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The blockchain of Polymath contains four layers: Protocol, Application, Legal, and Exchange. The smart-contract layer with all of the terms built in is the protocol layer. The creation of security tokens takes place at the application layer. The network governance layer known as the legal layer is where authorised lawyers create and use templates. The exchange layer functions like the electronic ledger of bitcoin.
The subsequent transactions involve three parties. developers, issuers, and investors. To develop and distribute securities tokens, issuers must pay POLY. Investors pay POLY for transaction costs and KYC/AML verification. For maintaining the network’s security and updates, developers get paid in POLY.
Polymath is a full-stack ST platform that makes it simple for anyone, even without technical skills, to issue a security because it is focused on securities tokens.
Polymath is essentially a “securities in a box” platform that uses a decentralised approach and a digital ledger and goes beyond blockchain to benefit Wall Street itself. On the Polymath network, the following fields are displayed when you create a token:
Type of Legal Entity:
The security type is:
CHARACTERISTICS OF THE TOKEN Voting Rights: Dividend:
Partner for Governance Integration:
% of the Tokens Held by the Company:
Distributed using tokens: a percentage of the company’s equity.
USD cost per token:
Legal Information Offering Security To: Issuing Jurisdiction
Accredited Investors are Required:
Investor KYC Is Required
Partner for KYC Integration:
Freely tradable tokens:
Place in Company:
Permission Contact: Polymath
Once a token has been created, you will perform your own research and comparison shop for legal delegates. After paying the attorney’s fee, the lawyer will prepare the legal paperwork you need to register with the SEC and other regulators and maintain compliance.
You must decide on a KYC provider and escrow the necessary POLY balance in order to become an investor. This will validate your credentials, which the supplier has saved in a smart contract, as well as your identity.
Selling security tokens on a cryptocurrency market is more difficult than selling POLY. Ownership is only available to accredited, approved investors. Selling to an unqualified investor will be like attempting to submit a web form without completing out the mandatory fields because it is built into the smart contract.
Additionally, it’s crucial to dot all your Is and cross all your Ts when submitting securities to any government agency. For this reason, Polymath is bringing in a lot of partners to its STO platform, such as:
The blockchain-based subsidiary of Overstock, tZero, is developing a more effective Wall Street infrastructure.
Minthealth is a healthcare service that uses the blockchain to store patient medical data.
Corl – An ironic twist on Polymath’s emphasis on securities, Corl is an investing platform that enables companies to provide revenue sharing rather than shares.
BlockEstate is a fund that tokenizes real estate transactions using the blockchain.
The success of Polymath depends on the strength of its ecosystem, just as Ethereum, despite the fact that it delivers a different cryptocurrency product. These collaborations show the industry approves of what Polymath is doing.
The ST-20 token standard is used by Polymath, a platform for security tokens, to guarantee that issuing digital assets complies with legal requirements. Similar to Ethereum, Polymath offers equity in businesses, a model with a well-established regulatory framework, as opposed to utility tokens like an ICO platform. In order to maintain regulatory compliance with securities laws, Polymath works on KYC, AML, and other legalities.
In 2017 and 2018, ICOs were criticised by government regulators all around the world.
The ensuing ownership share in the company is what distinguishes an ICO (initial coin offering) from a STO (securities token offering). As their networks, foundations, and tokens are used interchangeably and the actual distinctions between them are muddled, early blockchain initiatives face risks that are well illustrated by Ripple Labs’ attempt to distance itself from the XRP token and the legal issues surrounding Tezos.
Everyone hopped on the ICO bandwagon after the idea was demonstrated to work. According to PwC Switzerland, it grew into a significant industry, with ICOs raising over $13 billion in 2018 and $5.6 billion in 2017. Due to ICO exit scams, which gained popularity because to this money, over $100 million was lost.
Polymath thinks it has the solution, causing the STO to take off and creating a strong blockchain ecosystem. Additionally, CPO Thomas Borrel thinks the STO has the power to fundamentally alter the investment sector.
But does this actually spell the end of the ICO?
Let’s look at the POLY token’s performance on the cryptocurrency market before we respond to that query.
1,000,000,000 POLY worth of Polmath’s token are available overall. As of now, the highest price was $1.59 on February 19, 2018.
Proof of Stake is how POLY is generated (PorS). The ST-20 token standard was developed by Polymath, however it is staked using POLY, an ERC-20 token on the Ethereum blockchain. As a result, even while Polymath facilitates the sale of securities, its own native token is merely a utility token.
The Securities and Exchange Commission actually registered The Polymath ICO, making it the first ICO to properly adhere to SEC regulations. During a private token sale to accredited investors, more over $59 million was raised. Polymath paved the way for everyone else in crypto to follow once it gained entry.
Token airdrops of 240,000,000 POLY were distributed to Polymath users who signed up by January 10, 2018. The initial group kept the remaining supply. You cannot mine for POLY.
Similar to how ETH powers Ethereum transactions, POLY powers Polymath network transactions.
Every day, POLY is exchanged for more over $4 million. Numerous cryptocurrency exchanges, such as CoinZest, Upbit, Binance, Bittrex, Huobi, and LATOKEN, support it. Trading pairings for POLY include those for ETH, BTC, and fiat money like KRW.
POLY is supported by all ERC-20 compatible wallets, including MyEtherWallet and the hardware wallets from Ledger, because it is an ERC-20 utility coin.
Companies will issue shares of their company in order to raise capital. These stock or stakes in the corporation grant voting, profit-sharing, and other privileges.
Of course, there will be bad actors in an unregulated (or under-regulated) market. Similar to how the market for initial coin offerings (ICOs) attracted exit frauds, the New York Stock Exchange in 1929 was rife with overpriced equities that had no genuine support. The Great Depression was caused by the stock market fall in October of that year.
The SEC is one of many governmental organisations established in the wake. In particular, the Securities Exchange Act of 1934 was responsible for founding the SEC. According to the organisation, there are two key areas of concern for securities law:
Companies who advertise publicly and sell securities for investment purposes are required to be open and honest with the public about their operations, the securities they are selling, and the dangers associated with investing.
Brokers, dealers, and exchanges who sell and trade securities must treat investors honestly and fairly, prioritising their interests.
Publicly traded companies (those that sell stock to the public on the open market) are required by the SEC and its laws to file registration statements for newly-offered securities, annual quarterly filings (Forms 10-K and 10-Q), proxy materials sent to shareholders prior to annual meetings, annual reports to shareholders, documentation pertaining to tender offers, and filings pertaining to mergers and acquisitions in order to preserve this public trust.
Along with these records, SEC inspectors frequently watch existing and growing markets for indications of information manipulation, insider trading, unregistered securities sales, and other unlawful activities. Although some ICOs broke additional laws, the majority of them were scrutinised for selling unregistered securities.
I’ve met with SEC enforcement officers as a whistleblower, and they are extremely sharp and successful individuals. To put it another way, not to be trifled with.
A knowledgeable expert is required to navigate all of this material. The Polymath network steps in at this point.