Polymath is a blockchain project that is presenting itself as a platform for securities tokenization. As a company, Polymath was founded by Trevor Koverko and Chris Housser and is headquartered in Toronto, Canada.
The Polymath project aims to provide blockchain solutions to the legally compliant securities offerings. In the Polymath white paper it is stated that a network of services, offered by the company will lower transaction costs, associated with a traditional securities offering.
Aside from the services on the tokenized securities offering, Polymath provides users with and exchange platform and a number of applications for the control over the issued tokens.
Polymath token (POLY) is a ERC 20 standard token. It is ran on the Polymath network that is based on a number of smart contracts built and deployed on the Ethereum platform. However, Polymath smart contacts can be linked to other platforms. Polymath token is utility token that means that it is developed as a way to ensure customer of his ability to access a product or a service provided by the Polymath project. In the case of the Polymath network, these tokens are a way to power up the network and to provide users with a service of issuing a security token. The total number of issued POLY tokens is one billion and no more tokens will be minted. Poly tokens are used to provide legal delegates and developers of the project with bounties to encourage their providing services towards the issuance of customers’ tokens. It means that the limited number of developers and legal firms that are working on securities offering with the Polymath network will decide on which project to provide with their services based on the bounty size offered. Basically, they are used to pay for the performance of the Know-Your-Customer (KYC) and Anti-Money-Laundering (AML) practices and fees.
Polymath price and market performance online via CoinMarketCap:
However, Polymath utility token is not the only token active in the network. As ERC-20 token can be bought and used anonymously, it is not compatible with the aims of providing fully legal security tokens as the legal securities offering must be performed with undertaken KYC and AML practices. For that purpose the newly developed ST20 standard token is used. ST20 token can be owned only be the KYC/AML authorized users from the Polymath investors database. ST20 Polymath token is fully compatible with the legal requirements of most countries. These tokens are easier to develop and control than the traditional securities and they don’t require cooperation with stock exchanges.
ST20 Polymath token issuance
When a user decides to issue his or her ST20 token, he/she must provide a number of details about the project:
- the algorithm of the accrual and distribution of profits;
- the way of the dividends payment;
- number of rights, provided by the asset ownership.
After that, there is a legal assessment of the project: the user receives various proposals from several legal representatives and has the opportunity to choose the best option (depending on the rating of the party, the size of its commission, time period required, etc.).
Further cooperation with the legal delegate will be based on the smart contract, which will be created individually by the developers of smart contracts for the new token. These smart contracts are used for the commissions payment and the regulation of the further collaboration on the platform. They not only cover the financial side of the transaction, but also the investors' jurisdiction, time limits, offer options, etc.
Once a legal delegate is selected, a smart contract is developed and copies of all necessary documents are sent, one can start trading.