Digital Asset Custody and Trading System

Digital Asset Custody and Trading System

Glossary

Digital Asset: An asset that exists in electronic form and can be securely stored and traded using cryptography.

Blockchain: A decentralized distributed ledger that records transaction history and is maintained by multiple nodes in the network.

Private Key: A key used to authorize digital asset transactions, which must be kept strictly confidential.

Public Key: Paired with a private key, it can be made public and is used to verify digital signatures and transactions.

Digital Wallet: A software or hardware device that stores digital asset private and public keys.

Custody: A service in which a third party institution holds digital assets on behalf of the user.

Authorized Participant (AP): An institutional investor that trades digital assets on an exchange, such as a market maker, broker, etc.

Net Asset Value (NAV): The net asset value represented by each share in a digital asset trust fund.

Transaction Fee: The fee required to conduct transactions on the blockchain.

Cold Storage: Storing digital asset private keys in an offline environment to improve security.

Multi-signature: A security mechanism that requires multiple key authorizations to conduct transactions.

Anti-Money Laundering (AML): Measures designed to prevent money laundering activities through digital asset transactions.

Arbitrage: Trading using price differences between different exchanges to make profits.

Short answer questions

What is the main purpose of this patent? This patent aims to provide a safe and reliable digital asset custody and trading system that protects the security of user digital assets by storing private keys in segments and using technical means such as multi-signatures.

What are the two private key storage methods mentioned in the patent? The patent mentions two private key storage methods: one is to store the private key in multiple physical or electronic vaults after segmentation and encryption; the other is to store the encrypted private key in a cold storage device.

What role does the authorized participant (AP) play in this system? Authorized participants are institutional investors in digital asset exchanges who can create and redeem digital asset trust fund shares and conduct large digital asset transactions.

How does the patent calculate the net asset value (NAV) of a digital asset trust fund? First, the system obtains digital asset price data from multiple exchanges and calculates a weighted average price; then, the total asset value is calculated based on the number of digital assets held by the trust fund and the weighted average price; finally, the accrued fees and expenses are subtracted to obtain the net asset value.

What types of digital asset transactions are described in the patent? The patent describes multiple types of digital asset transactions, including spot transactions, futures transactions, automatic transactions, and arbitrage transactions.

What role does the Digital Asset Kiosk play in the system? The Digital Asset Kiosk is an offline terminal device for users to trade and manage digital assets. Users can use the device to buy, sell, and store digital assets.

What are the anti-money laundering (AML) measures mentioned in the patent? The AML measures mentioned in the patent include collecting user identity information, verifying user residence, and cooperating with registered currency dealers.

How do users set digital asset price alerts? Users can set price alert rules in the system. For example, when the price of a digital asset rises or falls to a specific value, the system will notify the user by email, SMS, etc.

How does the automatic trading system work? Users can set trading rules in the automatic trading system, such as automatically executing buy or sell operations when certain conditions are met, and the system will automatically complete the transaction according to the preset rules.

What is the arbitrage trading method described in the patent? The arbitrage trading method described in the patent is to take advantage of the price differences between different digital asset exchanges, buy digital assets on exchanges with lower prices, and then sell them on exchanges with higher prices to make a profit.