Transferable equity instruments on blockchain and their trading system

Transferable equity instruments on blockchain and their trading system

Transferable equity instruments on blockchain:

Invention content: A system and method for issuing, purchasing and reselling transferable securities (especially equity) on a blockchain platform is proposed, which complies with current federal, state and issuing and holding entity rules and regulations.

Security form: Transferable equity exists in the form of "Blockchain Transferable Equity Instrument" (BITE) tokens, which represent different forms of securities, such as common stock, preferred stock, options, etc.

Transaction process and functions:

User registration and authentication: Investors register through user devices and authenticate through the blockchain platform to participate in the issuance of tokenized securities.

Securities issuance and purchase: The issuing entity deploys the BITE token contract on the blockchain, and receives the currency of the investor's purchase of tokens through the server computer, and sends the tokens to the investor's account.

Transaction records and transparency: All transactions are recorded on the blockchain, ensuring the transparency and immutability of the transaction.

Smart contracts and automation:

Smart contract applications: Use smart contract technology to automatically execute the terms of the tokenized securities contract, including ownership transfer, contract control and transaction verification.

Automated transfer: The server computer provides automated transfer capabilities for tokenized securities holders, simplifying the transaction process.

Compliance and regulation:

Compliance mechanism: The system supports compliance requirements of regulatory agencies such as the SEC (U.S. Securities and Exchange Commission), such as investor certification, anti-money laundering (AML) and know your customer (KYC) policies.

Regulatory compliance: The system is able to automatically execute and monitor transactions that comply with SEC rules to ensure the fairness and legality of market transactions.

Transaction security and privacy:

Privacy protection: By adding unique, personalized watermarks to investor documents and automatically embedding these watermarks on the blockchain, the privacy and integrity of the documents are protected.

Secure transactions: The use of blockchain technology ensures the security and irreversibility of transactions, avoiding many security risks in traditional financial systems.

Market and trading functions:

Secondary market transactions: After the issuance period, tokenized securities are traded in the secondary market, and the system provides the market framework and tools required for transactions.

Proxy voting and rights management: The system supports shareholders to vote through proxy contracts and manage various equity-related rights, such as pre-emptive rights, redemption rights, etc.

Technology and system architecture:

Distributed ledger: All transactions are recorded using distributed ledger technology, providing a high degree of transparency and security.

Cloud infrastructure: The system uses cloud infrastructure to support high availability and scalability, capable of handling large amounts of transactions and data storage requirements.

The document presents an innovative blockchain application through a detailed technical description and system architecture, designed to simplify, make transparent and automate the transaction process of transferable equity while ensuring compliance and security. These innovations not only improve the efficiency of financial markets, but also reduce many costs and risks in traditional financial systems.