Problem
Existing systems for validating and storing multipart transactions involving multiple parties are inefficient in providing end-to-end validation and verification, particularly in transactions like Murabaha, where interest-based loans are prohibited, requiring a technology platform that ensures secure and compliant transfer of commodities.
Innovation Solution
A blockchain network with smart contracts and distributed ledger technology is used to validate, tokenize, and record sub-transactions, ensuring immutable and secure proof of commodity transfers between parties, compliant with Sharia law by replacing interest with profit margins, and using commodity tokens for transparent ownership verification.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If diverse systems are used by each party for storing and accessing sub-transaction data, then each party can maintain their own data management, but end-to-end validation and verification of sub-transactions cannot be achieved
Solution Approach 1:
The patent merges multiple disparate data storage and validation systems into a single unified blockchain network. All parties (customer, bank, brokers) interact with the same distributed ledger, eliminating the need for separate systems while achieving end-to-end validation of sub-transactions through smart contracts that automatically verify compliance with the agreement terms.
Solution Approach 2:
The blockchain network serves multiple functions simultaneously: it stores transaction data, validates sub-transactions, verifies compliance with agreement terms, prevents double-spending, and provides an immutable audit trail. This universal platform replaces multiple specialized systems with a single multi-functional solution.
2Productivity
If interest-based loans are used in Murabaha transactions, then financial institutions can provide funding, but compliance with Sharia law is violated
Solution Approach 1:
The patent introduces a commodity as an intermediary in the transaction. Instead of directly lending money with interest (which violates Sharia law), the bank sells a commodity to the customer at a markup price that includes the profit margin. The commodity transfer serves as the mediator that transforms an interest-based loan into a Sharia-compliant trade finance transaction.
Solution Approach 2:
The patent changes the fundamental parameter of the transaction from an interest-based monetary loan to a commodity sale with profit margin. By altering the transaction structure from finance to trade, the system maintains productivity (funding provision) while achieving Sharia compliance through parameter transformation.
3Productivity
If a centralized system is used for validating sub-transactions, then validation can be performed efficiently, but security and trust among multiple parties are compromised
Solution Approach 1:
The patent segments the validation function across multiple independent nodes in a peer-to-peer network. Each node runs smart contracts to validate sub-transactions autonomously, eliminating the need for a single centralized validator. This segmentation maintains validation efficiency through parallel processing while enhancing security through distributed consensus.
Solution Approach 2:
The blockchain system implements continuous feedback through the consensus mechanism. Each node validates transactions and provides feedback to the network, and the immutable ledger provides ongoing feedback on transaction history. This feedback loop ensures both efficient validation and high security through collective verification by all network participants.
Data Source
AI summary
Computer-readable media, systems and methods may improve an ability to validate a multipart transaction involving multiple parties and sub-transactions and securely store and access multipart transaction data through a peer-to-peer computer network and a distributed ledger. A multipart transaction, such as a Murabaha transaction, may refer to a transaction having multiple parts involving multiple parties in connection with an agreement between two or more of the parties in which a commodity sale or other vehicle is created based on the agreement. The commodity may be tokenized for transfer in the multipart transaction. Validation of digitally signed data relating to the sub-transactions may provide secure authentication of the sub-transactions and atomic transfers of the tokenized commodity between relevant parties of sub-transactions in connection with the agreement. Storage of the validated sub-transactions and transfers on the distributed ledger may provide secure, immutable, and transparent proof of the validated sub-transactions and transfers.