What is Polymath?
Polymath is a blockchain based platform that is designed to issue and trade legally compliant security token offerings. Security tokens are a new way to represent ownership of an asset. Security tokens can represent many different kinds of assets such as stocks, bonds, real estate, gold, art etc.
What is the problem?
The promise of putting securities on the blockchain has led to discussion about a host of potential benefits. These benefits include a reduction in costs, increased liquidity, automated compliance, rapid settlement, fractional ownership, increased transparency and more.
The reality is that security tokens require further development in terms of infrastructure, protocols and compliance before they will become widely adopted. Many benefits of securities tokens such as fractional ownership and increased liquidity do not actually yet exist.
According to the Polymath whitepaper “The Polymath platform opens up the blockchain to legally compliant securities offerings with a network of services designed to lower associated transaction costs over time.” Polymath provides a set of decentralized protocols that enable the creation of regulatory compliant security tokens.
Polymath’s platform is made up of Ethereum smart contracts that coordinate interactions between platform participants. Investors, issuers, developers and KYC providers all use the Poly token in order to pay for necessary services.
Participants in the ecosystem
Issuers: Issuers can post bounties in POLY tokens in order to incentivize legal delegates and smart contract developers to provide services for issuance.
Developers: Developers are incentivized to create STO contracts.
KYC providers: KYC providers pay in POLY in order to be listed on the platform. KYC providers have the opportunity to provide services to potential investors on the Poly platform.
Investors: Investors need to pay KYC providers in POLY in order to be verified. Without verification, investors cannot trade security tokens.
Legal Delegates: Legal delegates earn POLY tokens if they are selected by the issuer. Law firms must pay a fee in POLY in order to be listed on the platform as well. These lawyers take responsibility for the issuance.
The Polymath team page lists 19 employees currently working on the platform. The co-founders of Polymath are Trevor Koverko and Chris Housser. According to Trevor’s linkedin “Trevor Koverko is a prominent blockchain founder, investor and speaker.” He has spoken at many major blockchain events and invested early in projects like Bitcoin, Ethereum, Aion, QTum, Hive, EOS and Shapeshift. Chris Housser is a lawyer and technology entrepreneur who has 4 years’ experience in securities law as well as 12 years’ experience as an infantry soldier in the Canadian Forces.
The base economic unit on the Polymath platform is the POLY token. There is a max supply of one billion POLY tokens. Currently there are 285,000,000 Poly in circulation. The Polymath token distribution is as follows:
Total Supply: 1,000,000,000
TD = Token Distribution = January 31st 2018
240,000,000 released at January 31st 2018 (Token Distribution date)
34,891,932.744 released at May 11th 2018 (TD + 100 days):
6.8% of Reserve Supply: 34,891,932.744
20,000,000 released at August 31st 2018 (TD + 7 months):
Advisor Supply: 20,000,000
89,053,330 released at January 31st 2019 (TD + 1 year):
33% of Founder Supply: 50,000,000
First Bonus Supply: 39,053,330
9,354,408 released at January 31st 2020 (TD + 2 years):
Second Bonus Supply: 9,354,408
128,475,604 released at January 31st 2021 (TD + 3 years):
Remaining of Founder Supply: 100,000,000
Third Bonus Supply: 28,475,604
478,224,725.256 released at January 31st 2022 (TD + 4 years):
Remaining of Reserve Supply: 478,224,725.256
The biggest con of investing in Polymath is the fact that it is highly speculative. The securities token market has a long way to go in terms of regulation, liquidity and protocols. Polymath may actually be too early to market. It is possible that Polymath could run out of capital before security tokens ever gain mainstream adoption. In addition, Polymath will need to stay very flexible and willing to adopt technological advancements in the security token space.
BlockWolf believes that Polymath is positioned very well to benefit from a speculative frenzy that is likely to result from a trend in security token offerings. If the cryptocurrency market turns bullish we believe that Polymath’s $70,000,000 valuation will increase dramatically. Polymath has excellent advisors, a solid team and the brand recognition to really take off. However, we are cautious about Polymath because we believe that the security token industry is still far away from mainstream adoption. It is possible that Polymath will continue to be a leader in the space as it develops, however, there is no way to be sure that will be the case.