Polymath Cryptocurrency is a security token platform that uses the ST-20 token standard to ensure compliance with government regulations when issuing digital securities. It operates on the Ethereum blockchain and has a total supply of 1 billion POLY tokens.^[1]

Overview

The Polymesh blockchain captures both primary and secondary transfers of security tokens, allowing user data to be trustlessly captured on-chain while reducing information asymmetry between the issuer and token-holders.^[2]

Polymesh records exchanges of issued security tokens in a number of forms, from atomic settlement on-chain, to payment receipts from off-chain, third-party service providers. Polymath also makes it easy to create, issue, and manage digital securities on the blockchain. Polymath (POLY) is creating a global platform for issuing and investing in securities tokens.^[3]

Polymath’s standard for blockchain security tokens aims to integrate the necessary regulatory requirements into smart contracts and comply with regulations. It establishes a new token standard (ST20) and enforces compliance by whitelisting authorized investors and their Ethereum wallet addresses.^[2]

The foundations

Polymesh is focused on the most crucial regulatory elements, addressed by four key design principles while unlocking the true potential of security tokens:

Confidentiality: protecting information and ownership privacy while providing a mechanism for accurate reporting and auditing.^[2]

Identity: ensuring that no individual or entity can create, acquire, or sell security tokens without a validated identity. Securities regulation requires issuers, in certain instances (i.e. issuances under exemptions), to know the identity or confirm the profile of their investors prior to investment, and continuously monitor their suitability throughout their investment.^[1]

Governance: providing an operating and governance structure for how Polymesh is managed that allows for curation and protects assets from contentious forks during network upgrades. This includes providing an established method for addressing and actioning proposals.^[3]

Compliance: providing financial primitives and smart extensions to manage security tokens across one or more jurisdictions and enforce appropriate rules for creating, issuing, and trading security tokens while also providing the capacity to manage necessary complex restrictions and distributions on-chain.^[1]

Internal economy

The internal economy of Polymesh is driven by the objective to provide absolute finality, incentivize the correct production of blocks, and build a sustainable and secure network. Polymesh’s Network Reserve is funded from three sources: direct transfers from Polymath’s reserve currently held on Ethereum, protocol usage fees, and network transaction fees.^[2]

Token

POLYX is the token use on the Polymesh chain, supporting the platform and serving the system in ways that include but are not limited to:

Increasing system value creation: Funds from the Network Reserve will be paid as block rewards to Validators and Nominators for providing their computing resources, staking POLYX, and meeting standards of proper behavior. POLYX enables the token-holders to actively participate in the security of the blockchain by staking their POLYX to nominate Validators and earning a commission from block rewards.^[3]

Preventing spam: Attaching a cost in POLYX to transactions on the chain helps prevent network spamming.^[2]

Paying grants for projects that contribute to ecosystem growth and maintenance , and managing upgrade governance. POLYX can be used to stake and vote for network upgrades .^[1]