METHOD FOR CREATING COMMODITY ASSETS FROM UNREFINED COMMODITY RESERVES UTILIZING BLOCKCHAIN AND DISTRIBUTED LEDGER TECHNOLOGY

• US 20190080392A1
• Filed: 03/08/2018
• Published: 03/14/2019
• Est. Priority Date: 03/08/2017
• Status: Active Grant

• Current Assignee: IP Oversight Corporation
• Original Assignee: IP Oversight Corporation
• Inventors: Youb, Christopher, Mehlman, Scott, Zimits, Michael, Youb, Bruce
• Granted Patent: US 11,188,977 B2
• Time in Patent Office: Days
• CPC Class Codes: G06F 16/1805 Append-only file systems, e.g. using logs or journals to store data
• CPC Class Codes: G06F 21/64 Protecting data integrity, e.g. using checksums, certificates or signatures
• CPC Class Codes: G06Q 20/065 using e-cash
• CPC Class Codes: G06Q 20/38215 Use of certificates or encrypted proofs of transaction rights
• CPC Class Codes: G06Q 20/401 Transaction verification
• CPC Class Codes: G06Q 2220/00 Business processing using cryptography postage metering system using cryptography G06Q2250/05
• CPC Class Codes: G06Q 30/02 Marketing; Price estimation or determination; Fundraising
• CPC Class Codes: G06Q 30/0645 Rental transactions; Leasing transactions
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• CPC Class Codes: G06Q 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange
• CPC Class Codes: G06Q 50/16 Real estate
• CPC Class Codes: H04L 9/0643 Hash functions, e.g. MD5, SHA, HMAC or f9 MAC
• CPC Class Codes: H04L 9/3213 using tickets or tokens, e.g. Kerberos network architectures or network communication protocols for entities authentication using tickets in a packet data network H04L63/0807
• CPC Class Codes: H04L 9/50 using hash chains, e.g. blockchains or hash trees

Abstract

A method for creating an asset-backed distributed ledger token representing a smart contract, the token being backed by a pledge of an illiquid form of a precursor or means of production of a commodity asset, comprising receiving a pledge of unrefined or pre-commodity asset, digitizing the unrefined commodity asset into fractional representations of the commodity asset using smart contracts on a distributed ledger network, and allowing account holders access to the perform transactions on the distributed ledger network to trade the fractional representations under the terms of the smart contract.

Claims

1. A token, representing an interest in a smart contract, the smart contract representing an agreement, secured by a security interest in real property or a right in real property, to return the token within a predetermined period.

2. The token according to claim 1, wherein the smart contract is implemented in conjunction with a distribute ledger.

3. The token according to claim 1, wherein the predetermined period is tolled if a substitute asset is tendered.

4. The token according to claim 3, wherein the real property or a right in real property comprises a mine having proven available reserves of the substitute asset.

5. The token according to claim 4, wherein the substitute asset is gold.

6. The token according to claim 4, wherein the proven available reserves are a predetermined multiple of the substitute asset.

7. The token according to claim 1, wherein the token represents a fractional interest in the real property or a right in real property.

8. The token according to claim 1, wherein the token is generated as a transaction of a cryptographically-authenticated, distributed ledger comprising a database held and updated independently by each of a plurality of distributed elements, forming a consensus determination of transaction validity.

9. The token according to claim 1, wherein the agreement, secured by the security interest in real property or a right in real property, is terminated if the token is returned within the predetermined period, else the security interest in the real property or a right in real property is exercised.

10. A method of defining a token, comprising:

defining a smart contract, representing an agreement, secured by a security interest in real property or a right in real property, to return the token within a predetermined period;

pledging the real property or a right in real property as the security interest to secure the smart contract; and

issuing the token.

11. The method according to claim 10, further comprising returning the token, and releasing the real property or a right in real property from the security interest.

12. The method according to claim 10, wherein the smart contract is implemented in conjunction with a distribute ledger.

13. The method according to claim 10, wherein:

the token comprises a fractional interest in the real property or a right in real property,

the predetermined period is tolled if a substitute asset is tendered,

the real property or a right in real property comprises a mine having proven available reserves of the substitute asset, and

wherein the proven available reserves are a predetermined multiple of the substitute asset.

15. The method according to claim 10, wherein the token is generated as a transaction of a cryptographically-authenticated, distributed ledger comprising a database held and updated independently by each of a plurality of distributed elements, forming a consensus determination of transaction validity.

16. The method according to claim 10, further comprising exercising the security interest in the real property or a right in real property after the predetermined period if the token is not returned.

14. The method according to claim 14, wherein the substitute asset is gold.

17. A method for creating a liquid token representation from an illiquid asset comprising:

receiving a pledge of an illiquid asset; and

digitizing the illiquid asset into fractional representations using a smart contract on a distributed ledger network, the fractional representations being secured by the pledge of the illiquid asset as collateral.

18. The method according to claim 17, further comprising trading a fractional representation on an exchange, recorded in a distributed ledger network.

19. The method according to claim 17, wherein the smart contract comprises an illiquid asset description, an illiquid asset owner, a quantity, and at least one redemption rule.

20. The method according to claim 19, wherein the at least one redemption rule comprises a maturity date which triggers a release of the pledged illiquid asset as collateral back to the illiquid asset owner in exchange for return of all of the original fractional representations.