Collateral Management with Blockchain and Smart Contracts

Collateral Management with Blockchain and Smart Contracts

What is CMBSC? What problems does it solve?

What are the key components used in the CMBSC system?

How are lending and borrowing transaction requests processed in the CMBSC system?

How does CMBSC leverage blockchain and smart contracts?

What is the role of the “Trading Process Optimizer” (TPO) component in CMBSC?

How does CMBSC optimize the process of synchronizing transaction data to the blockchain?

What data is stored on-chain and off-chain in the CMBSC system?

What is the function of the “Blockchain Synchronization Adapter” (BSA) component?

How does CMBSC improve the efficiency and transparency of the securities lending process?

What are the different types of oracles that can be used in the CMBSC system?

Quiz Answers

CMBSC is a “collateral management system based on blockchain and smart contracts”. It aims to improve the efficiency and transparency of collateral management in securities lending by automating and decentralizing the process.

The key components in the CMBSC system include: User Interface (UI), Middle Layer, Data Layer, Blockchain, Blockchain Synchronization Adapter (BSA), and Trading Process Optimizer (TPO).

When a user initiates a loan transaction request, the CMBSC system will first store the transaction details in the database, and then the TPO component will decide when to synchronize the transaction data to the blockchain based on preset rules or machine learning models.

CMBSC uses the decentralization and immutability of blockchain to store key transaction data and uses smart contracts to automatically execute terms in loan agreements, such as collateral settlement.

The TPO component is responsible for analyzing transaction data and determining the best time to synchronize transaction data to the blockchain based on preset rules or machine learning models, thereby optimizing system performance and costs.

CMBSC analyzes transaction data (such as transaction volume, time, risk, cost, etc.) through the TPO component and decides when to synchronize transaction data to the blockchain in batches based on preset rules or machine learning models, rather than synchronizing each transaction, thereby optimizing the synchronization process.

In the CMBSC system, transaction attributes (such as customer ID, security ID, quantity, etc.) are stored on the chain, while static data (such as company name, customer address, etc.) are stored in the off-chain database.

The BSA component is responsible for synchronizing transaction data to nodes on the blockchain network and deploying smart contracts to the blockchain according to the instructions of the TPO component.

CMBSC improves the efficiency and transparency of the securities lending process by automating and decentralizing the process, reducing manual operations and reliance on intermediaries.

Various types of oracles can be used in the CMBSC system, such as stock exchanges, GPS data providers, time providers, crowdsourced decentralized data providers, news providers, etc., to obtain the data required for smart contract execution.

Glossary

Term Definitions CMBSC Collateral Management System Based on Blockchain and Smart Contracts Blockchain A growing list of records linked and protected using cryptography Smart Contracts Computer programs stored on the blockchain and automatically executed Oracles Third-party services that provide off-chain data to smart contracts Transaction Process Optimizer (TPO) Component that analyzes transaction data and determines the best blockchain synchronization time Blockchain Synchronization Adapter (BSA) Component responsible for synchronizing data to the blockchain Fully paid securities Fully paid securities in customer accounts Collateral agent A third party that holds collateral for borrowed securities Ethereum A decentralized blockchain platform Solidity Programming language used to write Ethereum smart contracts