Granted Patent B1

US 11,139,955 · App. 16/280,788 · Granted Oct 5, 2021

Inventors: Michael So (Tenafly, NJ); Ira Auerbach (Arverne, NY); Daniel William Halley James (Brooklyn, NY); Cameron Howard Winklevoss (New York, NY); Tyler Howard Winklevoss (New York, NY); Anas Saidi (Brooklyn, NY); Jamie Chapman (New York, NY)

Assignee: Winklevoss IP, LLC

H04L9/0637G06F21/64G06Q20/065G06Q20/401G06Q40/04H04L9/3213H04L2209/38H04L2209/56

Abstract

Claims (125)

1. A method comprising:

(a) publishing, by an administrator system associated with an administrator of a security token smart contract, a contract proposal,

wherein the contract proposal includes:

(i) first user information associated with a first user device that is associated with a first user; and

(ii) first contract information comprising at least the following contract parameters:

(A) an inception date;

(B) an inception value;

(C) at least one benchmark;

(D) a contract duration;

(E) at least one collateral requirement;

(F) a notional value of the smart contract; and

(G) first side information comprising identification of a first leg of the contract;

(b) receiving, by the administrator system at least one indication of interest, wherein the at least one indication of interest includes at least:

(1) a first user response, from a second user device associated with a second user, the first user response comprising:

(1) second user information associated with the second user; and

(2) second side information comprising identification of a second leg of the contract;

(c) matching, by the administrator system, the first contract information and the first user response;

(d) providing a stable value token smart contract associated with a stable value token and first smart contract instructions associated with a first smart contract address associated with a blockchain of an underlying digital asset,

wherein the first contract instructions are saved in the blockchain for the underlying digital asset and include:

(1) first authorization instructions regarding creating stable value tokens;

(2) second authorization instructions regarding transferring stable value tokens;

(3) third authorization instructions regarding destroying stable value tokens; and

(4) fourth authorization instructions regarding functions associated with the stable value token;

(e) providing the security token smart contract associated with the security token and second smart contract instructions associated with a second smart contract address associated with the blockchain for the underlying digital asset,

wherein the second smart contract instructions are saved in the blockchain for the underlying digital asset and include:

(1) fifth authorization instructions regarding creating security tokens;

(2) sixth authorization instructions regarding transferring security tokens;

(3) seventh authorization instructions regarding destroying security tokens;

(4) eighth authorization instructions regarding transferring stable value tokens from the second contract address; and

(5) calculating instructions regarding calculating excess collateral;

(f) receiving, by the second contract address, a first amount of collateral,

wherein the first amount of collateral is received in accordance with the first contract instructions associated with the first smart contract address, and

wherein the first amount of collateral is a first amount of stable value tokens associated with the first user as collateral, and wherein the first amount of stable value tokens associated with the first user is based on the at least one collateral requirement;

(g) receiving, by the second contract address, a second amount of collateral,

wherein the first amount of collateral is received in accordance with the first contract instructions associated with the first smart contract address, and

wherein the second amount of collateral is a second amount of stable value tokens associated with the second user as collateral, wherein the second amount of stable value tokens associated with the second user is based on the at least one collateral requirement;

(h) generating, by the administrator system, first trade instructions for the security token smart contract, wherein the first trade instructions include execution instructions to execute a first trade between the first user and the second user, and

wherein the first trade is based on at least the following:

(1) the first contract information; and

(2) the first user response;

(i) sending, by the administrator system via the blockchain for the underlying digital asset, the first trade instructions, from an administrator public address associated with the administrator system, via the blockchain for the underlying digital asset to the first contract address,

wherein the first trade instructions are implemented by computer systems among the plurality of geographically distributed computer systems in the peer-to-peer network in accordance with the second contract instructions associated with the second smart contract address; and

(j) collecting, by the administrator system from the security token, excess collateral from the first trade, wherein the collecting step comprises sending, by the administrator system via the blockchain for the underlying digital asset, a collecting message comprising first requests for the security token to:

(A) determine first excess collateral for the first trade in accordance with the security token smart contract and the first contract instructions;

(B) determine second excess collateral for the first trade in accordance with the security token smart contract and the first contract instructions;

(C) distribute the first excess collateral for the first trade in accordance with the security token smart contract and the first trade instructions to the first user address; and

(D) distribute the second excess collateral for the first trade in accordance with the security token smart contract and the first trade instructions to the second user address.

2. The method of claim 1 , wherein the first user information further comprises a first user public address associated with the blockchain of the underlying digital asset, and wherein the first user public address corresponds to a first user private key that is mathematically related to the first user public address.

3. The method of claim 2 , wherein the second user information further comprises a second user public address associated with the blockchain of the underlying digital asset and wherein the second user public address corresponds to a second user private key that is mathematically related to the second user public address.

4. The method of claim 3 , wherein the step of receiving a first amount of collateral further comprises sending, by the first user device via the underlying blockchain from the first user public address associated with the underlying blockchain to the first smart contract address associated with the underlying blockchain, a first message comprising a request to transfer the first amount of collateral from the first user public address to the second smart contract address.

5. The method of claim 4 , wherein the first user device sends a second message to the first smart contract address including authorization for the security token smart contract to request a transfer of the first amount of collateral and wherein the administrator system sends a third message via the underlying blockchain to the second smart contract address with instructions to send a request from the second smart contract address to the first smart contract address for the first amount of collateral to be transferred from the first user public address to the second smart contract address.

6. The method of claim 3 , wherein the step of receiving a second amount of collateral further comprises sending, by the second user device via the underlying blockchain from the second user public address associated with the underlying blockchain to the first smart contract address associated with the underlying blockchain, a fourth message comprising a request to transfer the second amount of collateral from the second user public address to the second smart contract address.

7. The method of claim 6 , wherein the second user device sends a fifth message to the first smart contract address including authorization for the security token smart contract to request a transfer of the second amount of collateral via the blockchain, and the administrator system sends a sixth message via the underlying blockchain to the second smart contract address with instructions to send a request for the second amount of collateral to be transferred from the second user public address to the second smart contract address.

8. The method of claim 1 , further comprising the further steps of:

(k) recalculating the first collateral amount based on the at least one collateral requirement and current benchmark information;

(l) determining a first additional collateral amount based on a difference between the recalculated first collateral amount and the first collateral amount; and

(m) receiving, at the second smart contract address, the first additional collateral amount, wherein the first additional collateral amount is received based on the first contract instructions associated with the first smart contract address.

9. The method of claim 8 , wherein the recalculating step is performed by the first user device.

10. The method of claim 8 , wherein the recalculating step is performed by the administrator system, and further comprises:

(i) generating, by the administrator system, an alert including the first additional collateral amount; and

(ii) sending, by the administrator system, to the first user device, the alert.

11. The method of claim 10 , further comprising:

(n) monitoring, by the administrator system, the second contract address on the blockchain associated with the underlying digital asset;

(o) determining, by the administrator system, whether the first additional collateral amount is received by the second contract address; and

(p) generating, by the administrator system, a default notification when the administrator system determines that the first additional collateral amount is not received by the second contract address;

(q) sending, by the administrator system, the default notification to the first user device, the second user device and the second smart contract address;

(r) generating, by the administrator system, a seventh message including a request to transfer the first collateral amount and the second collateral amount in accordance with the first contract instructions; and

(s) sending, by the administrator system, the seventh message to the second smart contract address, where transfers of the first collateral amount and the second collateral amount are implemented by the plurality of geographically distributed computer systems in the peer-to-peer network.

12. The method of claim 1 , further comprising:

(k) recalculating the second collateral amount based on the at least one collateral requirement and current benchmark information;

(l) determining a second additional collateral amount based on a difference between the recalculated second collateral amount and the second collateral amount; and

(m) receiving, at the second smart contract address, the second additional collateral amount, wherein the second additional collateral amount is received based on the first contract instructions associated with the first smart contract address.

13. The method of claim 12 , wherein the recalculating step is performed by the second user device.

14. The method of claim 12 , wherein the recalculating step is performed by the administrator system, and further comprises:

(i) generating, by the administrator system, an alert to the second user including the second additional collateral amount; and

(ii) sending, by the administrator system, to the second user device, the alert.

15. The method of claim 12 , further comprising:

(n) monitoring, by the administrator system, the second contract address on the blockchain associated with the underlying digital asset;

(o) determining, by the administrator system, whether the second additional collateral amount is received by the second contract address;

(p) generating, by the administrator system, a default notification when the administrator system determines that the second additional collateral amount is not received by the second contract address;

(q) sending, by the administrator system, the default notification to the first user device, the second user device and the second smart contract address;

(r) generating, by the administrator system, an eighth message including a request to transfer the first collateral amount and the second collateral amount in accordance with the first contract instructions; and

(s) sending, by the administrator system, the eighth message to the second smart contract address, where transfers of the first collateral amount and the second collateral amount are implemented by the plurality of geographically distributed computer systems in the peer-to-peer network.

16. The method of claim 1 , further comprising:

(k) determining, by the administrator system, at the end of the contract duration, a payout amount based on at least the second contract instructions;

(l) generating, by the administrator system, payout instructions based at least on the first side information and the second side information;

(m) sending, by the administrator system, the payout instructions to the second contract address via the blockchain to provide the payout amount to one of the first user public address and the second user public address, wherein the payout instructions are implemented by the plurality of geographically distributed computer systems in the peer-to-peer network.

17. The method of claim 1 , further comprising:

(k) returning, by the administrator system from the security token smart contract, remaining collateral from the first trade, wherein returning comprises

sending a tenth message comprising requests for the security token smart contract to:

(1) determine first remaining collateral for the first trade in accordance with the security token smart contract and the first contract instructions;

(2) determine second remaining collateral for the first trade in accordance with the security token smart contract and the first contract instructions;

(3) distribute the first remaining collateral for the first trade in accordance with the security token smart contract and the first contract instructions; and

(4) distribute the second remaining collateral for the first trade in accordance with the security token smart contract and the first contract instructions.

18. The method of claim 1 , further comprising:

(k) determining a benchmark value, wherein the determining includes:

(1) sending, by the security token smart contract via the blockchain for the underlying digital asset, a request from the second contract address to an oracle smart contract at a third contract address associated with the blockchain for the underlying digital asset, wherein the oracle smart contract is associated with an oracle interface in contact with an authorized third party database, wherein the request includes a fifth message to obtain first benchmark information;

(2) receiving, by the security token smart contract from the oracle smart contract, the first benchmark information;

(3) executing, by the security token smart contract in response to receiving the first benchmark information, instructions to:

(A) store the first benchmark information.

19. The method of claim 18 , in the case where at least one of the first excess collateral is greater than zero or the second excess collateral is greater than zero, further comprising:

(k) calculating the first excess collateral for the first user and second excess collateral for the second user by using the first trade instructions and the first benchmark information;

(l) sending, from the second smart contract address to the first smart contract address, a twelfth message including a request for the stable value token smart contract to transfer:

(1) the first excess collateral in stable value tokens from the second contract address to the first user public address, if the first excess collateral is greater than zero; and

(2) the second excess collateral in stable value tokens from the second contract address to the second user public address, if the second excess collateral is greater than zero.

20. The method of claim 1 , wherein step 1(a) further comprises:

(i) generating, by the administrator system, graphical user interface information including at least one prompt for the first user to provide the contract proposal related to the first contract information;

(ii) sending, by the administrator system to the first user device, the graphical user interface information; and

(iii) receiving, from the first user device in response to the at least one prompt, the contract proposal.

21. The method of claim 1 , wherein the first contract information further comprises at least one of the following:

(H) derivative type information;

(I) early termination rules;

(J) a second benchmark;

(K) asset identification information;

(L) pricing model information; and

(M) volatility information.

22. The method of claim 1 , wherein the first contract information further comprises:

(H) first collateral information in stable value tokens.

23. The method of claim 1 , wherein the first contract information further comprises:

(H) second collateral information in stable value tokens.

24. The method of claim 1 , wherein the first contract information includes first transaction fee information.

25. The method of claim 1 , wherein the underlying digital asset is a digital math-based asset.

26. The method of claim 1 , wherein the underlying digital asset is Ether.

27. The method of claim 1 , wherein the underlying digital asset is Neo.

28. The method of claim 1 , wherein the first smart contract instructions of the first stable value smart contract are associated with more than one smart contract address.

Assignments (2)

Continuity (14)

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