1. Limitations of Traditional Financial Assets
Traditional financial systems have several limitations. These limitations affect the accessibility, cost efficiency, processing speed, and transparency of financial services.
- Limited Accessibility: Due to geographical and economic factors, many people find it difficult to access financial services in traditional financial systems. According to the World Bank, about 1.7 billion people worldwide do not have a bank account, and most of these people live in developing countries.
DIX provides globally accessible financial services through a decentralized financial system, increasing financial inclusion by offering equal financial opportunities to all users.
- High Transaction Costs: Traditional financial systems require intermediaries, banks, and other financial institutions, resulting in high transaction costs. For example, the average fee for international remittances is about 7%.
DIX significantly reduces transaction costs by using blockchain technology to execute automated transactions through smart contracts without intermediaries. This provides significant cost savings, especially in international remittances and asset transactions.
- Inefficient Clearing and Settlement Systems: The clearing and settlement processes in traditional financial systems are time-consuming and prone to errors. According to the DTCC (Depository Trust & Clearing Corporation), clearing and settlement of global financial transactions take an average of 2-3 days.
DIX verifies transactions in real-time through blockchain's distributed ledger technology and enables automatic clearing and settlement through smart contracts. This greatly improves processing speed and reduces the possibility of errors.
2. Issues in Data Exchange
Data exchange is one of the core elements of financial services, but current data exchange methods have several problems.
- Data Security and Privacy Issues: Financial data contains sensitive information, posing a high risk of data leaks and hacking. According to IBM, the average cost of data breaches in the financial sector in 2020 was about $5.83 million.
DIX securely protects data through blockchain encryption technology and distributed storage systems. Each piece of data is encrypted and stored on the blockchain, with limited access rights to minimize the risk of data leaks.
- Lack of Data Reliability: Current data exchange systems find it difficult to guarantee the authenticity of data. This can lead to financial accidents due to incorrect information.
DIX ensures data reliability through the transparency and immutability of blockchain. All transactions and data changes are recorded on the blockchain and cannot be altered, and anyone can verify this.
- Absence of Data Ownership and Reward System: Individuals providing data are not adequately compensated, and data ownership is unclear. This reduces the motivation for data providers to participate.
DIX incentivizes data provision by rewarding individuals who provide data with DIX TOKENS. It also clarifies data ownership and transparently manages rewards for provided data.
- Solution:
Problem
Detailed Description
Solution
Expected Effects
Limited accessibility
Approximately 1.7 billion people worldwide do not have a bank account
Provide globally accessible financial services through a decentralized financial system
Increase in financial inclusion
High transaction costs
The average fee for international remittances is about 7%
Eliminate intermediaries through blockchain and execute automated transactions using smart contracts
Reduction in transaction costs, cost savings in international remittances and asset transactions
Inefficient clearing and settlement systems
Clearing and settlement takes an average of 2-3 days
Real-time transaction verification through blockchain's distributed ledger technology, automated clearing and settlement through smart contracts
Improved processing speed, reduced possibility of errors
Data security and privacy issues
Risk of financial data leaks and hacking
Protect data through blockchain encryption technology and distributed storage systems
Minimize the risk of data leaks, enhance personal information protection
Lack of data reliability
Difficulty in guaranteeing the authenticity of data
Ensure data reliability through the transparency and immutability of blockchain
Prevention of financial accidents due to incorrect information
Absence of data ownership and reward system
Lack of appropriate compensation for data providers and absence of clear ownership
Reward individuals providing data with DIX TOKENS, clarify data ownership
Encourage participation of data providers, activate data exchange
1 Blockchain-Based Asset Tokenization
Converting traditional financial assets into digital tokens on the blockchain is a method that greatly enhances asset liquidity and transaction transparency.
- Asset Tokenization Process: First, assets are identified and evaluated to determine their value. This can include various assets such as real estate, artwork, stocks, etc. Once identification and evaluation are complete, digital tokens are issued based on the asset. Each token represents a certain portion of the asset, allowing ownership to be divided so that more people can own it. Smart contracts automatically execute rules for asset ownership, transaction conditions, dividends, etc. This ensures transparency and reliability of transactions.
- Providing Liquidity: Tokenized assets can be listed on digital asset exchanges and freely traded. This increases the liquidity of the asset and makes ownership transfer easier. Blockchain-based platforms allow trading 24/7, overcoming the trading time limitations of traditional financial markets.
- Transparency and Security: All transactions are recorded on the blockchain's distributed ledger, which anyone can verify and cannot be altered. This increases transaction transparency and prevents fraud or misconduct. Transaction data and asset information are stored encrypted, enhancing security.
2. Financial Data Exchange Platform
The financial data exchange platform is a core infrastructure that securely exchanges individual financial information and transaction information of virtual assets and real-world assets (RWA), thereby providing various financial services.
- Platform Overview: Instead of traditional centralized databases, it utilizes blockchain to achieve distributed storage and management of data. This strengthens data integrity and security. Various users such as individuals and institutions can provide their financial information or real-world asset transaction data to the platform. Data requesters such as financial institutions, research institutes, and analysis companies can search for necessary data and gain access rights through smart contracts.
Data exchange is automatically carried out through smart contracts. Smart contracts clearly define data provision conditions, rewards, access rights, etc., and are automatically executed when conditions are met.
- Data Exchange Flow:
3. Token Reward
The system is designed so that users can be rewarded with DIX TOKENS every time they provide their data. The reward system is differentiated based on the quantity and quality of data provided.
- Basic Reward: A basic reward is given each time a user provides financial data or real-world asset transaction data. Basic reward payment for providing monthly bank transaction history.
- High-Quality Data: Additional rewards are paid according to the accuracy and usefulness of the data. Evaluation criteria include recency, consistency, level of detail, etc. Additional reward payment for providing recent credit scores.
- Real-time Data: Additional rewards are paid for providing real-time data. This includes real-time transaction history, market fluctuation data, etc. Additional reward payment for providing real-time stock and virtual asset transaction data.
- Rare Data: Additional rewards are paid for providing rare or valuable data. This includes exclusive data from specific markets, etc. Additional reward payment for providing real estate transaction history in specific areas.
4. Data Consumption
Data consumption reward is an incentive structure from the perspective of data usage. A portion of the reward is refunded to users who purchase or use the data. Rewards are paid when data purchases exceed a certain amount.
5. Data Utilization
- Customized Financial Services: Analyze collected data to provide user-tailored financial products and services. For example, it's possible to offer personalized loan products based on individual credit ratings, investment portfolio recommendations, etc.
- Market Analysis and Insights: Analyze large volumes of data to derive financial market trends and insights. This helps financial institutions make better decisions.
- Data Sales: Generate additional revenue by selling data collected on the platform to institutions or research centers that need it. This also shares profits with data providers.
6. Use
DIX's "Blockchain Financial Data Exchange Protocol" can be used in various financial services.
- Traditional Finance and Virtual Asset Exchanges, RWA Platforms: Utilize real-time verified data to conduct accurate credit assessments, simplify approval processes, and analyze transaction data in real-time to identify and manage financial risks in advance.
- Personal Asset Management: Analyze individual financial information data to provide services such as customized financial products including existing finance, virtual assets, and real-world assets, as well as investment portfolio recommendations.
- International Remittance: Through international remittances via blockchain, reduce intermediary fees, shorten transaction times, ensure transparency by recording all transaction details on the blockchain, and contribute to fraud prevention.
7. Token Reward Flow
Blockchain technology is at the core of the DIX protocol, ensuring data transparency and security. In particular, it guarantees secure data transmission and storage by utilizing encryption technologies such as AES and RSA, and is considering the introduction of post-quantum cryptography (PQC) technology in preparation for the future quantum computing era.
To increase data processing speed and scalability, we plan to introduce Layer 2 solutions and expand the network's processing capacity through sharding technology. This will solve problems that may occur when processing large amounts of data and enable fast and secure data exchange globally.
1. Blockchain
Blockchain technology is the core foundation of this protocol, ensuring data transparency, reliability, and security.
- Smart Contracts: Smart contracts are digital contracts that automatically execute on the blockchain. Smart contracts are automatically executed when predefined conditions are met, increasing the reliability and efficiency of transactions. They automate various processes such as data provision, data requests, token rewards, and transaction verification. For example, when a data provider registers data, the smart contract automatically verifies it and executes the procedure for paying rewards.
- Distributed Ledger: A distributed ledger is a system where all nodes participating in the blockchain network hold the same transaction data. This means that all transactions are recorded in the same way and cannot be altered by any single party. It records all transactions and data changes, ensuring transparency and integrity. This allows all users to verify transaction history, which increases the reliability of the platform.
- Data Encryption and Security: To protect data, encryption algorithms are used to encrypt data and protect user financial information and transaction data, preventing data leaks and hacking.
- Example Code for Data Encryption and Decryption
Additional expert review is required before use in an actual production environment.
- Explanation of Key Elements
Using PBKDF2: It generates an encryption key from a password. PBKDF2 is used to convert the password into a key, and a randomly generated salt is added to enhance security. count=1000000 represents the number of key stretching iterations, which slows down the key generation process to prevent brute-force attacks.
AES-GCM mode: GCM (Galois/Counter Mode) is a mode that provides both encryption and authentication simultaneously. iv is the initialization vector, newly generated for each encryption attempt. This prevents the reuse of ciphertext. tag is the Message Authentication Code (MAC), used to verify the integrity of the data.
Encryption: Encrypts the data using AES-GCM mode and returns the ciphertext along with the tag. The encrypted result includes salt, iv, tag, and ciphertext, all of which are combined to return the final ciphertext.
Decryption: When decrypting the ciphertext, it first separates salt, iv, tag, and ciphertext. It generates the same key from the password using PBKDF2, then decrypts the data and verifies its integrity. If decryption and verification are successful, it returns the original plaintext. If it fails, it returns None.
Code Modification (to prevent operational errors): In the current code, a KeyError may occur in the decrypt method because self.password is not defined. To resolve this, password should be stored as self.password.
2. Data Transformation and Storage
Data transformation and storage include the process of converting traditional financial data and real-world asset transaction data into a format that can be processed on the blockchain and securely storing it.
- Data Standardization: DIX standardizes data for various financial information data conversions, transforming data into a consistent and systematic format, enhancing consistency, compatibility, and security between various sources and systems, and ensuring reusability. Data standardization improves data quality and makes data easier to understand and analyze. Standardized data can be integrated and utilized in multiple systems, applications, and processes.
- Data Conversion Algorithm: This is an algorithm that converts various formats of financial data into a standard format that can be processed on the blockchain. It maintains data consistency and enables efficient processing on the blockchain. For example, it converts data such as bank transaction histories and credit scores into a standardized format that can be recorded on the blockchain.
- Data Conversion Algorithm and Storage Example Code (Python): This is Python code for converting and storing financial data. This code provides functionality to read data from a CSV file, perform date format conversion, currency conversion, and other conversion tasks, and then save the converted data to a new CSV file.
- Code Explanation:
Data Loading: The load_data method reads data from a CSV file and stores it in a pandas DataFrame. If the file doesn't exist or is empty, it outputs an appropriate error message.
Data Transformation: The transform_data method performs several transformation operations on the DataFrame:
Date Format Conversion: Converts the date format from 'YYYY-MM-DD' to 'DD/MM/YYYY'.
Amount Formatting: Formats the amount to two decimal places.
Currency Conversion: Converts currency to standard codes (e.g., 'USD').
Description Capitalization: Converts description text to all uppercase.
Data Saving: The save_data method saves the transformed DataFrame to a new CSV file. It handles errors that may occur during the saving process.
- Distributed Storage: This is a system that stores data on a distributed network rather than a central server. It enhances data availability and security, and eliminates a single point of failure. This reduces the risk of data loss and keeps data always accessible.
3. Network Infrastructure
This is the infrastructure that supports the stable and scalable operation of the blockchain network and data exchange platform.
- Node Operation: This is the process where computers (nodes) participating in the blockchain network validate transactions and generate blocks. It maintains the integrity and stability of the distributed network. Each node verifies the data of the blockchain network and records new transactions in blocks.
- Network Scalability: This improves network performance to expand the network's processing capacity and handle many users and transactions. This increases transaction speed and transaction processing capacity.
4. User Interface and Experience
Design interfaces and experiences that allow users to intuitively use the platform.
- Web Application: An application that allows access to the platform through a web browser. It provides users with functions such as data provision, data request, and reward confirmation. This allows users to easily use the platform.
- Mobile Application Definition: An application that allows access to the platform via smartphone. It enables users to use the platform anytime, anywhere. The mobile application provides the same functions as the web application and includes additional mobile-specific features.
- Dashboard: An interface where users can check their data provision history, reward history, platform participation records, etc. It transparently shows real-time reward status and cumulative rewards. The dashboard helps users understand and effectively use the platform.
5. Data Analytics and Artificial Intelligence)
Develop data analysis tools and artificial intelligence (AI) algorithms to analyze collected data and provide customized financial services.
- Data Analysis: This is the process of analyzing large amounts of data to derive meaningful insights. It provides user-customized financial products and services, and gains trends and insights in the financial market. For example, it can analyze an individual's financial data to present customized loan terms.
- Artificial Intelligence Algorithms: These are algorithms that create predictive models based on data and make decisions automatically. They are used in various fields such as credit score prediction, investment portfolio recommendation, and risk management. This improves the accuracy and efficiency of financial services.
6. Technical Stack and Architecture
- Technology Stack:
Blockchain Platform: Use of Ethereum-based public blockchain.
Smart Contracts: Written in Solidity language, using Truffle and Remix IDE.
Data Transformation: Using Python, Apache Kafka, Apache Spark.
Distributed Storage: Using IPFS, Swarm, Storj.
Network Infrastructure: Using Go-Ethereum (geth), Parity Ethereum, Sharding, Layer 2 solutions.
User Interface: Using React, Angular, Vue.js, React Native, Flutter.
Data Analysis: Using Apache Spark, Hadoop, Tableau.
Artificial Intelligence: Using TensorFlow, PyTorch, Scikit-learn.
Regulatory Compliance: Using Chainalysis, Elliptic, Trulioo.
- System Architecture
Data Collection and Transformation Module: Collects data in various formats and converts it into a standard format that can be recorded on the blockchain.
Distributed Storage System: Uses technologies like IPFS, Swarm, Storj for distributed data storage.
Blockchain Network: Executes smart contracts and validates transactions on an Ethereum-based blockchain network.
Smart Contract Module: Automates processes such as data provision, data requests, token rewards, etc.
User Interface: Supports user access to the platform through web and mobile applications.
Data Analysis and Artificial Intelligence Module: Analyzes collected data and provides customized financial services.
Regulatory Compliance Module: Manages KYC/AML procedures and complies with data protection regulations.
DIX implements community-centered governance through a DAO (Decentralized Autonomous Organization) structure. Important decisions within the platform are made through community voting, and token holders can submit proposals and decide the direction of protocol development through voting. The voting process is automatically conducted through smart contracts, ensuring transparency and fairness.
To comply with regulations in each country, DIX strengthens KYC/AML procedures and complies with global data protection regulations such as GDPR. Through identity verification via Trulioo and real-time transaction monitoring via Chainalysis and Elliptic, it ensures that all activities within the platform meet legal requirements.
Item
Details Implementation
Method
KYC/AML procedures
Implement identity verification and anti-money laundering procedures during user registration
Identity verification through Trulioo, transaction monitoring through Chainalysis and Elliptic
Data protection regulations
Comply with the European Union's GDPR, protect user data and manage access rights
Use AES and RSA encryption technologies, build a data access rights management system
Financial license acquisition plan
Acquire necessary financial licenses in key operational areas (US, Europe, Asia, etc.)
Operate a legal advisory team composed of regulatory experts in each region, continuously monitor and respond to regulatory environment
Transaction monitoring
Monitor suspicious transactions in real-time and report when necessary
Use Chainalysis and Elliptic for real-time transaction monitoring
Legal advice
Continuously monitor regulatory changes in each country and respond promptly
Monitor regulatory changes through the legal advisory team, respond quickly to legal issues