DESC:CROSS REFERENCE
[001] The present Patent Application is the cognate complete after provisional patent application based on the provisional patent application number 202321061605 dated September 13, 2023. Further, the other provisional applications number 202421003215 dated January 17, 2024 & 202421055107 dated July 18,2024 have been merged into the present cognate complete after provisional patent application. The provisional patent application number 202321061605 dated September 13, 2023, 202421003215 dated January 17, 2024 & 202421055107 dated July 18,2024, is incorporated by reference in its entirety, along with the original as filed definitions and specifications.
TECHNICAL FIELD
[002] The present disclosure described herein, in general, relates to systems and methods for processing a blockchain network. Specifically, the present disclosure described blockchain-based Financial Solutions and related methods.
BACKGROUND
[003] The financial technology sector has seen rapid advancements in recent years, particularly with the advent of blockchain technology and decentralized finance (DeFi). Blockchain technology offers a decentralized and transparent way to record transactions, which has the potential to revolutionize traditional banking and financial systems. DeFi, on the other hand, aims to recreate and improve upon traditional financial systems using blockchain technology, offering services such as lending, borrowing, and trading without the need for intermediaries. These innovations promise to increase financial inclusion, reduce costs, and enhance security and transparency in financial transactions.
[004] Despite these advancements, several challenges remain. Traditional financial systems are often slow, expensive, and opaque, making them inaccessible to a large portion of the global population. Additionally, the volatility of cryptocurrencies and the complexity of blockchain technology can be barriers to widespread adoption. There is a need for solutions that can bridge the gap between traditional finance and the emerging DeFi ecosystem, providing users with the benefits of both worlds while mitigating the associated risks. This is where the current invention comes into play, offering innovative solutions to address these challenges and enhance the overall efficiency and accessibility of financial services.
SUMMARY
[005] Embodiments of the present disclosure present technological improvements as solutions to one or more of the above-mentioned technical problems.
[006] The present subject matter relates to systems and methods for processing a blockchain network. Specifically, the present disclosure described blockchain-based Financial Solutions and related methods. It is to be understood that this application is not limited to the particular methods or system, or assembly described herein, as there can be multiple possible embodiments which are not expressly illustrated in the present disclosed subject matter. It is also to be understood that the terminology used in the description is for the purpose of describing the implementations or versions or embodiments only and is not intended to limit the scope of the present subject matter.
[007] This summary is provided to introduce aspects related to systems and methods for processing a blockchain network, specifically, the present disclosure described blockchain-based Financial Solutions and related methods. This summary is not intended to identify essential features of the claimed subject matter nor is it intended for use in determining or limiting the scope of the present subject matter.
[008] In accordance with embodiments, a computer-implemented method is provided for managing a blockchain-based financial ecosystem. The method includes creating multiple baskets containing multiple tokenized assets by users, users can also optimize their coin value by creating a smart contract for managing tokens in a master basket. Artificial intelligence and machine learning-based algorithms and algorithmic trading algorithms connected with the smart contract exchange tokenized assets in the master basket with tokenized assets in a decentralized exchange to optimize the users' coin value This method also includes taking loans from financial institutions by network participants, and having the loans mined on a blockchain network to create fixed income decentralized autonomous organizations (DAOs). The method further includes securing interest rate payments of the loans by the network participants and having another loan mined using products and services created by a previous loan as raw material for creation of products and services of the next loan mined to create non-speculative value creation . Network participants can apply to complete tasks in the DAOs of the mined loans and receive rewards in the form of increased coin value and minted coins. Miners run optimization algorithms and language models for capital allocation and smart contract generation, where the smart contract contains details of capital allocation, interest rate payments, collateral, and duration of the loan. ArQ Bank, which is the centralized database node on this blockchain network validate the smart contract created by mining loans and allow the DAOs to go live on the blockchain. A smart contract-based structured DAO manages cash flows generated by underlying assets to create fixed income products. The smart contract transfers an amount generated to the user, burns newly created tokens, and mints users' coins to execute terms of the smart contract.
[009] In accordance with other embodiments, the method further includes storing users' account details including account balance and transaction history by a centralized server of the ArQ bank node of the blockchain network. The users’ coins are backed by a fiat currency of a country to which each user belongs. User’s coin value is derived from tokenized assets owned by the user. The tokenized assets may comprise securities, commodities, decentralized finance tokens, real estate, or non-fungible tokens. The products and services created by the previous loan are used as raw material for creation of products and services of next loan mined to enable non-speculative value creation and increased network activity. The tasks in the DAOs of the mined loans are completed by the network participants to earn rewards and increase coin value. The smart contract is generated by the miners utilizing artificial intelligence and optimization techniques, and loan terms are incorporated into the smart contract. The fixed income products comprise collateralized loan obligations. The smart contract facilitates token transfers and manages a token life cycle through burning and minting.
[0010] In yet other embodiments, a system is provided for managing a blockchain-based financial ecosystem. The system comprises a blockchain network, a plurality of user devices associated with users and network participants, Permissioned network of ArQ validators and permissioned validator network of currency specific shards a centralized server called ArQ Bank , and a processor. The processor is configured to create self-sovereign digital currency by tokenizing assets and creating multiple baskets containing multiple tokenized assets by users, facilitate taking of loans from financial institutions by the network participants, and mine the loans on the blockchain network to create fixed income decentralized autonomous organizations (DAOs). The processor also secures interest rate payments of the loans by the network participants and has another loan mined using products and services created by a previous loan as raw material for the creation of products and services of the next loan mined which can then be used to create non-speculative value from the next loan. Network participants can apply to complete tasks in the DAOs of the mined loans and receive rewards in the form of increased coin value and minted coins. Miners run machine learning algorithms, artificial intelligence algorithms, optimization algorithms and large language model algorithms for capital allocation and smart contract generation, where the smart contract contains details of capital allocation, interest rate payments, collateral, and duration of the loan. ArQ bank node of the blockchain network validate the smart contract created by mining loan and allow the DAOs to go live on the blockchain. A smart contract-based structured DAO manages cash flows i.e. principal amount and interest rate payments generated by underlying assets to create fixed income products. The smart contract transfers an amount generated to the user, burns newly created tokens, and mints users' coins to execute terms of the smart contract.
[0011] In accordance with other embodiments, the tokenized assets may comprise securities, commodities, decentralized finance tokens, real estate, or non-fungible tokens, and the users' coins are backed by a fiat currency of a country to which each user belongs. The products and services created by the previous loan are used as raw material for the creation of products and services of the next loan mined to enable non-speculative value creation and increased network activity. The tasks in the DAOs of the mined loans are completed by the network participants to earn rewards and increase coin value. The smart contract is generated by the miners utilizing artificial intelligence and optimization techniques, and loan terms are incorporated into the smart contract. The fixed income products comprise collateralized loan obligations. The smart contract facilitates token transfers and manages a token life cycle through burning and minting. The centralized server of the central bank stores users' account details and transaction history. The processor is further configured to exchange tokenized assets in the master basket with tokenized assets in a decentralized exchange using artificial intelligence and machine learning-based algorithms and algorithmic trading algorithms connected with the smart contract to optimize the users' coin value.
[0012] In accordance with yet other embodiments, a computer-implemented method is provided for optimizing user coin value in a self-sovereign digital currency system. The method includes creating multiple baskets containing tokenized assets by network users, choosing a master basket from the multiple baskets, wherein the master basket has the most value or is the best performing basket, and deriving a higher percentage of coin value from the master basket compared to other tokenized assets owned by the network users, thereby gamifying coin value and preventing dis-incentivization of tokenizing non-performing assets.
[0013] In accordance with other embodiments, the basket with the most value contains tokenized securities, commodities, active DeFi tokens, tokenized real estate. The digital tokens comprise DeFi tokens and user coins, and the DeFi tokens are transferred to the user and burned after smart contract terms are met, while the user coins are minted. Network users derive coin value from tokenized securities, commodities, active DeFi tokens, tokenized real estate, and by completing tasks in DAOs of mined loans. The user coins are backed by fiat currency of a country to which the network user belongs. Network participants apply to complete tasks in DAOs of mined loans and receive rewards in the form of increased coin value and minted coins upon completion and validation of the tasks.
[0014] In yet other embodiments, a self-sovereign digital currency system is provided. The system comprises a network interface for creating multiple baskets containing tokenized assets by network users and a processor. The processor is configured to choose a master basket from the multiple baskets, wherein the master basket has the most value or is the best performing basket, and derive a higher percentage of coin value from the master basket compared to other tokenized assets owned by the network users, thereby gamifying coin value and preventing dis-incentivization of tokenizing non-performing assets.

BRIEF DESCRIPTION OF THE DRAWINGS
[0015] The foregoing detailed description of embodiments is better understood when read in conjunction with the appended drawings. For the purpose of illustrating the disclosure, there is shown in the present document example constructions of the disclosure; however, the disclosure is not limited to the specific methods and systems disclosed in the document and the drawings.
[0016] The present disclosure is described in detail with reference to the accompanying figures. In the figures, the left-most digit(s) of a reference number identifies the figure in which the reference number first appears. The same numbers are used throughout the drawings to refer various features of the present subject matter.
[0017] Figure 1 illustrates a block diagram depicting a system for processing a blockchain network, in accordance with an embodiment of the present subject matter.
[0018] Figure 2 illustrates a schematic diagram depicting coin value in self-sovereign digital currency, in accordance with an exemplary embodiment of the present subject matter.
[0019] Figure 3 illustrates a schematic diagram depicting the creation of basket(s) of tokenized assets, in accordance with an exemplary embodiment of the present subject matter.
[0020] Figure 4 illustrates a schematic diagram depicting transaction using self-sovereign digital currency during an exemplary transaction using proposed self-sovereign digital currency token economic model, in accordance with an exemplary embodiment of the present subject matter.
[0021] Figure 4A illustrates an exemplary depicting coin values and its corresponding coin numbers for at least two users in an exemplary transaction, in accordance with an exemplary embodiment of the present subject matter.
[0022] Figures 5a-5b illustrate a graphical representation depicting creation of master basket and coin value optimization during the exemplary transaction, in accordance with an exemplary embodiment of the present subject matter.
[0023] Figures 6 illustrate a schematic diagram depicting a framework for incentivization of network participants to complete task in DAO’s of mined loans, in accordance with an exemplary embodiment of the present subject matter.
[0024] Figure 7 illustrates a schematic diagram depicting an exemplary network architecture, in accordance with an exemplary embodiment of the present subject matter.
[0025] Figure 8 illustrates a schematic diagram depicting exemplary transaction model between at least two ledgers in Proof of Network Consensus Protocol, in accordance with an exemplary embodiment of the present subject matter.
[0026] Figures 9, 10 & 11 illustrate a schematic diagram depicting exemplary process of mining loans and creation of fixed income products, in accordance with an exemplary embodiment of the present subject matter.
[0027] Figure 12 illustrates a schematic diagram depicting processing of DAO tokens to create fixed income instruments, in accordance with an exemplary embodiment of the present subject matter.
[0028] Figure 13 illustrates a schematic diagram depicting hedging risk by adding multiple pathways for cash flows inside the contract of mined loan, in accordance with an exemplary embodiment of the present subject matter.
[0029] Figure 14 illustrates a schematic diagram depicting the creation of DeFi token, in accordance with an exemplary embodiment of the present subject matter.
[0030] Figure 15 illustrates a schematic diagram depicting an example exemplary transaction process of Loan token in the proposed blockchain network, in accordance with an exemplary embodiment of the present subject matter.
[0031] The figures depict various embodiments of the present invention for purposes of illustration only. One skilled in the art will readily recognize from the following discussion that alternative embodiments of the structures and methods illustrated herein may be employed without departing from the principles of the invention described herein.
DETAILED DESCRIPTION
[0032] The invention will now be described with reference to the accompanying drawings and embodiments which do not limit the scope and ambit of the invention. The description provided is purely by way of example and illustration.
[0033] One or more embodiments are provided so as to thoroughly and fully convey the scope of the present invention to the person skilled in the art. Numerous details, are set forth, relating to specific components, and methods, to provide a complete understanding of embodiments of the present invention. It will be apparent to the person skilled in the art that the details provided in the embodiments should not be construed to limit the scope of the present invention. In some embodiments, well-known processes, well-known apparatus structures, and well-known techniques are not described in detail.
[0034] The terminology used, in the present invention, is only for the purpose of explaining a particular embodiment and such terminology shall not be considered to limit the scope of the present invention. As used in the present invention, the forms "a,” "an," and "the" may be intended to include the plural forms as well, unless the context clearly suggests otherwise. The terms "comprises," "comprising," “including,” and “having,” are open ended transitional phrases and therefore specify the presence of stated features, integers, steps, operations, elements, modules, units and/or components, but do not forbid the presence or addition of one or more other features, integers, steps, operations, elements, components, and/or groups thereof. The particular order of steps disclosed in the method and process of the present invention is not to be construed as necessarily requiring their performance as described or illustrated. It is also to be understood that additional or alternative steps may be employed.
[0035] Various modifications to the embodiment will be readily apparent to those skilled in the art and the generic principles herein may be applied to other embodiments. For example, although the present disclosure will be described in the context of a system and method for processing a blockchain network, it will readily recognize that the method and the system can be utilized in any situation where there is need to provide transmission of data from one node to other nodes. Thus, the present disclosure is not intended to be limited to the embodiments illustrated but is to be accorded the widest scope consistent with the principles and features described herein.
[0036] In one or more embodiments, users can create multiple baskets containing multiple tokenized assets. In certain embodiments, users can create multiple baskets containing multiple tokenized assets to manage and organize tokenized assets. The tokenized assets may include securities, commodities, decentralized finance tokens, real estate, or non-fungible tokens. The basket with the most value or the best performing basket whose value increases over time can be chosen as the master basket. A higher percentage of coin value can be derived from the master basket compared to other tokenized assets owned by the network participant, thereby gamifying coin value of the user and preventing the dis-incentivization of tokenization of nonperforming assets.
[0037] Users can optimize their coin value by creating a smart contract for managing the tokens in the master basket. AI/ML-based algorithms and algorithmic trading algorithms can be created and connected with the smart contract managing the master basket, which can exchange tokenized assets in the master basket with tokenized assets in the decentralized exchange.
[0038] The coin value is derived from tokenized securities, commodities, active DeFi tokens, tokenized real estate, and completing tasks in DAOs of mined loans. Network participants apply to complete tasks in DAOs of mined loans and receive rewards in the form of increased coin value and minted coins.
[0039] The amount generated during the life cycle of the token from smart contract inception to smart contract execution will be transferred to the user, and newly created tokens (i.e., DeFi tokens) will be burned, and users' coins will be minted.
[0040] The coin number corresponds to the number of coins minted in the denomination of coin value upon depositing/receiving money in the user's wallet. Users' coins will be backed by the fiat currency of the country to which the user belongs.
[0041] Network participants may take loans from financial institutions, such as other banks or ArQ Bank, and have these loans mined on the ArQ Blockchain Network to create fixed income decentralized autonomous organizations (DAOs). The loans are mined on the ArQ Blockchain Network, which facilitates the creation of fixed income DAOs. The network participants can take loans from other banks or ArQ Bank and have their loans mined on the ArQ Blockchain Network. This process is illustrated in Figure 9, which shows the mining of loans on the ArQ Blockchain Network.
[0042] The loans taken by network participants are managed on the blockchain network, which ensures transparency and security. The ArQ Blockchain Network plays a role in this process by enabling the mining of loans and the creation of fixed income DAOs. The network participants benefit from the blockchain's decentralized nature, which provides a secure and efficient way to manage loans.
[0043] The loans are mined on the blockchain network to create fixed income DAOs, which are decentralized autonomous organizations that generate fixed income products. These DAOs are created by mining the loans on the blockchain network, ensuring that the capital allocation, loan details, such as interest rate payments, collateral, and duration of the loan, are securely recorded and managed. The smart contract generated for the loan contains these details and is broadcast to ArQ Bank for validation, allowing the DAOs to go live on the blockchain.
[0044] Network participants can secure their interest rate payments of loans taken to buy products or services of mined loan 1 by having another loan mined using the products and services created by the previous loan as raw material for creation of products and services of mined loan 2 which can be bought by network participants and can be used to generate fixed income return from mined loan 2. This process ensures that the interest rate payments are secured using DAO token from the next loans, leading to non-speculative value creation and increased network activity, providing a secure way to manage loan repayments and create additional value within the network.
[0045] Thus, the process of taking loans from financial institutions by network participants and having the loans mined on a blockchain network to create fixed income DAOs involves multiple steps. The ArQ Blockchain Network, ArQ Bank, and other banks play a role in facilitating this process, ensuring that the loans are securely mined and managed on the blockchain network. The network participants benefit from the transparency and security provided by the blockchain, while the creation of fixed income DAOs generates additional value within the financial ecosystem.
[0046] In different embodiments, the process of securing interest rate payments of loans and having another loan mined using products and services created by a previous loan as raw material for creation of products and services of next loan mined involves several key steps. The entities involved include network participants and products and services created by the previous loan.
[0047] Network participants can secure their interest rate payments of loans taken to buy products or services of mined loan 1 by dao token of next loan mined by having another loan mined using the products and services created by the previous loan as raw material for creation of products and services of next loan mined. This process ensures that the interest rate payments are secured and enables further loan creation using the outputs of the previous loan. The network participants play a role in this process by actively managing their loans and utilizing the products and services generated from previous loans to next loans.
[0048] The technical details associated with these steps are as follows:
[0049] Network Participants:
a) securing, by the network participants, interest rate payments of the loans by dao tokens of next loans and having another loan mined using products and services created by a previous loan as raw material for creation of products and services of next loan which can be bought by network participants.
b) to allow network participants to secure interest rate payments of previous loan mined using dao tokens of next loan mined by using products and services created by previous loan mined as raw material for creation of products and services of the next loan mined.
c) This process not only ensures the repayment of interest but also facilitates the creation of new loans, thereby promoting non-speculative value creation and increased network activity. The products and services created by the previous loan serve as a valuable asset that can be leveraged to secure further financial transactions, ensuring the sustainability and growth of the blockchain-based financial ecosystem.
[0050] Network participants apply to complete tasks in the DAOs of the mined loans and receive rewards in the form of increased coin value and minted coins. The coin value is derived from tokenized securities, commodities, active DeFi tokens, tokenized real estate, and completing tasks in DAOs of mined loans. Network participants apply to complete tasks, and upon completion and validation, they receive rewards in the form of increased coin value and minted coins.
[0051] Users can optimize their coin value by creating a smart contract for managing the tokens in the master basket. The coin value is derived from tokenized securities, commodities, active DeFi tokens, tokenized real estate, and completing tasks in DAOs of mined loans. AI/ML-based algorithms and algorithmic trading algorithms can be created and connected with the smart contract managing the master basket, which can exchange tokenized assets in the master basket with tokenized assets in the decentralized exchange.
[0052] The amount generated during the life cycle of the token from smart contract inception to smart contract execution will be transferred to the user, and newly created tokens (i.e., DeFi tokens) will be burned, and users' coins will be minted. The coin number corresponds to the number of coins minted in the denomination of coin value upon depositing/receiving money in the user's wallet. Users' coins will be backed by the fiat currency of the country to which the user belongs.
[0053] Network participants may take loans from financial institutions, such as other banks or ArQ Bank, and have these loans mined on the ArQ Blockchain Network to create fixed income decentralized autonomous organizations (DAOs). The loans are mined on the ArQ Blockchain Network, which facilitates the creation of fixed income DAOs. The network participants can take loans from other banks or ArQ Bank and have their loans mined on the ArQ Blockchain Network.
[0054] The loans taken by network participants are managed on the blockchain network, which ensures transparency and security. The ArQ Blockchain Network plays a role in this process by enabling the mining of loans and the creation of fixed income DAOs. The network participants benefit from the blockchain's decentralized nature, which provides a secure and efficient way to manage loans.
[0055] The loans are mined on the blockchain network to create fixed income DAOs, which are decentralized autonomous organizations that generate fixed income products. These DAOs are created by mining the loans on the blockchain network, ensuring that the loan details, such as capital allocation for creation and distribution of products and services, interest rate payments, collateral, and duration of the loan, are securely recorded and managed. The smart contract generated for the mined loan contains these details and is broadcast to ArQ Bank for validation, allowing the DAOs to go live on the blockchain.
[0056] Network participants can secure their interest rate payments of loans taken to buy products or services of mined loan 1 by DAO tokens of next mined loan by having another loan mined using the products and services created by the previous loan as raw material for creation of products of services of mined loan 2 which can be bought by network participants. This process ensures that the interest rate payments are secured using dao token of next mined loan, leading to non-speculative value creation and increased network activity. The products and services created by the previous loan serve as raw material which can be used for creation of products and services of the next mined loan, providing a secure way to manage loan repayments and create additional value within the network.
[0057] In short, the process of taking loans from financial institutions by network participants and having the loans mined on a blockchain network to create fixed income DAOs involves multiple steps. The ArQ Blockchain Network, ArQ Bank, and other banks play a role in facilitating this process, ensuring that the loans are securely mined and managed on the blockchain network. The network participants benefit from the transparency and security provided by the blockchain, while the creation of fixed income DAOs generates additional value within the financial ecosystem.
[0058] Figure 1 illustrates a block diagram depicting a system (100) for processing a blockchain network, in accordance with an embodiment of the present subject matter.
[0059] A system for processing a blockchain network (hereinafter referred to as “system”) (100) includes a user device (102), a network (110) a processing engine (112), and a database (126).
[0060] Although the present disclosure is explained considering that the system (100) is implemented on a variety of computing systems, such as a laptop computer, a desktop computer, a notebook, a workstation, a mainframe computer, a server, a network server, a cloud-based computing environment and the like. It will be understood that the system (100) may be accessed by multiple users through one or more user devices (102). In one implementation, the system (100) may comprise the cloud-based computing environment in which a user, interchangeably may referred to as a digital wallet user, an owner, a sender, or a receiver, may operate individual system (100) configured to execute remotely located applications. Examples of the user devices (102) may include, but are not limited to, a portable computer, a personal digital assistant, a handheld device, and a workstation. The user device (102) is communicatively coupled to the processing engine (112) through a network (110). The network (110) is a blockchain network.
[0061] In one implementation, the network (110) may be a wireless network, a wired network, or a combination thereof. The network (110) can be implemented as one of the different types of networks, such as intranet, local area network (LAN), wide area network (WAN), the internet. The network (110) may either be a dedicated network or a shared network. The shared network represents an association of the different types of networks that use a variety of protocols, for example, Hypertext Transfer Protocol (HTTP), Transmission Control Protocol/Internet Protocol (TCP/IP), Wireless Application Protocol (WAP), and the like, to communicate with one another. Further, the network (110) may include a variety of network devices, including routers, bridges, servers, computing devices, storage devices, and the like.
[0062] In an embodiment, each user device (102) is associated with a respective user. The user device (102) may include a memory (104), a processor (106) and a digital wallet unit (108).
[0063] The memory (104) may include any computer-readable medium or computer program product known in the art including, for example, volatile memory, such as static random-access memory (SRAM) and dynamic random-access memory (DRAM), and/or non- volatile memory, such as read only memory (ROM), erasable programmable ROM, flash memories, hard disks, optical disks, and magnetic tapes. The memory (104) may include or be communicatively coupled to modules. In one implementation, the module (108) may include programs or coded instructions that supplement applications and functions of the user device (102).
[0064] The processor (106) may be implemented as one or more microprocessors, microcomputers, microcontrollers, digital signal processors, central processing units, state machines, logic circuitries, and/or any devices that manipulate signals based on operational instructions. Among other capabilities, the processor (106) is configured to fetch and execute computer-readable instructions stored in the memory (104).
[0065] In an exemplary embodiment, users can initiate transactions with another user by using the associated user device (102) using the digital wallet. In an exemplary embodiment, the user has to register himself by using the associated user device (102) to access the system (100), by providing personal details. The personal details may include, but are not limited to, name, contact number, address, digital signature, personal unique identification codes, and proof of nationality for AML/KYC purposes. The user details are stored on a server (not shown in a figure) and/or the blockchain network.
[0066] The digital wallet unit (108) may be configured to initiate and store the transaction and create a digital wallet for the user. In an embodiment, the digital wallet unit (108) may be configured to store the Self- Sovereign Digital Currency i.e. Coins of the user. In another embodiment, each user device (102) has its own digital wallet unit (108). In one embodiment, the system (100) uses a blockchain network which is a permissioned blockchain network, where each user maintains his own ledger consisting of his, but are not limited to, transactions, coins, tokens and smart contracts. In an embodiment, the user may be a participant of the system (100). The ledger is stored in the created wallet. It is an evolution of the blockchain networks which is privacy preserving and inclusive of central banks, commercial banks, retails banks, financial institutions, multi-national organisations, small and medium enterprises, and retail user. It will be powered by enterprise grade smart contracts for organisations and financial institutions and designed for tokenisation of real-world assets and institutional adoption of decentralized finance and decentralized autonomous organisations.
[0067] The processing engine (112) further includes a registration module (114), a tokenization module (116), a value generation module (118), a burn and mint module (120), a Basket creation module (122), and a smart contract generation module (124).
[0068] The registration module (114) may be configured to receive inputs from a user and register the user to access the system (100). The registration module (114) may be configured to provide user credentials to the registered user. In an embodiment, inputs may include, but are not limited to, name, contact number, address, digital signature, personal unique identification codes, and proof of nationality for AML/KYC purposes. In an exemplary embodiment, the personal unique identification codes include, but are not limited to, Adhaar identification number, passport identification number, and PAN Card identification number and verified national identity documents corresponding to the nationality of the user . In this, no user can be anonymous here. In an embodiment, after registration, the user has to provide details of its associated assets to the system (100) so that the users associated assets can be tokenized. In one embodiment, the assets include, but are not limited to, securities, real-estate and commodities. These assets are further stored in the centralized database (126) for future use. In an exemplary embodiment, the database (126) includes the assets details of a plurality of users who registered in the system (100).
[0069] The tokenization module (116) may be configured to cooperate with the database (126) and the registration module (114) to receive the details of the registered user. The tokenization module (114) may be configured to identify the assets of the user in the database (126) and generate a token for each asset. This generated token may further be stored in the database and/or users local ledger/blockchain (126).
[0070] The value generation module (118) may be configured to cooperate with the tokenization module (114) to issue the generated token for each asset of the user. The value generation module (118) may be configured to generate the value of each self-sovereign digital currency. In an embodiment, the value generation module (118) may be configured to generate a coin value for each user depending upon the tokens which is stored in the centralized database called ArQ Bank. (126). In an embodiment, each user's coin can be volatile and stable at the same time as coins value of each user is derived from his assets and performance and backed by fiat currency.
[0071] The burn and mint module (120) may be configured to cooperate with the value generation module (118) to transfer and receive value leading to burning and minting of coins. The burn and mint module (120) may be configured to mint and burn the coin associated with the user in his own wallet, which is reflected in the Centralized database i.e ArQ Bank and users local ledger which keeps a record of transactions. In an embodiment, the system(100) may be configured to create a self-sovereign digital currency for every individual user. The reason for calling the currency self-sovereign is because everyone will own their own currency which will be minted and burnt in their own wallet only by using the burn and mint module (120). The currency is neither transferable nor traded. Moreover, the currency will be backed by the fiat currency corresponding to the user’s nationality. In an embodiment, the self-sovereign digital currency is in the form of coins.
[0072] The Basket creation module (122) may be configured to create one or more baskets to put a group of tokenized assets in the baskets. In an embodiment, the Basket creation module (122) may be configured to create different groups of tokenized assets and put each group into a basket. By using this, the user may choose the best performing basket among all the baskets that is to be considered as a master basket. The master basket will be used to derive a higher percentage of coin value for the user’s self-sovereign digital currency. This can be done to prevent dis-incentivization of tokenization of non-performing assets. In another embodiment, each user’s coin may have a different value.
[0073] The contract generation module (124) may be configured to generate a smart contract for organizations and financial institutions and retail users designed for tokenization of real-world assets and institutional adoption of decentralized finance, decentralized autonomous organizations and other blockchain based applications called decentralized applications. These contracts are smart contracts. In an embodiment, the running of a robust blockchain platform is incomplete without the incorporation of smart contracts. Smart contracts are basically a component that allow for a blockchain platform to automatically execute agreements without any third-party involvement. They are simply programs stored in a blockchain that run by using hardware when certain predetermined conditions are met. In an exemplary embodiment, the system (100) may be configured to automate transactions (in terms of tokens and coins), incorporate financial products like bonds, loans as well as structured DAO’s created by mining Loans that allow the users/participants to earn money by minting their coins which are verifiable.
[0074] In an embodiment, the system (100) uses a blockchain network where each user/participant maintains his own ledger consisting of his transactions, each user (for example, Alice, Bob, IBM, as shown in Figure 2) has his own coin. It is an evolution of the blockchain networks which is privacy preserving and inclusive of central banks, commercial banks, retails banks, financial institutions, multi-national organizations, small and medium enterprises, and retail user. It will be powered by enterprise grade smart contracts for organizations and financial institutions and designed for tokenization of real-world assets and institutional adoption of decentralized finance, decentralized autonomous organizations and other blockchain based applications called decentralized applications.
[0075] In an embodiment, the self- sovereign digital currency is a type of currency which can only be burned and minted, not transferred. Each user has their own coin whose value will come from assets, investments, savings and will be backed by fiat currency of user’s nationality. The self-sovereign digital currency incentivizes tokenization of real-world assets and incentivizes regulated financial institutions to give products and services in a tokenized form. The self-sovereign digital currency also provides gamification of a token economic model for user retention and long-term value creation.
[0076] Hyper localization of volatility: In an embodiment, each user's coin can be volatile and stable at the same time as coins value of each user is derived from their tokenized financial assets and performance in completion of tasks in DAO’s of mined loans and backed by fiat currency. Each user's coin is not transferable. Only value accrued in these coins is transferred and coins are burned and minted.
[0077] Coin Value = Financial Health: As the coin value is derived from the user's tokenized asset, investments, participation in Decentralized Autonomous Organizations (DAOs) of mined loans. In this, the users can be incentivized to better their financial health by giving them a chance to increase the coin value by buying better assets, investments, repayment of loans on time and by participating in Decentralized Autonomous Organizations (DAOs) of mined loans where each coin value represents total tokenized assets.
[0078] Payment in User Denominated Currency: Each User's coin will be backed by the national currency. Therefore, seamless cross border transactions are possible as the sender’s currency gets burned and receiver's currency gets minted leading to seamless cross border payments.
[0079] In an exemplary embodiment, suppose Alice is a user who wants to use the system (100). Firstly, Alice has to register herself with her identity proofs like Adhaar ID, Passport ID, and PAN Card and verified national identity documents of user’s nationality. So, no user can be anonymous here.
[0080] Now, Alice owns a local ledger where her transaction history is stored. She can also create different baskets by grouping different assets. She can choose her favorite basket of all baskets that she created to be considered as the master basket. The master basket will be used to derive a certain percentage of coin value for Alice’s self-sovereign digital currency. In one embodiment, each user’s coin will have a different value.
[0081] Alice then deposits an amount of her fiat currency into her wallet. For example, suppose Alice is Indian and wants to deposit INR 5000 (referring to Figure 4A). Now, the deposit amount and her coin value together will derive the number of coins that Alice owns. The derivation is: Coin Number = Deposit Amount/Coin Value; where, the mentioned quantities are defined in the following way, Coin Number: The number of fiat backed coins/SSDC owned by the user.
Deposit Amount: The amount of fiat currency deposited by the user in her wallet. Coin Value: The value of each fiat backed self-sovereign digital currency owned by the user. This value is derived from multiple factors such as total tokenized assets, total defi products, participation in DAO’s of mined loans & the master basket of user.
[0082] Figure 4 illustrates a schematic diagram (400) depicting coin values during transaction, in accordance with an exemplary embodiment of the present subject matter.
[0083] In Figure 4, suppose there are two users, Alice and Bob. Alice has a coin value of 200 and 110 coins before making transaction to the Bob, who has a coin value of 300 and 50 coins. Alice has made a transaction of INR 2000 and sent to Bob. In this case, after the transaction, 10 coins of Alice are burned and 6.67 coins of Bob are minted. So, after the transaction, the Bob coin’s value is 300 and has 56.67 coins whereas Alice coin’s value is 200 and has 100 coins. Here, the deposit amount and the coin values together will derive the number of coins that Bob owns.
[0084] In an embodiment, referring to Fig. 5A, a coin value of the user will come from multiple factors, which include, but are not limited to:
a) Master Basket: A basket in which a user can put his best performing tokenized assets. A higher percentage of his coin value will come from the master basket as compared to other tokenized assets owned by the user. The user can create different groups of assets and put each group into a basket. The user has to then choose his master basket (preferably highest estimated value) among all the baskets. Figure5A gives an overview of a user’s normal and master baskets. The master basket would be considered to generate a new token by integrating small portions of each token/asset in that basket. Users can optimize their Coin value by creating a smart contract for managing the tokens in the master basket. AI/ML based algorithms and algorithmic trading algorithms can be created and connected with smart contract managing the Master basket which can exchange tokenized assets in the master basket with tokenized assets in the decentralized exchange. Algorithms can decide the amount of capital to invested in securities, commodities, bonds, fixed income products, and other investment products Users can also deposit fiat currency tokens in master basket by burning their coins which can then be used to buy and sell assets from the exchange.
[0085] Tokenized Assets: Users can be incentivized to hold tokenized assets such as securities, commodities, bonds, and the like, by determining their coin value by the performance of the underlying assets. Users can also be incentivized to tokenize their real estate and land and have them on-chain and hold these tokens as it would also increase their coin value.
[0086] Decentralized Finance Products: The coin value can also come from tokenized savings products, investment products, and loans. The users can be incentivized to do loan repayment on time as it would contribute to increase in the coin value, if loan repayment is not done on time, then the coin can be reduced as well as per the conditions mentioned by the financial institution in the smart contract. This way users can be incentivized to avail financial products by regulated institutions on chain.
[0087] DAOs: In this, Users can work in DAO’s of mined Loans and get paid such that their coins are minted. The coin value can also be increased upon completion tasks of DAOs of mined loans to incentivize participation in DAOs of mined loans.
[0088] In another embodiment, the local ledger refers to a specialized component within the blockchain-based system that stores detailed transaction information related to a specific account. The local ledger is maintained on the user's end and is stored in their local user database. The local ledger records and organizes the following transaction details:
• Number of Transactions: The local ledger keeps track of the total number of transactions executed by an account holder. This provides a chronological record of the user's activity on the blockchain network.
• Sender's Public key: For each transaction initiated by the account holder, the local ledger records the of a sender's address or public key. This ensures that the sender's identity and origin are verifiable.
• Receiver's Public key: Similarly, the local ledger records the (i.e., unique identifier) of a recipient's address or public key for every transaction. This information confirms an intended recipient of the transaction.
• Transaction Hash: Each transaction processed on the blockchain network is assigned a unique transaction hash. The local ledger stores these hashes to enable verification and trace ability of individual transactions.
• Timestamp: The local ledger includes a timestamp for each transaction indicating the date and time when the transaction was executed. This establishes a chronological order for the transactions and enables time-based analysis.

[0089] In another embodiment, the local ledger plays a crucial role in maintaining an immutable record of the account holder's transactions. As new transactions occur, they are added to the local ledger, creating a sequential chain of blocks representing the account's transaction history. The local ledger's data structure closely resembles a blockchain containing transaction details. It is essential to note that as the local ledger stores transaction details, it is a user-level representation that provides a convenient and secure way for the account holder to access and review their transaction history.
[0090] In another embodiment, while referring to Figure 8, the present disclosure provides novel proof a network consensus protocol which reconciles the centralized computing system (100) with blockchain based decentralized consensus protocols. This is done to take the benefits of the centralized computing system (100) such as speed of transaction validation thus facilitating instantaneous payments and benefits of blockchain such as decentralized validation of transactions using m/n participants voting of validity of transaction by validators such more than 50% of participants agree on validity of transaction out of all validators. The gist of reconciliation of these two antagonistic technology stacks is done by creating a meta-network of networks of three participants which are the centralized database also known as ArQ Bank (112) keeping a record of all transactions and account balances of network participants , another node is a multiple permissioned peer to peer networks of validators for each fiat currency based shard and another node is a permissioned peer to peer network of the ArQ validators. In another embodiment, the centralized database (110) can immediately check the validity of a transaction and cast a vote within the meta-network of networks, alongside the two blockchain networks .
[0091] In some other embodiment, the computing system (100) may be configured to implement proof of network. Referring to Figure 7 and Figure 8, the implementation of proof of network includes:
• Meta-Network of Networks: The computing system (100) may configure to generate a meta-network of networks. In the meta-network various P-to-P networks and a centralized entity coexist. Each of these entities, including a permissioned network of ArQ validators , a network of multiple fiat currency-based shards (shards is currency based P-To-P network) and the centralized database i.e. ArQ Bank (112) acts as a node within this meta-network. These components work together to validate transactions and achieve consensus.
• Increasing Transactions Per Second (TPS) with low Latency (Parallel Processing): To enhance network performance, the computing system (100) suggests not waiting for the entire network to reach consensus on each transaction for ArQ validator node and the currency-based shards node. Instead, the computing system (100) includes a minimal number of participants required to validate a transaction, reflecting a portion of the entire network. After selecting the validators, an m/n of vote is taken for the transaction and a consensus reached on the transaction . This allows for parallel processing of transactions by sending multiple transactions to multiple validators (202) at once and increases TPS while maintaining decentralization.
• Role of the centralized database (112): The centralized database (112) can immediately check the validity of a transaction and cast a vote within the meta-network of networks, alongside two blockchain networks.
• Voting and Validation: Once the two permissioned networks have reached consensus with the minimal number of participants required for each transaction, the networks can cast a vote within the meta network. If two-thirds of the participants vote in Favor of a transaction's validity, it is considered validated, executed, and added to the centralized database (112) and local ledger.
• Reconciliation of Centralization and Decentralization: The primary goal is to combine the benefits of the centralized computing system (100), such as fast transaction validation, with those of blockchain networks, like decentralized validation. This is achieved by creating a meta-network that includes both the centralized database (112) and decentralized blockchain networks as nodes.

[0092] In an exemplary embodiment, referring to Figure 8, a transaction validation lifecycle in Proof of Network consensus Protocol is described, which includes, but is not limited to:
Transaction Initiation: a smart contract or user would initiate a transaction broadcasting it to the meta networks of the network. The user would enter receiver’s address, amount to be sent which further generates the following transaction information to be broadcasted:
• transaction ID and amount, and public key of receiver and sender
• Digital signature (done by user’s private key)
• Other data: Smart contract information if transaction initiated by smart contract.

[0093] Flow of Proof of network:
1. Transaction initiated by smart contract or network participant.
2. Transaction received by Transaction manager, who checks the format of transaction. If correct it forwards the transaction to ArQ Bank node and Transaction coordinator of Permissioned network of ArQ validators and depending upon the fiat currency used in the smart contract or fiat currency backing the Self-Sovereign Digital currency of user, transaction sent to transaction coordinator of currency specific Permissioned network called currency-based shard and ArQ Bank node of the meta network of networks.
3. Transaction coordinators of the 2 Permissioned networks select the validators in their respective permissioned network who validate the transaction such that minimal number of validators required per p2p network for m/n consensus from each permissioned network.
4. Upon validation by the validators of both permissioned networks transaction coordinator sends message back to transaction manager. ArQ bank node i.e Centralized server node sends message back to transaction manager.
5. Transaction manager receives votes by 3 nodes i.e. ArQ validator node, currency specific shard node, and ArQ bank node of the meta network of networks
6. Upon successful m/n consensus of meta network of networks, transaction manager sends confirmation to ArQ bank node to add transaction to the centralized database and update accounts of network participant sending and receiving the money and to network participants to update local ledger of sender and receiver.
7. Once the transaction is executed, smart contract initiating transaction is updated and sender's coins are burned or token is transferred and receiver receives the money such that their coins are minted or token is received and local ledger is updated.

[0094] Mining loans: Mining Loans is a process of creating a structured Decentralized autonomous organization which generates fixed income returns on loan taken by network participant such that miners selected by ArQ Bank, where ArQ Bank itself can be a miner as well, can run artificial intelligence, machine learning and optimization algorithms for capital allocation and LLM and NLP algorithms for smart contract creation and broad casting it to ArQ Bank which then broadcasts it to network participants who can allocate capital to the smart contract for future delivery of products and services. Capital locked in smart contract of mined loans also includes principal amount and interest rate payments which can be redirected to a smart contract based Special Purpose Vehicle which can further be securitized by regulatory agencies and given a rating by credit rating firms and listed on market as smart contract based collateralized loan obligations.
[0095] Figure 9 illustrates a schematic diagram (900) depicting the steps of creating fixed income DAOs through mining loans on the blockchain, in accordance with an exemplary embodiment of the present subject matter.
[0096] In an embodiment, mining loans on the ArQ blockchain will be done to:
• to create DAO tokens backed by machine generated smart contracts with fixed income returns with payout in the future.
• Mining loans are used to create fixed income DAO’s in which network participants can work and increase their coin value and mint their own coins.
• To lock in principal amount and interest rate payments in a smart contract which can be redirected to a smart contract based Special Purpose Vehicle which can then be securitized and used for creation of smart contract based collateralized loan obligations. This process of mining loans cancels out human intervention in the life cycle of reimbursement of capital taken from loan amount and interest rate payments thereby cancelling chance of defaulting on principal amount and interest rate payments.

[0097] In an exemplary embodiment, the system (100) defines a Value Based Computation on the blockchain through Mining loans by creating structured DAOs. This includes optimizing capital allocation by running AI/ML and other optimization algorithms for capital allocation of loan taken and defining terms and conditions for Structured DAO, pricing the solutions offered by structured DOA’s ,creating a machine-generated smart contract using Large Language Models and Natural Language Processing algorithms for smart contract creation according to optimized conditions, database search by ArQ bank for optimal distribution of products and services to network participants with highest probability of availing the products and services and least probability of default on loans taken to avail the products and services, leading to creation of smart contract based fixed income collateralized loan obligation.
[0098] In an embodiment, In the loan mining scheme, tokens are created which are backed by machine generated smart contracts (MGSCs) with the highest guarantee exit value with payout in the future. Then, MGSCs are used to create fixed income structured DAO’s. In loan mining, capital allocation and terms and conditions for optimal distribution of capital in Structured DAO will be tackled by efficient AI/ML algorithms and optimization algorithms and LLM and NLP algorithms for smart contract creation.
[0099] In an embodiment, the mining schemes will be heavily based on machine learning algorithms as these algorithms can be powerful tools for optimizing capital allocation within a Structured DAO. They can analyze complex data, identify patterns, and make informed decisions based on historical and real-time information. The choice of machine learning algorithms for capital allocation in a Structured DAO depends on the specific characteristics of the data and the objectives of the distribution mechanism. For example, Linear Regression (LG) & other AI/ML algorithms can be used for allocating the efficient amount to the events/tasks based on loan mining schemes where the capital allocation is done temporally with some efficient ordering scheme. Reinforcement Learning (RL)/ Neural Networks (NN) algorithms and other optimization algorithms can also be utilized in the mining loans as these algorithms provide the capital allocation strategy needs to adapt over time based on rewards and penalties. This approach could be particularly useful if the DAOs objectives change dynamically. Depending upon the objectives some other AI/ML algorithms will be utilized such as Gradient Boosting Algorithms (XG Boost, Light GBM, Cat Boost), Clustering Algorithms (K-Means, DBSCAN), Regression with Time Series Analysis, and Bayesian Optimization, LSTMs and other AI/ML algorithms.
[00100] In an embodiment, as mentioned above, In the loan mining scheme, the capital allocation is done temporally with some efficient ordering scheme. So, it can be mapped into the job scheduling problems which involve assigning tasks to resources over time while optimizing criteria.
[00101] In an embodiment, the database search by ArQ Bank of network participants most likely to avail the products and services created by mined loan and least probability of default on loan taken to commit capital to smart contract to avail broadcasted products and services. Certainly, there are algorithms that can be utilized in database search problems, depending on the nature of the problem and the computational resources available.
[00102] In an embodiment, the contract generation module (124) of the system (100) generates auto generation of smart contracts, which is machine-generated smart contracts that interpret contract requirements and generate code accordingly. These contracts are then deployed on a blockchain platform, where they execute and enforce their predefined rules in a secure and transparent manner. Human oversight and review are essential to ensure the accuracy, security, and effectiveness of these machine-generated contracts. Machine learning algorithms such as Recurrent neural networks, Convolutional neural networks and other advanced LLM and Natural language processing models can be used for creating functional smart contracts from conditions or inputs given by the optimized capital allocation by mining loans. Advanced tools can use LLM and NLP techniques to interpret natural language descriptions of contracts and convert them into code. This involves understanding the intent behind the contract and translating it into executable code. The generated code includes the logic and conditions specified in the contract requirements. This logic can range from simple if then conditions to complex calculations and interactions with other contracts. It's important to ensure that the generated code is accurate and enforces the intended rules.
[00103] In an embodiment, the machine generated smart contracts are created according to the terms set by optimization algorithms utilizing Machine learning/ Deep learning, statistical analysis tools to generate optimal Fixed income value. These algorithms can be used to optimize resource allocation, task allocation, incentivization strategies, value creation. In the blockchain network, miners will be incentivized by a fee based model such that upon transfer of value their Self-Sovereign digital currency i.e their coins get minted for mining loans and to run algorithms on their CPU, GPU which create MGSC's for creating tokens backed by fixed income Structured DAO’s with fixed income and non-speculative exit value.
[00104] In an embodiment, companies or entities can be incentivized for having their loans mined on ArQ blockchain network by creating fixed income DAOs through mining their loans on the blockchain. ArQ Bank can charge a certain interest rate for loans, if an entity takes loan and creates a fixed income DAO by having their loan mined then less interest rate can be charged, as the loan is now deployed to create smart contract based non-speculative fixed income product , thereby reducing risk to bank. Products or services offered by entity after having their loan mined are availed by network participants and capital locked in smart contract which is released to the entity on delivery of product or service as per conditions of smart contract.
[00105] Again referring to Figure 9 for providing further clarification on the steps of mining loans. Borrower may specify the sector and real world geography for the loan to be taken and mined. Borrowers can provide data related to their business and products and services offered by the borrower. The borrower takes a loan from ArQ Bank or any other Bank and chooses to get it mined on ArQ Blockchain Network. ArQ Bank selects miners to mine loans, such that ArQ Bank itself can be a miner as well on ArQ Blockchain network. Further, loan gets mined by the miner by running AI/ML and optimization algorithms for capital allocations and LLM and NLP algorithms for smart contract generation.
[00106] Miners creating optimized smart contract from the loan mined broadcast the smart contract to ArQ Bank who then broadcasts it to potential users of product. Potential users' of the product can accept the proposal and commit an amount to the smart contract to receive delivery of product in future. Money can only be received by borrower of mined loan from the smart contract upon validation of receiving the product by potential user of product. This can be done to avoid credit risk.
[00107] Mined Loan gets validated and can go live on the network and capital can be deployed as per the instructions of the smart Contract of the mined loan. Miners get paid their fees such that their Self sovereign digital currency gets minted.
[00108] DAO Token given to the borrower which contains Token contract containing details regarding amount of capital invested and expected returns, interest rate payments and date of maturity (burning of Dao token for minting of the coins of Dao token holder).
[00109] After structured DAO goes live, Network participant working in the DAO, receive money upon validation by DAO managers (DAO voting token holder) such that their coins get minted. Network participants can be incentivized to work in DAO’s by increasing their coin value. DAO token holders receive money upon burning of DAO token upon completion of goals of the DAO which generate fixed income return.
[00110] In summary, using CPU's, GPU's, available in the network to run optimization algorithms, trend forecasting algorithms to create causally structured DAO’s. Miners which are selected by ArQ Bank, where ArQ Bank itself can be a miner as well create solutions for capital allocation for tasks that lead to product or service development. Miners then use algorithms to price the products and services according to the future date of delivery of the product and service given by structured DOA's. Miners then use algorithms to generate the smart contract according to optimized conditions. Miners then broadcast the solution to ArQ Bank who then searches across database and network who can use the product or service. Smart contract is then broadcast to the entities/network participants. If a network participant accepts the DAO proposal broadcasted by ArQ Bank, then the network participant will have to allocate capital to smart contract to avail the products or services given by the structured DAO of mined loan. After capital has been allocated, the smart contract is then broadcasted to ArQ Bank to validate the completion of the creation of fixed income structured DOA, completion of the miners work and going live of the DAO. Network Participants can perform the tasks mentioned in the structured DAO in order to mint their own coins leading to completion of the objective of the structured DOA and value accrued in the dao tokens is transferred to dao token holder by burning of dao token and minting of self-sovereign digital currency of the dao token holder.
[00111] Figure 10 illustrates a schematic diagram (1000) depicting the steps of creating fixed income DAOs through mining on the blockchain for creation of special purpose vehicles that can be used to create securitized debt instruments i.e. Collateralized loan obligations, in accordance with an exemplary embodiment of the present subject matter.
[00112] Smart Contract for creating special purpose vehicle to distribute and securitize principal amount with interest rate payments of mined loans to create a smart contract based Collateralized Loan Obligation. ArQ Bank creates a Special Purpose Vehicle that contains the cash flows generated by the principal amount and interest rate payments of the mined loans. bank can then issue SPV smart contract tokens to investors as a claim on fixed income payments generated by this smart contract based special purpose vehicle.
[00113] In Figure 10, the following steps are performed:
• Step 1&2: Creating special purpose vehicles (Decentralized Autonomous Organization) for creating a fixed income products.
• Step 3: ArQ Bank creates smart contract based SPV (Special Purpose Vehicle) which contain principal amount and interest rate payments locked in smart contract of mined loan, the bank establishes a Special Purpose Vehicle (SPV). An SPV is a legal entity created for a specific financial purpose, often used to isolate financial risk. In this case, the SPV is created to manage the principal amount and interest rate payment of mined loans.
• Step 4: ArQ Bank creates another SPV with loans taken by network participants who have deployed capital towards DAO smart contract to avail products and services given by structured DAO of mined loan. These loans are then bundled together in SPV which generate monthly receivables. OR bank can create sector specific SPV which contains the principal amount and interest rate payment of multiple mined loan and principal amount and interest rate payment of loans taken by network participants to buy product or service created by multiple mined loan.
• Step 5: Bank gets a rating on the SPV’s from credit rating agencies and securitizes it from regulatory agencies of jurisdiction of mined loan. the Bank's SPV’s, which holds the assets represented by the interest rate payments of mined loans locked in the smart contract of mined loan, and the SPV which holds the principal amount and interest rate payment of loans taken by network participants to avail products or services given by structured DAO or Sector specific SPV which contains the interest rate payments of multiple mined loans locked in the smart contract and principal amount and interest rate payment loans taken by network participants to buy products and services created by multiple mined loans is assessed and securitized by regulated financial entities such as SEBI and RBI in India. Credit rating agencies rate the securitized debt instruments i.e Collateralized Loan obligation. Once the SPV receives a favourable rating, the bank can securitize the assets. This means that the assets are packaged into securities, which can then be sold to investors. For tokenized sale of this financial instrument it can be sold on the ArQ blockchain network in the form of Spv tokens.
• Step 6: Listed on the market- The securitized assets (securities) are listed on a market, such as a stock exchange or a trading platform. This allows investors to buy and sell these securities in a regulated marketplace.
• Step 7: Bank issues SPV tokens to investors as a claim to fixed income payments- Investors purchase the securitized assets by buying tokens issued by the SPV. These tokens represent ownership in the underlying assets and act as a claim to the fixed income payments that will be generated from the assets.
• Step 8: SPV receives money on the maturity of underlying securities- The underlying assets held by the SPV mature over time, generating income. For example, the SPV would receive interest payments and principal repayments from those mined loans as they mature.
• Step 9: Money distributed in tranches- The income generated from the underlying assets is distributed in tranches or portions. This could be in the form of periodic interest payments or other agreed-upon distribution methods.
• Step 10: Investors get paid, and their coins get minted- Investors receive their share of the income generated by the SPV's assets based on the number of tokens they hold. As they receive payments, coins are minted.
[00114] Products created after each loan gets mined:
• DAO Tokens of a mined loan contain the payment to the borrower of the loan which gets burned and generates non speculative return such that the DAO token holders coins get minted upon completion of the contract or delivery of product or service to the network participants.
• SPV1 token of each mined loan contains the interest rate payments of each mined loan creating products or services on the network.
• SPV 2 token of each loan mined contains interest rate payments of loans taken by network participants to buy product or service created by a mined loan.
• Products and service created after completion of task in each mined loan
[00115] Scaling Mining of Loans: Referring to Figure 12 and 13, Network Participants can secure their interest rate payments of loan taken to buy products or services of mined loan 1 by having another loan mined using the products and services created by the previous loan as raw material for the creation of products and services of next loan to be mined leading to creation of products and services by mined loan 2 that can be bought by network participant which leads to generation of non-speculative value creation and increasing affordability of network participants to purchase good and services created on the network thereby increasing network activity.
[00116] Products and service created by mined loan 1 can be used as raw material for mined loan 2 which can be used to create products and services by mined loan 2 that can be bought by network participants which leads to generation of non-speculative return by broadcasting the smart contract of mined loan 2 to network participants who can allocate and lock in capital to buy products and services created by mined loan 2.
[00117] These can be either sector specific loans or multi-sector loans that can be mined on top of previous loan depending upon the interest rate of the sector in which the loan is to be mined such that preference should be given to higher interest rate sectors, higher rate of non-speculative return of the DAO tokens created by the next mined loan and the Scalability factor of the next loan to be mined in the chain of these connected loans. Scalability factor refers to probability of the number of loans that can be mined next using the goods and services of the previous loan as raw material for the creation of products and services created by next loan to be mined.
[00118] ArQ Bank can issue loans to network participants to buy products and services created by mined loans on the ArQ Blockchain Network such that network participants can be incentivized by reducing the interest rate on the loan if network participant will have another loan mined using their products and services as raw materials for the creation of products and services of next Loan to be mined which can be bought by network participants. This will lead to securing or insuring the interest rate payment of the loan taken to buy to products or services by the DAO tokens created by the next Loan to be mined.
[00119] Thus SPV 2 tokens created by packaging the interest rate payments of the mined Loan 1 taken by network participants to buy the products and services can be secured by DAO Token of mined loan 2. ArQ Bank can create a smart Contract to pay the monthly principal amount and interest rate payments of mined loan 1 taken by network participant to buy product and services created by a mined loan , using the DAO token of Mined loan 2 as compensation for the all the monthly interest rate payments paid by ArQ Bank on Behalf of Network Participant. This smart contract created by ArQ bank which pays monthly interest rate and principal amount of Mined loan 1 of network Participant which is secured by DAO Token of mined loan 2 is used to Compensate ArQ bank for paying interest rate payments on Behalf of Network participant. These interest rate payments by ArQ bank can be used to create Collateralized Loan Obligations.
[00120] Tranches in these CLO’s can be ordered in such that Network participants who have just taken a loan to buy products and services created by a mined loan without having it mined and which is backed by a collateral can be put into the Equity tranche or debt tranche depending on the credit score of the network participant and risk of defaulting on the loan as they offer higher interest rate payments and are more likely to default, these are paid last. The Debt or the Mezzanine Tranche can contain Interest Payments of Mined Loans paid by ArQ Bank on behalf of Network Participants which is secured by DAO Token of Mined Loan 2 to compensate ArQ Bank as Payment. As this tranche offers lower interest rate returns which are locked in a smart contract these get paid first as they are most secure leading to creation of robust fixed income products that give equity like returns.
[00121] In another embodiment, another aspect relating to dynamic interest rate changes of interest rate for sector and geography specific minable loans for stimulating network economics has been described. In this aspect, Incentivizing miners to mine loans of underperforming sectors and geographies by decreasing interest rate of the loan to be mined and increasing fees of the miners. Dynamic interest rate changes :For incentivizing miners to mine loans of underperforming sectors and geographies by reducing interest rate of loans to mined of underperforming sectors and geographies thereby increasing job creation and increasing productions of goods and services in underperforming sectors and geographies.
[00122] INTRA CONTRACT Width: execution and functioning Contracts for mined loans can be analyzed by statistical analysis tools, and other AI/ML algorithms for performance of mined loans and defaulting of contracts in terms of failure of completion of tasks and thereby leading to defaulting on delivering and producing goods and services and thereby defaulting on creation of fixed income products on ArQ Blockchain. To avoid this contract of mined loans can be created such that multiple path ways for cash flows at each step of the contract can be encoded in the contract such that cash flows generating fixed income products can be secured and can be used to hedge certain risks caused by network volatility and real-world asset volatility. This indicator will give sector specific probability of creating multiple pathways for cash flows to hedge or insure products and services created by mined loans and fixed income securities created by mining of loans. This indicator can give an idea of the volatility of the network thereby helping miners to calculate computational complexity of mining a loan.
[00123] A normal Mined Loan will contain one task for each step which will lead to the next task thereby generating fixed income return to the DAO token holders and will lead to creation of less volatile fixed income securities when the interest rate payments are packaged and sold as tokenized securitized debt instruments i.e. Collateralized loan obligations.
[00124] Referring to Figure 13, increasing Intra contract width of a Mined Loan i.e. Number of task at each step of the contract leading to multiple further sub tasks branching from these tasks at each step of the contract for generation of fixed income returns in terms of compensation to DAO token holder with probability of return within a fixed range depending on the execution of the contract in real time as per the conditions mentioned in the contract, and securing interest rate payments of the mined loan which are packaged in an SPV and sold as Tokenized securitized debt instruments i.e. Collateralized Loan obligations.
[00125] Scalability Factor of Minable Loans: As disclosed above, this indicator can give a sector specific probability of number of loans that can be mined using the products and services created by previous mined loan as raw material to create products and services of the next mined loan such that each loan gets mined after the completion of the previous loan with fixed interest rate with the goods and services created by the previous loan are used as starting materials to create products and services of the next loan mined which can be bought by network participants that leads to generation of fixed income return and generate long term fixed income securities which can give equity like returns leading to creation of collateralized loan obligations
[00126] Tokenized Real World Assets Volatility Indicator: Volatility created on network economics characterized by rapid rise or fall in the value of Self-sovereign Digital currencies of network participants which are backed by jurisdiction specific fiat currencies and whose value is derived by tokenized real world assets which may be volatile such as stocks, commodities, bonds, credit derivatives, interest rate derivatives, cryptocurrencies and speculative financial products influenced by interest rate changes of Central banks and other derivatives products owned by the network participant. Also, price volatility created by rise in difference between supply and demand of tokenized fixed income products created by mining loans and defaulting of fixed income returns created by mined loans i.e. dao tokens, interest rate payments of loans mined (spv1 tokens) and interest rate payments of loans taken by network participants to buy products or services created loans mined (spv2 tokens) caused by front running and price slippage by intended or unintended consequences of actions by adversarial network participants
[00127] This can be mitigated by creation of each network participant liquidity pool which contains networks participants Self Sovereign Digital Currency, savings tokens, stablecoins, tokenized commercial banks deposits and fixed other income tokens such as dao tokens, spv1 tokens and spv2 tokens. Consequently, creating a Global Liquidity pool which contains liquidity in form of tokenized fiat currencies backed by central banks, tokenized commercial banks deposits and other over collateralized financial instruments with minimal likelihood of default and other sector specific and geography specific financial products created by mined loans such as Dao tokens, Spv1 tokens and spv2 tokens.
[00128] AI Agents managing users liquidity pool can trade with the global liquidity pool which coordinates with sector specific and geography specific smaller liquidity pools to maintain liquidity. If volatility of real-world assets increases it can be compensated by increasing the trading factor between the AI agents and the global liquidity pool and vice versa to stabiles network economics.
[00129] Stacking of DOA Tokens for Perpetual Mining of Loans: Stacking of DAO tokens of mined loan means Perpetually mining loans by staking the dao tokens from previous mined loan to buy products and services of the previous loan which can then be used for the next loan to be mined to generate fixed income returns by using the products and services of the previous loan to create product and service of next mined loan that can be bought by network participant to generate fixed income return from the next loan mined. Staking of Dao tokens can be incentivized by a step by step increase in the principal amount or value of loan offered and decreasing the interest rate of the next loan mined .
[00130] Network participants use the dao token created by mined loan 1 to buy the product and service of mined loan 1. Products and services bought by staking of dao token of mined loan 1 can be used as raw material for the next loan mined such that product and service created by mined loan 1 can be used for the next loan mined to create product or service that can be bought by network participant that generate fixed income return leading to minting of future dao token. DAO token created by mined loan 2 can then again be burned and used to buy product and service created by mined loan 2 and used as raw material for products created form mined loan 3 leading to creation product and service that can be bought by network participant leading to creation of new DAO token and so on.
[00131] Network participants AI agent can perpetually invest in mining loans by managing the liquidity pool of network participant containing Dao tokens created by the mined loans that can be burned and used to buy product and service created by that mined loan which can be used as or raw material for creation of products and services from the next loan to be mined such that it creates products or services that can be bought by network participant which leads to generation of perpetual fixed income non speculative income for the network participant.
[00132] Miners can be incentivized by reducing the interest rate of perpetually minable loans thereby reducing computational complexity of mining loans and reducing costs of mining loans. Network participants can be incentivized for investing in perpetually minable loans by increasing rate of return of their minable loans and decreasing interest rate of mineable loans. Thus, ensuring equity like returns while generating fixed income non speculative returns at the same time.
[00133] Creation Of Index Fund of Mined Loans: An Index fund of tokenized fixed income financial products generated from mining of loans i.e DAO tokens, spv1 tokens, sv2 tokens and can be created for investors looking to invest into a pool of minable loans instead of multiple single minable loans. Index fund of mined loans can be of multiple sector and multiple geographies such that fixed income financial products created by loans mined of specific sectors and specific geographies can be offered to inventors
[00134] Difficulty of Mining depending on Interest rate of loan- Mining of Loans on the blockchain network from capital allocation, smart contract creation to creating fixed income securities is done to create non speculative value in the form of high yield debt products with cash flows locked in a smart contract. Loans such as commercial loans, small and big business loans, infrastructure loans and inventory financing loans and other loans can be mined on the blockchain network. The interest rate of the loans mined on the blockchain network which is locked in a smart contract decides the difficulty of mining a loan. As increased interest rate will lead to use of more computational resources by the miners to run machine learning, deep learning techniques, large language models and other algorithms to create fixed income non speculative return on the minable loan.
[00135] Referring to Figure 14, . Specifically, In Figure 14, commercial banks, retails banks and non-banking financial institutions can offer products and services in a tokenized form such for each product or service offer a new token will be created. Terms of the product or service will be encoded in smart contracts like software and value accrued in the token from smart contract inception to smart contract execution will then be transferred to the digital wallet of the user/organization/financial institutions wallet. user’s can be incentivized to buy defi products from regulated financial entities by increasing their coin value.
[00136] In figure 15, the bank or financial institution creates a smart contract that outlines the terms of the investment term plan, including the investment amount, interest rate, and investment duration. The user decides to participate in the savings product or service offered by the bank through the smart contract. The investment smart contract includes:
[00137] Debiting Funds: The user agrees to the amount they want to save and agrees to the terms outlined in the smart contract. The smart contract automatically debits the specified amount from the user's account by burning users' coins, according to the terms and schedule defined in the contract. This could be a one-time debit or multiple debits over a period of time.
[00138] Token Creation: Once the funds are successfully debited from the user’s wallet, the smart contract generates a token for the user. This token represents the user's claim to the underlying contract and its associated value. The token is unique to the user and is stored on the blockchain.
[00139] Value Generation Period: The smart contract's terms specify awaiting or maturity period during which the user's funds are held, potentially earning interest or some form of value. The smart contract calculates and tracks the value based on the agreed-upon terms.
[00140] Token Value Generation: Over the value generation period, the token's value increases according to the smart contract's predefined rules, which could include interest accrual or other forms of value growth.
[00141] Completion of Term: Once the value generation period is complete, the smart contract reaches its maturity point. The smart contract evaluates the total value generated based on the terms and the user's original deposit.
[00142] Token Burning and Coin Minting: At the end of the term, the smart contract initiates the burning of the token. Burning a token means that it's permanently removed from circulation. Simultaneously, the smart contract mints new coins i.e. Self –Sovereign Digital currency of the network participant based on the value generated during the term and the coin value of the network participant at that time. This could be the initial deposit plus the accrued interest or value in the user’s wallet. This is illustrated in Figure 15.
[00143] Further, the loan based smart contract includes following process:
[00144] Loan Smart contract Creation: The bank or financial institution creates a smart contract that outlines the terms of the loan, including the loan amount, interest rate, and loan duration and collateral. Public Key of Network participant taking the Loan is encoded in smart contract. Also, network participant providing the product or service to whom the loan amount is to be paid is also encoded in the Smart contract.
[00145] Loan Token Creation: Upon agreement, the smart contract generates a loan token specific to the user and loan agreement. The token serves as a representation of the loan contract and its associated terms.
[00146] Burning of Loan Token and minting of Network Participants Coins: For Loans such as Home Loan, Vehicle Loan etc, public key of Network participant providing product or service to network participant taking the loan can also be mentioned in the loan smart contract. Loan token can be transferred to the network participant providing product or service such that amount locked in the loan token is burned and Self-Sovereign Digital currency of Network participant providing product or service is Minted.
[00147] For Loans such as Business Loans and Commercial Loans Loan token is transferred to network participant taking the Loan. Network participant can do payments to other network participant such that amount corresponding to the payment is burned from the loan token and network participant receiving the payment their Coins i.e Self- Sovereign Digital Currency are Minted.
[00148] Interest Deductions: The smart contract is programmed to automatically deduct interest payments from the borrower's wallet or public key at predetermined intervals (monthly, quarterly, etc.). These deductions are based on the interest rate specified in the smart contract.
[00149] Loan Repayment: If the loan is a commercial loan or business loan, the loan token represents a debt obligation and can be traded or sold. As the borrower makes repayments over time, the smart contract tracks the paid amounts, deducting both the principal and the interest.
[00150] In another embodiment, the issuing ArQ coins to central banks for issuance of their wholesale central bank digital currency to their commercial banks and correspondent banking infrastructure is disclosed.
[00151] ArQ coins can be issued by ArQ Bank to central banks for issuing their wholesale Central bank digital currency which can be used between central banks and the commercial banks in their jurisdiction.
[00152] ArQ coins can be issued such that Cental Banks can hold and burn ArQ coins when they want to issue their wholesale central bank digital currency. ArQ coins get burned and currency specific Wholesale central bank digital currency of the central bank gets minted which can then be used by Central banks to transfer to commercial banks in form of tokenized WCBDC or Self sovereign digital currency of the commercial or retail bank or their correspondent banking infrastructure.
[00153] The value of ArQ coins can be pegged to the capital flows on the network which can be calculated by the value of Loans mined on ArQ Blockchain network which generate fixed income non speculative value for the network participants.
[00154] Further, the following disclosure provides a direct support to claimed subject matter. In this aspect, in a different embodiments, the process of creating multiple baskets containing multiple tokenized assets is a step in managing a blockchain-based financial ecosystem. In certain embodiments, users are responsible for creating these baskets, which are collections of various tokenized assets. The tokenized assets may comprise at least one of securities, commodities, decentralized finance tokens, real estate, or non-fungible tokens. This step allows users to organize and manage their assets effectively within the blockchain network.
[00155] In certain embodiments, the creation of these baskets is facilitated by a computer-implemented method for managing a blockchain-based financial ecosystem. This method includes creating multiple baskets containing multiple tokenized assets by users, Users can optimize their coin value by creating a smart contract for managing tokens in a master basket.
[00156] In certain embodiments, the baskets created by users are integral to the optimization of their coin value. Users can optimize their coin value by creating a smart contract for managing tokens in a master basket.
[00157] In certain embodiments, the users coin’s are backed by a fiat currency of a country to which each user belongs. This provides a stable backing for the users' coins, ensuring that the value of the coins is supported by a recognized currency. The users’ coins are backed by a fiat currency of a country to which each user belongs.
[00158] In certain embodiments, artificial intelligence and machine learning-based algorithms and algorithmic trading algorithms connected with the smart contract exchange tokenized assets in the master basket with tokenized assets in a decentralized exchange to optimize the users' coin value. This ensures that the assets within the baskets are managed efficiently, and that the users' coin value is maximized. Artificial intelligence and machine learning-based algorithms and algorithmic trading algorithms connected with the smart contract exchange tokenized assets in the master basket with tokenized assets in a decentralized exchange to optimize the users' coin value.
[00159] In summary, the creation of multiple baskets containing multiple tokenized assets by users is a step in managing a blockchain-based financial ecosystem. This step involves organizing and managing assets, optimizing coin value, and ensuring that the ecosystem remains dynamic and engaged. The use of smart contracts, artificial intelligence, and machine learning further enhances the efficiency and effectiveness of this process.
[00160] In different embodiments, the process of taking loans from financial institutions by network participants involves several intricate actions and attributes. In certain embodiments, the network participants engage with financial institutions to secure loans. These loans are then mined on a blockchain network to create fixed income decentralized autonomous organizations (DAOs). The loans are integral to the financial ecosystem, as they facilitate the creation of DAOs, which are pivotal for managing and optimizing financial activities within the blockchain network.
[00161] In certain embodiments, the network participants secure interest rate payments of the loans. This is achieved by having another loan mined using products and services created by a previous loan as raw material for creation of products and services form the next loan mined. This mechanism ensures non-speculative value creation and increased network activity. The products and services created by the previous loan serve as raw material to create products and services from the next loan which can be bought by network participant, thereby securing the interest rate payments by dao token of the next loan mined and enabling the network participants to take additional loans.
[00162] In certain embodiments, the products and services created by a previous loan are used as raw material for the creation of products and services from the next loan mined to enable non-speculative value creation and increased network activity. This ensures that the ecosystem remains dynamic and that the value created within the network is based on tangible assets and services. The method further includes securing interest rate payments of the loans mined by dao tokens of next loan mined which includes loans taken by network participants to buy products or services created by mined loan and having another loan mined using products and services created by a previous loan as raw material for creation of products and services of the next loan mined.
[00163] In certain embodiments, network participants can apply to complete tasks in the DAOs of the mined loans and receive rewards in the form of increased coin value and minted coins. This incentivizes participation and ensures that the network remains active and engaged. Network participants can apply to complete tasks in the DAOs of the mined loans and receive rewards in the form of increased coin value and minted coins.
[00164] In certain embodiments, the loans are managed by a smart contract-based structured DAO, which oversees the cash flows generated by underlying assets to create fixed income products. The smart contract contains details of capital allocation, interest rate payments, collateral, and the duration of the loan. Miners run optimization algorithms and language models for capital allocation and smart contract generation, ensuring that the smart contract is comprehensive and includes all necessary loan terms.
[00165] Additionally, in certain embodiments, the smart contract facilitates token transfers and manages a token life cycle through burning and minting. This process involves transferring an amount generated to the user, burning newly created tokens, and minting users' coins to execute the terms of the smart contract. The smart contract is generated by the miners utilizing artificial intelligence and optimization techniques, ensuring that the loan terms are accurately incorporated.
[00166] The network participants can also apply to complete tasks in the DAOs of the mined loans and receive rewards in the form of increased coin value and minted coins. This incentivizes network participation and ensures that the ecosystem remains active and engaged.
[00167] In summary, the process of taking loans from financial institutions by network participants involves a series of actions and attributes that ensure the efficient management and optimization of the blockchain-based financial ecosystem. The loans are mined on a blockchain network to create DAOs, secured the interest rate payments by mining loans, and managed by smart contracts that facilitate token transfers and manage a token life cycle. The network participants are incentivized to complete tasks in the DAOs, ensuring active participation and engagement within the ecosystem.
[00168] In different embodiments, the process of having the loans mined on a blockchain network to create fixed income decentralized autonomous organizations (DAOs) involves several intricate steps and interactions among various entities, the entities involved include ‘loans’, ‘blockchain network’, and ‘fixed income decentralized autonomous organizations (DAOs)’.
[00169] In certain embodiments, the loans are mined on a blockchain network to create fixed income decentralized autonomous organizations (DAOs). The loans are integral to the financial ecosystem, serving as the primary financial instruments that are mined on the blockchain network. The blockchain network, in this context, acts as the decentralized ledger that records and validates the transactions associated with these loans. The fixed income decentralized autonomous organizations (DAOs) are the resultant entities that manage the fixed income products generated from these loans.
[00170] The action of having the loans mined on a blockchain network to create fixed income decentralized autonomous organizations (DAOs) is described in the claims as having the loans mined on a blockchain network to create fixed income decentralized autonomous organizations (DAOs). This action is for managing a blockchain-based financial ecosystem, as it ensures the creation of structured financial products that can generate predictable cash flows.
[00171] In certain embodiments, the loans are mined using products and services created by a previous loan as raw material for creating products and services of next mined loan. This process involves securing interest rate payments of the loans taken the network participants by dao tokens of the next loan mined and having another loan mined using the products and services created by a previous loan as raw material for the creation of products and services from the next loan mined. This ensures non-speculative value creation and increased network activity. The products and services created by the previous loan serve as raw material for creation of products and services from the next loan mined, thereby enabling a continuous cycle of value creation and loan mining.
[00172] Miners, run artificial intelligence, machine learning and optimization algorithms and large language models and natural language processing algorithms for capital allocation and smart contract generation. These smart contracts contain details of capital allocation, interest rate payments, collateral, and the duration of the loan, ensuring that all terms are clearly defined and enforceable.
[00173] The fixed income decentralized autonomous organizations (DAOs) manage the cash flows generated by the underlying assets to create fixed income products. These DAOs are structured entities that operate autonomously on the blockchain network, ensuring that the financial products are managed efficiently and transparently. The smart contract-based structured DAO manages the cash flows and ensures that the terms of the smart contract are executed, including the transfer of generated amounts to the user, burning newly created tokens, and minting users' coins.
[00174] In summary, the method involves the intricate process of having loans mined on a blockchain network to create fixed income decentralized autonomous organizations (DAOs). This process includes securing interest rate payments, using products and services created by previous loans as raw material for the creation of products and services from the next loan mined which can be bought by network participants, and managing the cash flows generated by the underlying assets. The blockchain network ensures the integrity and transparency of the transactions, while the DAOs manage the financial products autonomously. This step is for the management of a blockchain-based financial ecosystem, enabling continuous value creation and loan mining.
[00175] The interest rate payments are secured by the network participants by having another loan mined using products and services created by a previous loan as raw material for the creation of products and services by the next loan mined which can be bought by network participants. This method of securing interest rate payments is designed to create a sustainable and self-reinforcing financial ecosystem where the value generated from one loan can be used to support subsequent loans. This process is facilitated by the smart contract, which contains details of the interest rate payments, collateral, and duration of the loan.
[00176] In certain embodiments, the smart contract-based structured DAO manages the cash flows generated by the underlying assets to create fixed income products. These fixed income products, such as collateralized loan obligations, provide a steady stream of income contain the principal amount and interest rate payments of loan mined and principal amount and interest rate payments of loans taken by network participant to. Buy products and services by the loans mined. The smart contract ensures that the cash flows are appropriately allocated to cover the interest payments, thereby maintaining the financial health of the ecosystem.
[00177] The method further includes securing interest rate payments of the loans by the network participants and having another loan mined using products and services created by a previous loan as raw material for the creation of products and services by the next loan mined which can be bought by network participants. This approach not only secures the interest payments but also incentivizes the network participants to create valuable products and services that can be used as raw material for future products and services created by future mined loans. This creates a virtuous cycle of value creation and loan repayment, which is for the long-term sustainability of the blockchain-based financial ecosystem.
[00178] In summary, the process of securing interest rate payments of the loans by the network participants involves using products and services created by a previous loan as raw material for the creation of products and services by the next loan mined which can be bought by network participants. This method ensures that the interest payments are backed by tangible assets, promotes non-speculative value creation, and increases network activity. The smart contract-based structured DAO manages the cash flows generated by the underlying assets to create fixed income products i.e collateralized loan obligations, which provide a steady stream of income by selling the interest payments of loans mined and loans taken by network participants to buy products and services of loans mined. This approach creates a sustainable and self-reinforcing financial ecosystem where the value generated from one loan can be used to support subsequent loans.
[00179] In certain embodiments, the network participants take loans from financial institutions, and these loans are mined on a blockchain network to create fixed income decentralized autonomous organizations (DAOs). The mining of loans on the blockchain network ensures transparency and immutability of the loan transactions. The fixed income DAOs are structured to manage cash flows generated by underlying assets, which include principal amount and interest rate payments from loans mined and principal amount and interest rate payments from loans taken by network participants to buy products and services from loans mined. This structure allows for the creation of fixed income products, such as collateralized loan obligations, which provide a steady stream of income to the investors.
[00180] The smart contract plays a role in this process. In certain embodiments, the smart contract is generated by miners utilizing artificial intelligence and optimization techniques. The smart contract contains details of interest rate payments, collateral, and the duration of the loan. It facilitates token transfers and manages a token life cycle through burning and minting. The smart contract ensures that the terms of the loan are executed accurately and efficiently, providing a secure and automated way to manage the loan transactions.
[00181] The blockchain network, in conjunction with the smart contract, provides a platform for managing these transactions. The network participants can apply to complete tasks in the DAOs of the mined loans and receive rewards in the form of increased coin value and minted coins. This incentivizes participation and ensures that the network remains active and engaged.
[00182] In different embodiments, network participants apply to complete tasks in the DAOs of the mined loans and receive rewards in the form of increased coin value and minted coins. In certain embodiments, the tasks in the DAOs of the mined loans are completed by the network participants to earn the rewards and incentivize network participation. The network participants can apply to complete tasks in the DAOs of the mined loans and receive rewards in the form of increased coin value and minted coins. The rewards are provided to incentivize network participation and reward completion of tasks. The tasks in the DAOs of the mined loans are completed by the network participants to earn the rewards. The network participants can apply to complete tasks in the DAOs of the mined loans and receive rewards in the form of increased coin value and minted coins.
[00183] Further, the rewards are provided to incentivize network participation and reward completion of tasks. The tasks in the DAOs of the mined loans are completed by the network participants to earn the rewards and incentivize network participation. The network participants can apply to complete tasks in the DAOs of the mined loans and receive rewards in the form of increased coin value and minted coins. The rewards are provided to incentivize network participation and reward completion of tasks. The tasks in the DAOs of the mined loans are completed by the network participants to earn the rewards and incentivize network participation.
[00184] In certain embodiments, the smart contract-based structured DAO manages cash flows generated by underlying assets to create fixed income products. These fixed income products include collateralized loan obligations, which provide a steady stream of income for the users. The smart contract transfers an amount generated to the user, burns newly created tokens, and mints users' coins to execute the terms of the smart contract. This process ensures that the users receive the benefits of their investments and that the token life cycle is managed effectively.
[00185] In certain embodiments, the smart contract-based structured DAO manages cash flows generated by underlying assets to create fixed income products. The smart contract transfers an amount generated to the user, burns newly created tokens, and mints users' coins to execute terms of the smart contract. The smart contract facilitates token transfers and manages a token life cycle through burning and minting. The smart contract is generated by the miners utilizing artificial intelligence and optimization techniques, and loan terms are incorporated into the smart contract. The fixed income products comprise collateralized loan obligations. The smart contract transfers an amount generated to the user, burns newly created tokens, and mints users' coins to execute terms of the smart contract.
[00186] In certain embodiments, digital tokens are transferred to users, and newly created tokens are burned upon meeting smart contract terms, while user coins are minted. This process ensures that the supply of tokens is managed effectively, maintaining the value of the users' coins. The smart contract facilitates token transfers and manages a token life cycle through burning and minting, ensuring that the system operates smoothly and efficiently.
[00187] In different embodiments, the process of transferring digital tokens to users and burning newly created tokens upon meeting smart contract terms, while user coins are minted, involves several intricate steps and entities. In certain embodiments, the digital tokens are transferred to users and newly created tokens are burned after the smart contract terms are met, while user coins are minted. This process is for executing the terms of the smart contract and ensuring the proper lifecycle management of tokens within the blockchain-based financial ecosystem.
[00188] In certain embodiments, the digital tokens comprise DeFi tokens and user coins. The DeFi tokens are transferred to the user and burned after the smart contract terms are met, while the user coins are minted. This ensures that the digital tokens are utilized effectively within the ecosystem, providing liquidity and value to the users.
[00189] In certain embodiments, the process of transferring digital tokens to users and burning newly created tokens upon meeting smart contract terms, while user coins are minted, involves the following steps:
? Transferring Digital Tokens to Users: The digital tokens, which comprise DeFi tokens and user coins, are transferred to the users. This transfer is facilitated by the smart contract, which ensures that the tokens are transferred accurately and securely.
? Burning Newly Created Tokens: After the smart contract terms are met, the newly created tokens are burned. This process is for managing the token lifecycle and ensuring that the supply of tokens is controlled.
? Minting User Coins: While the newly created tokens are burned, the user coins are minted. This process ensures that the users receive their coins, which are backed by fiat currency, providing them with a stable and valuable asset.
,CLAIMS:We Claim:
1. A computer-implemented method for managing a blockchain-based financial ecosystem, comprising:
Creating, by users, self-sovereign digital currency, where coin value is generated by tokenized assets and coins are backed by fiat currency
Creating, by users, multiple baskets containing multiple tokenized assets;
taking loans from financial institutions by network participants and having the loans mined on a blockchain network to create fixed income decentralized autonomous organizations (DAOs);
securing, by the network participants, interest rate payments of the mined loans by dao tokens of next loan mined, by having another loan mined using products and services created by a previous loan as raw material for creating products and services from next loan mined;
applying, by the network participants, to complete tasks in the DAOs of the mined loans and receiving rewards in the form of increased coin value and minted coins;
optimizing, by the users, their coin value by creating a smart contract for managing tokens in a master basket;
running, by miners, optimization algorithms and large language models for capital allocation and smart contract generation, wherein the smart contract contains details of interest rate payments, collateral, and duration of the loan;
accepting, by ArQ bank, the smart contract of mined loan to allow the DAOs to go live on the blockchain;
managing, by a smart contract-based structured DAO, cash flows generated by underlying assets to create fixed income products i.e collateralized loan obligations; and
transferring, by the smart contract, an amount generated to the user, burning newly created tokens, and minting users' coins to execute terms of the smart contract.
2. The method of claim 1, further comprising storing, by a centralized server of the central bank, users' account details and transaction history.
3. The method of claim 1, wherein the tokenized assets comprise at least one of securities, commodities, decentralized finance tokens, real estate, or non-fungible tokens, and wherein the users’ coins are backed by a fiat currency of a country to which each user belongs.
4. The method of claim 1, wherein the products and services created by the previous loan are used as raw material for creation of products and services from the next loan to enable non-speculative value creation and increased network activity.
5. The method of claim 1, wherein the tasks in the DAOs of the mined loans are completed by the network participants to earn the rewards and incentivize network participation.
6. The method of claim 1, further comprising exchanging, by artificial intelligence and machine learning-based algorithms and algorithmic trading algorithms connected with the smart contract, tokenized assets in the master basket with tokenized assets in a decentralized exchange to optimize the users' coin value.
7. The method of claim 1, wherein the smart contract is generated by the miners utilizing artificial intelligence and optimization techniques, and large language models and loan terms are incorporated into the smart contract and, wherein the fixed income products comprise collateralized loan obligations are created, and wherein the smart contract facilitates token transfers and manages a token life cycle through burning and minting.
8. A system for managing a blockchain-based financial ecosystem, comprising:
a blockchain network;
a plurality of user devices associated with users and network participants;
a central bank server; and
a processor configured to:
facilitate taking of loans from financial institutions by the network participants and mining of the loans on the blockchain network to create fixed income decentralized autonomous organizations (DAOs);
secure, by the network participants, interest rate payments of the loans mined by dao tokens of next loan mined, and have another loan mined using products and services created by a previous loan as raw material for creation of products and services by the next loan mined which can be bought by network participants;
enable applying, by the network participants, to complete tasks in the DAOs of the mined loans and receiving rewards in the form of increased coin value and minted coins;
run, by miners, optimization algorithms and language models for capital allocation and smart contract generation, wherein the smart contract contains details of capital allocation, principal amount and interest rate payments, collateral, and duration of the loan;
validate, by ArQ bank, the smart contract of mined loan to allow the DAOs to go live on the blockchain;
manage, by a smart contract-based structured DAO, cash flows generated by underlying assets to create fixed income products; and
transfer, by the smart contract, an amount generated to the user, burn newly created tokens, and mint users' coins to execute terms of the smart contract.
9. The system of claim 8, wherein the tokenized assets comprise at least one of securities, commodities, decentralized finance tokens, real estate, or non-fungible tokens, and wherein the users' coins are backed by a fiat currency of a country to which each user belongs, and coin value is generated by tokenized assets owned by user and completion of tasks mentioned in mined loans
10. The system of claim 8, wherein the processor is further configured to exchange, by artificial intelligence and machine learning-based algorithms and algorithmic trading algorithms connected with the smart contract, tokenized assets in the master basket with tokenized assets in a decentralized exchange to optimize the users' coin value.
11. The system of claim 8, wherein the smart contract facilitates token transfers and manages a token life cycle through burning and minting.
12. The system of claim 8, wherein ArQ bank server node is configured to store users' account details and transaction history.
13. A computer-implemented method for optimizing user coin value in a self-sovereign digital currency system, comprising:
creating, by network users, multiple baskets containing tokenized assets;
choosing, by the network users, a master basket from the multiple baskets, wherein the master basket has the most value or is the best performing basket;
deriving, by the network users, a higher percentage of coin value from the master basket compared to other tokenized assets owned by the network users, thereby gamifying coin value and preventing disincentivization of tokenizing non-performing assets;
Creating, smart contract for master basket to buy and sell tokens from master basket and decentralized exchange to coin value optimizing coin value.
Creating, AI/ML based optimization algorithms and connecting to smart contract of master basket for buying and selling tokens from decentralized exchange for optimizing coin value.
14. The method of claim 13, wherein the basket with the most value contains tokenized securities, commodities, active DeFi tokens, tokenized real estate, and coin value increases as reward for completing tasks in decentralized autonomous organizations (DAOs) of mined loans.
15. The method of claim 13, wherein the digital tokens comprise DeFi tokens and user coins, and wherein the DeFi tokens are transferred to the user and burned after smart contract terms are met, while the user coins are minted.
16. The method of claim 13, wherein the user coins are backed by fiat currency of a country to which the network user belongs, and wherein the loan participants apply to complete tasks in DAOs of mined loans and receive rewards in the form of increased coin value and minted coins upon completion and validation of the tasks.
17. The method of claim 13, wherein a loan token is transferred to the loan participant to take the loan to buy products or services, and coins are minted upon payment by loan token.
18. A self-sovereign digital currency system for optimizing user coin value, comprising:
a network interface for creating, by network users, multiple baskets containing tokenized assets;
a processor configured to:
tokenize, network participants can tokenize their real-world assets like real estate assets;
buy, network participants can buy tokenized assets like tokenized securities, commodities, real estate tokens from decentralized exchange
choose, by the network users, a master basket from the multiple baskets, wherein the master basket has the most value or is the best performing basket;
derive, by the network users, a higher percentage of coin value from the master basket compared to other tokenized assets owned by the network users, thereby gamifying coin value and preventing Dis-incentivization of tokenizing non-performing assets;
deposit, network participant can deposit fiat currency in digital wallet linked to public key to mint their coins which are backed by fiat currency of nationality of network participant and whose value is derived by tokenized assets owned by network participant;
burn and mint, network participants coins are not transferred only value corresponding to transaction is transferred by burning of sender’s coins and minting of receivers’ coins, and
transfer digital tokens to users and burn newly created tokens upon meeting smart contract terms, while minting user coins.
19. A method for creating and managing self-sovereign digital currency (SSDC) for individual users in a blockchain-based system as claimed 13, the method comprising:
registering a user with identity proofs to create a user account and a local ledger associated with the user account, wherein the local ledger stores transaction details comprising number of transactions, sender's public key, receiver's public key, transaction hash, and timestamp;
minting and burning coins associated with the use.
20. A method for mining loans in a blockchain-based system, the method comprising:
issuing, loans to borrowers after borrowers specify sector and real world geography for which loan is to be taken along with providing data of products and services created by borrowers business;
mining loans, creating structured decentralized autonomous organisation of mined loans which are created by miners by running artificial intelligence, machine learning and capital allocation and large language models and natural language processing models for smart contract creation and distribution of products and services to network participants;
running, artificial intelligence, machine learning and optimization algorithms for capital allocation and large language models and natural language processing algorithms for smart contract generation;
broadcasting, smart contract of mined loan by ArQ Bank to network participant for allocating capital to buy products or services created by mined loan;
completing tasks, network participants completing tasks mentioned in mined loans leading to creation and distribution of products and services mentioned in mined loans;
creating, smart contract based Special purpose vehicles containing principal amount and interest rate payment from mined loan and principal amount and interest rate payment of loans taken by network participant to buy products and services of mined loan;
securitizing, smart contract based SPV’s with interest rate payments of mined loans and interest rate payments of loans taken by network participants to buy products and services created by mined loan into regulated securitized debt instruments i.e. collateralized loan obligations;
scaling, mining loans by using the products and services created by mined loan 1 as raw material for the creation of products and services of mined loan 2 which can be bought by network participants;
securing, Interest rate payments of network participant buying product or service of mined loan1 by DAO token of mined loan 2 by mining another loan using the product and service of mined loan 1 as raw material for creation of products and service of mined loan 2 which can be bought by network participant;
stacking, DAO tokens of mined loan 1 to buy product or service created by mined loan 1 and creation of product or service of mined loan 2 by using the product or service of mined loan 1 as raw material leading to creation of dao token of mined loan 2 which can then be staked to buy products of mined loan 2 and using it for creation of products and services of mined loan 3 and so on;
indicating, intra contract width of mining loans, scalability factor of mining loans, real world asset volatility indicator of mining loans;
creating, Index fund of mined loans containing dao tokens, spv1 tokens, spv2 tokens of sector specific and real-world geography specific mined loans;
participating, by network participants to complete tasks mentioned in dao’s of mined loans and getting paid by minting of their coins and incentivized by increasing their coin value;
burning of token and minting of coins, dao tokens get burned and dao token holders coins get minted upon completion of work of dao’s of mined loans upon receiving of products and services by network participants;
receiving, monthly payments of smart contract based Collateralized loan obligations of mined loans, and
receiving, monthly payments by minting of coins of SPV token holders for blockchain based settlements of monthly payments of smart contract based collateralized loan obligations of mined loans.
21. A method for creating and managing a self-sovereign digital currency (SSDC) for individual users in a blockchain-based system, the method comprising:
minting and burning, by a burn and mint module, coins associated with a user in the user's wallet, wherein the minting and burning of coins are updated in the user's local ledger and centralized database of ArQ Bank;
backing the self-sovereign digital currency with fiat currency of the user's nationality, wherein the currency is non-transferable and non-tradable;
creating, by a basket creation module, one or more baskets of tokenized assets, wherein each basket is a group of different tokenized assets, and selecting a master basket from the created baskets to derive a higher percentage of coin value for the user's self-sovereign digital currency;
generating, by a contract generation module, smart contracts for tokenization of real-world assets and institutional adoption of decentralized finance, wherein the smart contracts automate transactions and incorporate financial products comprising bonds and loans;
maintaining a blockchain network, wherein each user maintains their own ledger consisting of their transactions, assets, and smart contracts, and ensuring privacy and inclusivity of various financial institutions and users;
deriving the coin value from the user's financial assets, investments, savings, and participation in decentralized autonomous organizations (DAOs), and incentivizing the user to improve their financial health by increasing the coin value through better asset acquisition and participation in DAOs;
facilitating cross-border transactions by burning the sender's currency and minting the receiver's currency, thereby enabling seamless payments, and
increasing the financial health by increasing the coin value through better asset acquisition and participation in DAOs;
22. An apparatus for creating and managing self-sovereign digital currency (SSDC) for individual users in a blockchain-based system, the apparatus comprising:
a user registration module to register a user with identity proofs to create a user account and a local ledger associated with the user account, wherein the local ledger stores transaction details comprising number of transactions, sender's public key, receiver's public key, transaction hash, and timestamp;
a burn and mint module to mint and burn coins associated with the user in the user's wallet, wherein the minting and burning of coins are updated in the user's local ledger;
a basket creation module to create one or more baskets of tokenized assets, wherein each basket groups different tokenized assets, and to select a master basket from the created baskets to derive a higher percentage of coin value for the user's self-sovereign digital currency;
a contract generation module to generate smart contracts for tokenization of real-world assets and institutional adoption of decentralized finance, wherein the smart contracts automate transactions and incorporate financial products comprising bonds and loans;
a blockchain network to maintain a ledger for each user consisting of their transactions, assets, and smart contracts, and to ensure privacy and inclusivity of various financial institutions and users;
a coin value derivation module to derive the coin value from the user's financial assets, investments, savings, and participation in decentralized autonomous organizations (DAOs), and to incentivize the user to improve their financial health by increasing the coin value through better asset acquisition and participation in DAOs;
a cross-border transaction module to facilitate cross-border transactions by burning the sender's currency and minting the receiver's currency, thereby enabling seamless payments,
a ArQ Bank module to update ArQ Bank with all transactions executed by smart contracts and network participants, wherein the ArQ Bank consists of all local ledgers and account balances of all users within the blockchain network;
burning the sender's currency and minting the receiver's currency, thereby enabling seamless payments.
23. A system for proof of Network consensus protocol comprising:
a meta network of networks, consisting of ArQ Bank i.e. centralized database as a node, a permissioned P2P network of ArQ validators as a node and multiple P2P networks of currency specific shards as a node;
a transaction manager which receives transaction information from smart contract or network participant initiating transaction and broadcasts it to ArQ Bank and transaction coordinators of the two P2P networks, and wherein transaction manager further receives transaction validation or invalidation messages from ArQ Bank and transaction coordinators and broadcasts valid transaction messages to ArQ Bank and network participant to update centralized database and users local ledger, and
a transaction coordinator, which selects minimal number of validators required for m/n validation of validators in permissioned P2P network of ArQ validators and permissioned P2P networks of currency specific shards.