Polymath aims to provide a blockchain infrastructure where companies and businesses can host their own Security Token Offerings, or STOs.
ICOs have raised over $4,000,000,000 globally, this new method has disrupted traditional ways of raising capital. Traditional equity markets have yet to participate. Stocks, bonds, private equity and virtually every other traditional asset function better when on the blockchain. Any of those assets can be turned into programmable tokens, which provide advanced security, accessibility and liquidity.
Participants
To get a better insight at how the platform works, we must first go through its participant structure. The first participants in Polymath are developers, which are responsible for reviewing initial offering contracts for security tokens. KYC providers ensure that each Ethereum address is matched to a real individual and checks if they’re eligible to participate, performing due diligence on each participant. The Legal Delegates can place bids and proposals with enforceable on-chain restrictions. Issuers will be entities that create and sell tokens to the Investors, represented either by individual consumers or institutions.
Marketplaces
Aside from hosting STO crowdsales, the platform supports several marketplaces which are all denominated in POLY tokens. The Developers can offer their services in order to create or review smart contracts in their own Developer Marketplace, where they bid for jobs posted by issuers. The Legal Delegate Marketplace helps issuers complete the legal-delegate process and sign off on an insurance. For each new security token, delegates can bid on the cost for providing their services and guiding the issuer through the process. The platform does not guarantee for any of the delegates, leaving up to the issuer to do his own due diligence about the claims and credentials of the delegate of his choice.
And Finally, KYC providers can offer validation and accreditation of investors on the platform, where they post the cost of their services, leaving it up to the end user to pick the provider most suited for them.
Token
POLY is an ERC20 token based on the Ethereum standard, being the economic unit of the Polymath platform. It will be the only token used to pay for services on the Polymath marketplace.
Issues
The biggest problem of Polymath is that it is centralized. It does not employ the use of a DAO which means that government and international regulatory agencies can step in and order Polymath to cease and desist. The fact that Polymath even thinks that it could freely create security tokens and not go through institutions like SEC, just by using “legal delegates” is ridiculous.
Overall, Polymath has strong fundamentals. Security tokens seem to be picking up heat, and they have been one of the hottest aspects of cryptocurrencies in recent years. The platform is already working and they seem to have a solid team backing it. Some legal barriers still remain, but they will eventually be overcome, as cryptocurrencies and security tokens go mainstream.
