Tokenized Deposit System with Smart Contract Control
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Solution Overview
Problem
Existing asset exchange systems lack awareness of where assets are transmitted and how they are used, leading to a lack of control for asset depositors over the usage and transmission of their digital assets.
Innovation Solution
A system that uses tokenization to restrict digital assets, allowing depositors to dictate usage and transmission through smart contracts and private keys, while also enabling fast and real-time transfer of tokenized funds.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Ease of operation
If traditional asset exchange systems are used, then asset transmission occurs, but depositors lack control over usage and transmission of their digital assets
Solution Approach 1:
The patent segments digital assets into tokenized units with distinct metadata objects that encode specific usage conditions and restrictions. Each token carries embedded rules that segment control authority between the depositor (who sets conditions) and the financial institution (which must comply), thereby enabling depositor control while maintaining reliable asset usage restrictions.
Solution Approach 2:
The patent introduces smart contracts as intermediary mechanisms that automatically enforce depositor-defined conditions on asset usage. These smart contracts act as mediators between depositors and financial institutions, ensuring that assets are only transmitted or used according to predetermined rules, thus providing both depositor control and reliable enforcement.
2Ease of operation
If tokenization is implemented to restrict digital assets, then depositor control is enhanced, but system complexity increases
Solution Approach 1:
The patent creates a universal smart contract framework that handles multiple asset types and condition scenarios through standardized tokenization mechanisms. This multi-functional approach allows the same core system to manage diverse asset restrictions (geographic, temporal, purpose-based) without requiring separate complex systems for each case, thereby enhancing depositor control while limiting complexity growth.
Solution Approach 2:
The patent manages complexity by dynamically changing parameters within the token metadata rather than creating structurally different systems for different asset restrictions. By encoding various conditions (geography, time, purpose) as adjustable parameters within a unified token structure, the system achieves flexible depositor control without proportionally increasing system complexity.
3Loss of information
If smart contracts are used to enforce asset restrictions, then asset awareness is enhanced, but transaction speed may be reduced
Solution Approach 1:
The patent addresses the speed-accuracy tradeoff by performing preliminary actions during token creation: all usage conditions, restrictions, and metadata are predetermined and encoded into the token structure before transmission. This allows the smart contract to simply verify pre-established conditions rather than making complex decisions during transfer, thereby enhancing asset awareness through comprehensive metadata while minimizing impact on transaction speed.
Data Source
AI summary
Some arrangements relate to a system comprising a memory and one or more processors configured to receive from a first computing system of a depositor over a network, a deposit request corresponding to a first funds. In response to receiving a deposit request, first tokens are generated by tokenizing the first funds. To generate first tokens, a private key is used to create the first tokens, a public key of depositor is used to associate the depositor to the first tokens. The depositor is identified by the public and the first tokens are minted using the private key by executing one or more smart contracts.