FINANCIAL DERIVATIVE SMART CONTRACT EXECUTION PLATFORM, SYSTEM AND METHOD
A system and method for processing and executing financial derivative contracts between one or more counterparties uses a distributed blockchain ledger and a smart contract and without the need for a trusted third party or intermediary. The system may have a plurality of distributed ledger nodes that each host the distributed ledger and the smart contract that are coupled to a management computer system that facilitates the processing and executing of the financial derivative using the distributed ledger and the smart contract.
1 . A system, comprising:
a plurality of distributed ledger nodes that operate in a peer to peer network, each distributed ledger node being a computer system that hosts a blockchain component that stores a distributed ledger shared between the plurality of distributed ledger nodes that stores transactions and a smart contract for a derivative contract; and
a management computer system, connected to each of the plurality of distributed ledger nodes, the management computer system having a processor, memory and a plurality of lines of instructions configured to:
negotiate, using the distributed ledger, a derivative smart contract between one or more counterparties without a trusted third party; and
execute, using the distributed ledger, the negotiated derivative smart contract without a trusted third party.
2 . The system of claim 1 , wherein the management computer system simultaneously negotiates and executes multiple financial derivative contracts.
3 . The system of claim 2 , wherein each financial derivative contract has different counterparties and different contract specification parameters.
4 . The system of claim 1 , wherein the financial derivative contract further comprises one or more contract specification parameters.
5 . The system of claim 4 , wherein the one or more contract specification parameters include one or more of a notional, an index name, a calculation period, a tenor period.
6 . The system of claim 4 , wherein the management computer system is further configured to translate the one or more contract specification parameters into a set of smart contract parameters.
7 . The system of claim 1 , wherein the management computer system is further configured to generate a list of one or more events, wherein the one or more events include one of a pending schedule of events and past executed events.
8 . The system of claim 7 , wherein the one or more events capture derivative contract execution details.
9 . The system of claim 8 , wherein the derivative contract execution details include one or more of a fixed rate/payment calculation, a float rate retrieval and float payment calculation and a net payment.
10 . The system of claim 1 further comprising an oracle service external to the smart contract connected to a network to which the plurality of distributed ledger nodes and the management computer system is connected, wherein the management computer system is further configured to reliably and securely coordinate a periodic collection of derivative contract information from the oracle service.
11 . The system of claim 10 , wherein the derivative contract information from the oracle service further comprises a derivative contract floating rate.
12 . The system of claim 1 , wherein the system, using the generated smart contract, periodically computes and triggers net payments between the one or more counterparties.
13 . The system of claim 1 , wherein the system, using the generated smart contract, maintains an account balance for each of the counterparties.
14 . The system of claim 4 , wherein the management computer system is further configured to one of receive the one or more contract specification parameters through a graphical user interface, receive the one or more contract specification parameters uploaded using a contract specification format and receive the one or more contract specification parameters from an external source over an application programming interface.
15 . The system of claim 1 , wherein the management computer system is further configured to permanently record the derivative contract in the distributed ledger.
16 . The system of claim 1 , wherein the management computer system is further configured to permanently record each execution step of the derivative contract that is verified by each counterparty's distributed ledger node.
17 . A method, comprising:
providing a plurality of distributed ledger nodes that operate in a peer to peer network, each distributed ledger node being a computer system that hosts a blockchain component that stores a distributed ledger shared between the plurality of distributed ledger nodes that stores transactions and a smart contract for a derivative contract;
negotiating, using the distributed ledger, a derivative smart contract between one or more counterparties without a trusted third party; and
executing, using the distributed ledger, the negotiated derivative smart contract without a trusted third party.
18 . The method of claim 17 further comprising simultaneously negotiating and executing multiple financial derivative contracts.
19 . The method of claim 18 , wherein each financial derivative contract has different counterparties and different contract specification parameters.
20 . The method of claim 17 , wherein the financial derivative contract further comprises one or more contract specification parameters.
21 . The method of claim 20 , wherein the one or more contract specification parameters include one or more of a notional, an index name, a calculation period, a tenor period.
22 . The method of claim 20 further comprising translating the one or more contract specification parameters into a set of smart contract parameters.
23 . The method of claim 17 further comprising generating a list of one or more events, wherein the one or more events include one of a pending schedule of events and past executed events.
24 . The method of claim 23 , wherein the one or more events capture derivative contract execution details.
25 . The method of claim 24 , wherein the derivative contract execution details include one or more of a fixed rate/payment calculation, a float rate retrieval and float payment calculation and a net payment.
26 . The method of claim 17 further comprising reliably and securely coordinating a periodic collection of derivative contract information from an oracle service.
27 . The method of claim 26 , wherein the derivative contract information from the oracle service further comprises a derivative contract floating rate.
28 . The method of claim 17 further comprising periodically computing and triggering net payments between the one or more counterparties.
29 . The method of claim 17 further comprising maintaining an account balance for each of the counterparties.
30 . The method of claim 20 further comprising one of receiving the one or more contract specification parameters through a graphical user interface, receiving the one or more contract specification parameters uploaded using a contract specification format and receiving the one or more contract specification parameters from an external source over an application programming interface.
31 . The method of claim 17 further comprising permanently recording the derivative contract in the distributed ledger.
32 . The method of claim 17 further comprising permanently recording each execution step of the derivative contract that is verified by each counterparty's distributed ledger node.