System, method, and apparatus for trading in a decentralized market

• US 8,510,204 B2
• Filed: 02/01/2007
• Issued: 08/13/2013
• Est. Priority Date: 02/02/2006
• Status: Active Grant

• Current Assignee: PrivateMarkets, Inc.
• Original Assignee: PrivateMarkets, Inc.
• Inventors: Lord, Thomas
• Primary Examiner(s): Hammond, III, Thomas M
• Application Number:
  US11/670,054
• Publication Number:
  US 20070179881A1
• Time in Patent Office: 2,385 Days
• Field of Search: 705 35- 45
• US Class Current: 705/37
• CPC Class Codes: G06Q 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange

Abstract

A method and system for facilitating the execution of transactions in a decentralized market are provided herein. The decentralized market includes a number of execution points each associated with and maintained in a secure environment by a single participant. Each participant is able to control the amount of data that is made publicly available, if at all, regarding any transactions that are conducted at that participant'"'"'s execution point.

Claims

1. A decentralized system for conducting transactions, comprising:

first server resources associated with a first trading party, the first server resources comprising the following in the form of instructions stored in tangible memory;

an application layer;

a first execution system configured to execute offer-and-acceptance-type transactions initiated by the application layer of the first server in response to the first trading party generating and submitting an offer to a second trading party; and

a first messaging system working in conjunction with the first execution system;

second server resources associated with the second trading party, the second server resources in communication with the first server resources, the second server resources being separate and distinct from the first server resources and the second server resources comprising the following in the form of instructions stored in tangible memory;

an application layer;

a second execution system, different from the first execution system, configured to execute offer-and-acceptance-type transactions initiated by the application layer of the second server in response to the second trading party generating and submitting one or more of an offer and counteroffer to the first trading party or a third trading party; and

a second messaging system working in conjunction with the second execution system;

wherein the first trading party originates a transaction using the application layer of the first server resources, wherein the transaction comprises an offer having a number of parameters associated therewith, wherein the first trading party employs the first messaging system of the first server resources to send the offer to the second server resources, and wherein automatic execution rights associated with the transaction are maintained exclusively by the first execution system of the first server resources, and wherein the first and second trading parties are counterparties to the transaction.

2. The system of claim 1, wherein at least one of the first and second server resources are temporarily allocated to the respective trading party from a server pool, and wherein the temporarily allocated server resources are returned to the server pool for allocation to another trading party after the transaction has at least one of expired, been rendered unavailable, been killed, and been executed.

3. The system of claim 1, wherein at least one of the first and second server resources are maintained by the respective first and second trading parties.

4. The system of claim 1, wherein the exclusive automatic execution rights of the first execution system of the first server resources are transferred to the execution system of the second server resources in response to the first trading party granting the second trading party a held order, wherein the held order comprises a time dependent free option on the transaction allowing the second party to decide whether or not to accept the offer generated by the first party within a predetermined amount of time and wherein during that predetermined amount of time the first execution system of the first party is restricted from executing any other transactions.

5. The system of claim 1, wherein messages transmitted between the first and second messaging systems of the first and second server resources, including information related to the execution of the transaction, are maintained in confidentiality between the first and second parties.

6. The system of claim 1, wherein the first execution system automatically executes the transaction based on executed parameters that comprise one of the following:

i) in the event that the second trading party accepts the offer from the first trading party, the executed parameters comprise the parameters associated with the original offer; and

ii) in the event that second trading party transmits a counteroffer to the first trading party, the executed parameters comprise parameters associated with an accepted counteroffer.

7. The system of claim 6, wherein the accepted counteroffer is transmitted by the second trading party to the first party and accepted at the first execution system of the first server.

8. The system of claim 1, further comprising a database for maintaining audit logs, wherein an audit log maintained for the first trading party comprises messages transmitted by the first messaging system of the first server resources, and wherein an audit log maintained for the second trading party comprises message transmitted by the second messaging system of the second server resources.

9. A method of initiating a transaction in a decentralized market, comprising:

determining at least one participant that will be invited to participate in the transaction as a counterparty to the transaction;

in response to determining the at least one participant, generating participant data with a first server resource maintained in tangible memory and associated with a first trading party that is also a counterparty to the transaction and will bound to a legal agreement with the first party in the event the at least one participant accepts terms of the transaction;

determining, at the first server resource, transaction details;

in response to determining said transaction details, generating transaction data at the first server resource;

creating a message at the first server resource, the message comprising at least one of said participant data and transaction data; and

sending said message to said at least one participant, wherein said message is transmitted from a single originating execution point corresponding to the first server resource to a different execution point physically separated from the single originated execution point by a publicly accessible communication network and further associated with the at least one participant and wherein information related to said transaction is maintained in a secure state at said originating execution point and only shared with the at least one participant that received the message.

10. The method of claim 9, wherein said determining transaction details comprises at least one of determining a commodity, whether the transaction is to buy or sell the commodity, a price of the commodity, an amount of the commodity, and an offer expiration time.

11. The method of claim 9, wherein said determining transaction details comprises at least one of determining a commodity and an amount of the commodity, and wherein transmission of the transaction details is allowed without a determination of a price for purchase or sale of the commodity.

12. The method of claim 11, further comprising retaining an ability to create an executable transaction and offer expiration time after a price of the commodity is determined.

13. The method of claim 9, wherein said determining transaction details comprises determining that the transaction comprises a held transaction.

14. The method of claim 13, further comprising:

a first party granting the held transaction to a second party for a predetermined amount of time, the first party being associated with the first server resource;

restricting the first server resource from accepting offers from any party other than the second party for the predetermined amount of time; and

allowing the second party to have the option of accepting the held transaction without risk of the held transaction being revoked for the predetermined amount of time.

15. The method of claim 14, wherein the first party comprises an originating party.

16. The method of claim 14, further comprising transferring an execution gate from the first server resource to the second party for the predetermined amount of time.

17. The method of claim 16, further comprising after the predetermined amount of time, transferring the execution gate back to the first party.

18. The method of claim 9, wherein said sending said message comprises encrypting the message prior to transmission.

19. The method of claim 9, wherein at least one of said originating execution point and said execution points of said at least one participant comprises at least one of a computer, server, and database.

20. The method of claim 9, further comprising maintaining an execution gate in association with an originating participant such that only the execution point associated with the originating participant is allowed to execute a transaction originated by the originating participant.