Polymath (POLY) is a cryptocurrency based platform that enables the offering and selling of security tokens. In simple terms, the project aims at bridging the gap between traditional investments and blockchain assets. In this article, we expound on Polymath giving you an in-depth analysis of all you need to know about the security tokenization blockchain.
A “Polymath” is a person whose expertise spans a significant number of different subject areas, known to draw on complex bodies of knowledge to solve specific problems.
The next section focuses on the problems that Polymath solves in the world today and why the blockchain is important. We further dwell into the technological aspects of Polymath and the POLY token. Finally, we focus on the development team of Polymath and the price aspects of the cryptocurrency.
Table of Contents
- Why Polymath: The securities regulation problem
- What is Polymath?
- How does it work?
- The POLY Token
- The Polymath Team
- POLY Initial Coin Offering (ICO) & Price Analysis
- Polymath Competitors
Why Polymath: The securities regulation problem
The cryptocurrency field has long been coupled with fraudulent initial coin offerings and other manipulations. This has called regulatory authorities and governments across the world to begin a crackdown on ICOs that do not comply with the securities law. Well, cryptocurrencies are not securities, but the way ICOs are raised gives the reason for agencies such as the Securities Exchange Commission (SEC) to term the assets as “securities”.
Polymath securities token platform solves the compliance issues
Polymath securities token platform solves the compliance issues
Former SEC commissioner Joseph Grundfest, is one of the view that ICOs should follow security offerings and listings. The turned law and business professor at Stanford spoke to New York Times on the matter saying,
ICOs represent the most pervasive, open and notorious violation of federal securities laws since the Code of Hammurabi. It’s more than the extent of the violation. It’s the almost comedic quality of the violation. We’re waiting to see a whole bunch of enforcement actions in this space, and we wonder why they haven’t happened yet.
Polymath solves the issues with securitization and regulation to narrow the gap between traditional financial assets like bonds and equities to blockchain digital assets.
What is Polymath?
The securities token platform offers its users a legally compliant network to launch and trade securities. The blockchain platform is a decentralized protocol that provides an efficient and legal way for tokens to trade at a low transaction cost.
“Polymath is a system to facilitate the primary issuance and secondary trading of blockchain securities tokens. Polymath uses a blockchain-based system to coordinate and incentivize participants to collaborate and launch financial products on the blockchain.” – Polymath whitepaper, Dec 2017
The Polymath blockchain aims to create a platform to tokenize and trade the traditional assets today to fit the blockchain models today. The development team developed a security token offering (STO) instead of the conventional ICOs to covert securities.
The Polymath experience
Polymath enables its users a platform to create security tokens that can be offered on the decentralized platform. The platform also allows individuals to authenticate their identity, residency, and accreditation status to participate in a wide pool of STOs. In addition, Polymath blockchain offers the legal delegates a legally compliant platform to bid on new issuances and offerings.
The whitepaper further states the platform matches issuers and developers on the platform to convert the security into a programmable code to generate the native ERC20 tokens.
How does it work?
The securities token protocol requires five key participants to function as they are listed below:
- Investors: Individual consumers or institutions wishing to purchase or trade security tokens.
- Issuers: Entities that wish to sell security tokens.
- Legal Delegates: Delegates place bids, including proposals with enforceable on-chain restrictions. Delegates can also act as off-chain representatives to help guide issuers through the compliance process.
- KYC Providers: A KYC (Know Your Customer) provider validates the real identities of participants and performs due diligence to accredit them.
- Developers: Software engineers who create or review initial offering contracts for security tokens.
Polymath Technology Process
The first step to using the Polymath platform to purchase security tokens is having your identity and accreditation status validated by a KYC provider. Polymath has a number of KYC providers on its site for users to choose from. You will be required to submit identification documents to which the KYC compliance providers will approve or reject the validation. Once validated, the users are able to purchase security tokens on the Polymath platform.
The Polymath STO process between the ecosystems participants (Image: Polymath Whitepaper)
Offering the security token
For corporations who wish to offer its securities as a way to raise capital on Polymath open an Ethereum transaction to propose a new security token. Legal delegates are notified of this proposed issuance in real time using the event logging functionality built into Ethereum. They are able to propose legal details for the offering (e.g. jurisdictions of investors, type of offering, hold time) as well as the legal delegates’ bounty.
Once the legal delegates sign off the compliance as complete they will set the investor requirements (jurisdictions and accreditation flags) for this STO. The legal delegates work closely with developers to create a unique and custom security token too.
Purchase of the securities
Once the STO is created, investors can now purchase the token on Polymath platform. The smart contracts used in the STO are used to enforce the investor requirements for the securities offering. STO contracts allow the legal delegate to have control over the offering while reducing time and cost to market.
The security tokens
Most cryptocurrency exchanges shy away from security tokens due to the laws and regulations that govern these kinds of assets. Securities at times comes with voting rights, dividends, or other income with tax implications. This makes them venerable to security regulators which keeps exchanges away.
However, with a token created through Polymath, the smart contracts verify who can buy and sell the token. Only investors authorized under Polymath’s KYC providers will be able to hold the token. This could, in theory, eliminate the fees associated with centralized exchanges that ensure security compliance.
The POLY Token
Polymath (POLY) is the token that runs the platform. The ERC20 standard token is created to allow for new issuance and trading on the Ethereum platform. There will ever exist only a billion POLY tokens of which 250 million POLY tokens were offered to the public. The rest were kept by the development team for future use.
The token allows value created in the system to remain in the system by acting as an incentive to POLY investors. Participants in Polymath are incentivized to become claim holders of the system which fosters a community spirit amongst investors. POLY is also used as an incentive for the issuers, legal delegates, developers and KYC providers for their services on the platform.
The Polymath Team
The Polymath team is led by Trever Koverko, the CEO and Co-Founder of Polymath. Chris Housser acts as the chief operating officer and is also the Co-Founder of Polymath. The top chief positions are completed by Pablo Ruiz, the VP of engineering, Thomas Borrel leading the company as the chief product officer and Graeme Moore as the VP of marketing in the firm.
Trevor is a well-experienced entrepreneur and a well-known figure in Silicon Valley. He has dealt with a couple of cryptocurrencies in the past 7 years and has been a successful trader in the field. The CEO is also the founder of DAI private equity firm.
Polymath executive team (from top left – Trevor Koverko, Chris Housser, Pablo Ruiz, Thomas Borrel (bottom left), Graeme Moore, Igor Denisov, and Adam Dossa) Image: Polymath
Other team members include Suhkveer Sanghera, the lead engineer, Shannone Clarke who is the Full Stack developer, Adam Dossa, Solidity technical lead, and Tracy Leparulo, who is the CMO at the firm.
POLY Initial Coin Offering (ICO) & Price Analysis
Polymath (POLY) was first offered to the public in July 2017 through an initial coin offering that ended six months later in December 2017. The ICO price of POLY tokens was US$0.4 per token. The coin is currently trading at less than US$0.125 since its ICO representing a drop of 70% on investment. During the ICO, Polymath raised USD$58.7 million according to ICOdrops.com in form of Ethereum.
POLY currently trades at $0.127310 USD representing a 6.5% growth in the past 24 hours as the markets re-bounced from their shortfall recently.
POLY main competitors are KYC compliant tokens and the regulated cryptocurrencies such as Harbor and Swarm Fund. As much as the two offer similar services to Polymath, they are not substitutes but rather complements to it.
Polymath holds a market advantage at the moment and this will be the case in future if compliant security tokens continue their rapid growth. Harbor and Swarm Fund have an opportunity to gradually grow however not at the expense of Polymath.
Polymath offers its users with a futuristic platform that will be key as the world turns to digital assets and blockchain technology. The securities markets will also benefit greatly from decentralization, transparency, and immutability of Polymath as the mass adaption of cryptocurrencies grows.
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