System and method of multi-round token distribution using a blockchain network

A computer-implemented method to participate in a token transfer process for transferring a first quantity of tokens from a sender node to a recipient node using a blockchain, the token transfer process including a plurality of participating nodes and execution of a set of indirect token transactions between multiple pairs of the participating nodes, the sender node and the recipient node being included in the token transfer process as participating nodes, the method, implemented at a participating node, comprising:

• obtaining a subset of the set of indirect token transactions, the subset including a first plurality of indirect token transactions for which the participating node is an input node, and a second plurality of indirect token transactions for which the participating node is an output node, wherein the set of indirect token transactions is generated based on the first quantity of tokens and a predefined number of transaction rounds in the token transfer process;
• identifying a plurality of input addresses for the participating node, one for each of the first plurality of indirect token transactions, and a plurality of output addresses for the participating node, one for each of the second plurality of indirect token transactions;
• obtaining a key share (ki) of a first private key (k), the first private key being unknown to all of the participating nodes;
• and
• collaborating in deriving a first public key (Q) corresponding to the first private key (k) using secret share joining;
• for each indirect token transaction in the subset, collaborating with a respective second participating node included in the indirect token transaction to generate a commitment channel for the indirect token transaction between the participating node and the second participating node, by collaboratively:
• generating a first blockchain transaction (Tc) for committing an indirect quantity of tokens to transfer to an output address of the indirect token transaction,
• generating a second blockchain transaction (Tr,0) that returns the committed indirect quantity of tokens to an input address of the indirect token transaction, and
• generating a third blockchain transaction (Tt) for executing transfer of the committed indirect quantity of tokens to the output address of the indirect token transaction;
• and
• collaborating with all other participating nodes in executing the indirect token transactions of the subset using the generated commitment channels.