An on‐chain trading model of real world asset backed digital assets

Abstract Metaverse is a digital value interaction network based on blockchain technology, with an important economic system component. While both traditional financial industries and crypto‐native industries have made significant progress by leveraging blockchain, the value stream of each remains limited to separate ecosystems. To bridge this gap between off‐chain and on‐chain economic systems, an on‐chain trading model was proposed using HD key derivation technique for direct uploading onto chains without going through centralized services for IoT data transmission. To improve the current status of NFTs as static assets, a token protocol binding each NFT with a unique account address was proposed. Additionally, oracle technique was leveraged with a decentralized and distributed trust model spanning across on‐chain and off‐chain components which securely pushes data between smart contracts and Web‐APIs. A decentralized trading model was developed based on smart contracts implementing automated market makers according to CFMM algorithm. Parallel transaction computing was executed based on the DAG model to ensure high operational performance and security standards of underlying blockchain. Finally, the on‐chain trading system of real world asset backed digital assets was developed integrating all the above key techniques that correspond to crucial functions of a complete economic system in Metaverse.