Polymath Network is a blockchain built specifically to issue security tokens. Based on the Ethereum blockchain, the platform helps traditional companies issue security tokens in compliance with security regulations.
Read on to find out all about how Polymath works.
- Coin Rank: #142
- Coin Market Capitalization (as of 15 June 2022): $148.9 million
- Coin Economics: Fixed Supply
- Coin Total Supply: 1 billion POLY
- Coin Circulating Supply: 898.7 million POLY
A Brief About Polymath
Polymath Network was founded in 2017 by Chris Housser and Trevor Koverko.
In 2017, during the ICO boom period, crypto projects raised billions of dollars in funding. They did this by issuing utility or security tokens. But since ICOs were designed mainly for crypto projects, traditional companies could not benefit from the boom.
Simultaneously, many ICO exit scams rattled the crypto market, impacting investors’ confidence. To address the issue and to make the issuing of equity as security tokens on a decentralized network possible, Polymath launched its Securities Token Offering (STO) platform.
Polymath issues ERC-1400-compliant tokens known as ST20 tokens.
What’s the difference between ERC-20 and ERC-1400 compliant tokens?
ERC-20 has been the standard issue for most ICO-funded projects. The primary feature of this token is it doesn’t have to comply with the intricate regulations that come with more regulated financial assets like securities. So many traditional companies could not issue equities in the tokenized form to investors. That’s why Ethereum decided to create a new token standard, ERC-1400.
The ERC-1400 standard made it easier for traditional companies to issue tokenized securities while ensuring compliance with financial regulators. They carry the characteristics of fungible as well as non-fungible tokens, allow complete and fractional ownership of securities, and have the power to restrict usage based on identity, geographical region, and asset category.
The last point means the issuer concerned has the power to lay down the condition that the security token cannot be sold outside the jurisdiction of a certain country. Or that it cannot be sold to non-accredited investors.
Polymath’s Securities Token Platform
Polymath token’s platform consists of three layers.
- The application layer consists of the security token marketplace, issuance smart wizard, and service providers.
- The legal layer consists of global regulation templates, crowdsourced delegates, and KYC/AML verifications.
- And, the protocol layer consists of a decentralized exchange, state-of-art security, and baked in compliance.
All three layers work to reduce legal complexities and ambiguity surrounding securities, while minimizing gas fees and improving the liquidity of security tokens.
The process of issuing a security token on Polymath is very similar to issuing equity shares. The issuer has to simply fill in the details of the token, voting rights, dividend rights, token allocation details, and legal and contact details.
POLY is the Polymath Network’s ERC-20 standard utility token. It is used to pay for gas fees, token creation, and compliance checks on the network.
POLY has a fixed supply of 1 billion tokens. Of this, 230 million have been allocated to pre-sale investors, 150 million to founding members, 2% to advisors, 51.3% to Polymath reserve, and 1% is distributed through an airdrop.
Polymath Network Future Growth Potential
Polymath Network seems to have a lot of potential. It will enable traditional companies to take advantage of the decentralized ecosystem without compromising on compliance.
Currently, over 200 security tokens have been deployed using Polymath’s Ethereum-based solution, ranging over $2 billion. It has facilitated issuing securities in real estate, corporate loans, equity, revenue share agreements, and many more.
Although the crypto project has failed to meet its target market share of $10 trillion by 2020, the project looks promising.
Disclaimer : Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. The information provided in this post is not to be considered as investment/financial advice from CoinSwitch. Any action taken upon the information shall be at user's own risk.
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