Design and Management of Digital Token

NIST’s February 8301 report, “Blockchain Networks: Token Design and Management Overview,” specifically addressed issues related to digital tokens. There are several interesting topics that are worth thinking about.

The focus of future architecture

According to the mainstream design, the architecture is divided into 5 layers from bottom to top:

• Physical layer: Physical hardware. Including servers, network infrastructure, etc.;
• Network layer: A network that supports peer-to-peer network communication. Such as the Internet, enterprise network, etc.;
• Blockchain layer: The implementation of blockchain-related protocols. Including consensus, storage, smart contracts, etc.;
• Integration layer: An integrated application based on blockchain smart contracts. Such as middleware, offline computing storage, etc.;
• Interface Layer: User-facing interface. Such as data analysis, client applications, etc.

The bottom layer and the top layer are rich in research and practice, but the integration layer has strong definability and complex functions, and currently faces great challenges. In fact, in the traditional software architecture, the most important is the middleware layer. Only when the middle stability function is powerful can it effectively link the previous and the next.

At present, the industry does not have in-depth research on the middle layer, and there are not many problems in the traditional academic category. Only the open source community such as the Hyperledger community has begun some explorations on the basis of practice.

Token Definition and Classification

Explicitly defines a token as the data that the service can verify the data exchange with. It is classified into Blockchain-Based tokens (such as various NFTs and FTs) and Self-contained tokens (such as JWT).

The mainstream blockchain-based token implementation is the authentication data bound to the account. And accounts can be on-chain or off-chain (in client wallets). The implementation of Token can be native or contract-based; it can be a UTXO model or an account model; it can be split or non-split.

This actually implies that the digital currency will be taken out separately. After all, the digital currency has a greater significance in the currency, and the underlying realization is just the carrier. The current official digital currency is more about digitizing real currency than a certificate of circulation in the digital world that geeks envision.

Token exchange

Mainly through atomic swap (atomic swap). Unmanaged, the exchange is either fully implemented or will fall back to its original state. The implementation is mostly achieved through hash locks and time locks.

Atomic swaps can be within the same chain or across chains.

It relies heavily on the security of the contract.

Cross-chain support

Including two-way exchange or one-way transfer two scenarios. The implementation depends on the intermediate coordination system, or requires the support of contracts or agreements on both sides.

There is no practical solution for this yet, and further development is required.