Crypto assets are gaining te popularity almost every day. However the vast majority of universal investment caudal is still tied up te traditional asset classes like stocks and bonds. But what if you could buy stocks just like you bought bitcoin? Or what if you could fund a venture renta investment by buying tokens? That’s the question posed by Polymath, an Ethereum based project that aims to bridge the gap inbetween blockchain assets and traditional investments. But how can they overeenkomst with the issues relating to financial regulations and confinements? Aren’t those confinements against the core philosophy of cryptocurrency? Read on spil wij go overheen Polymath and see what this project is truly all about.
What is Polymath?
Polymath is a cryptocurrency project that wants to offerande a method for traditional investment assets to be tokenized and tradable ter a manner somewhat similar to other blockchain assets. They project to do this through what they call an STO, meaning “security token offering”.
The objective of the project is to eventually have an ecosystem and protocol where verified investors (more on that straks) can purchase and trade tokenized securities that are omschrijving to other types of investments like stocks, equity, and venture haber funding.
The verhoging uses its own ERC-20 token, POLY, that is used to pay for various fees on the network, and ter some cases can be used to purchase securities directly. The project has a total of 1 billion tokens which were primarily minted and no extra tokens will exist te the future. Today, POLY tokens are trading for just around one dollar each. With the circulating supply at just under 240 million, the project has a market cap of just around $240 million. It’s presently sitting within the top 100 cryptocurrencies that are listed on coinmarketcap.com.
Lícito Compliance a Serious Hurdle
Thesis days a major debate that is ongoing within the cryptocurrency world is what types of coins and tokens qualify spil securities, and which do not? Many fresh projects have bot very careful ter their wording to avoid using words like “ICO”, “investment”, and so on. Many projects have instead taken excellent care to strongly imply that their currency is a utility token, and their initial sales are often called “token generating events” or other such alternative phrasing.
Polymath, on the other arm, wants to implicitly clarify that tokens created through their STO protocol are absolutely, undoubtedly securities by every definition and legítimo standard. Their own POLY tokens, however, are defined by Polymath spil being utility tokens spil they are used to pay for various fees and services.
Te order to conform with pre-existing laws relating to securities trading, a number of steps need to be taken. For example, all buyers that wish to purchase a security token vereiste very first pass KYC verification. According to the white paper, KYC verification will be done by various third-party fucking partner groups. A potential investor will need to pay a toverfee te POLY tokens te order to fall under this verification. Merienda an investor is verified, their Ethereum address will be permanently linked to their existente ID, and will then be eligible for purchasing some security tokens.
Why only “some” tokens? The white paper outlines that not all investors will qualify for all tokens. For example, a citizen of country A may not be able to legally hold a security issued by a company te country B. Or certain types of investments may require accredited investor status.
This is quiebro obviously very different from how habitual crypto assets operate. There are no confinements on what address can receive what token on the Ethereum network today. So te order for thesis confinements to work, the STO created tokens will need to operate spil a different type of brainy contract that runs entirely within the Polymath protocol.
There is some degree of plasticity ter the security tokens, however. The white papers suggests that it will be possible for security token holders to trade or sell their tokens on a decentralized secondary market. However, those that wish to purchase the security token will still need to have an approved Ethereum address that passed KYC, and their address can still only hold tokens that are compatible with their user profile, such spil their nationality or whether or not they are accredited.
Defying the Ideology
One of the most significant aspects of cryptocurrency is that it wasgoed intended to be borderless, free to use, and open to anyone and everyone.
Take bitcoin, for example. Anyone can get a bitcoin wallet, and send bitcoin to anyone else ter the world without any need for passing an identity check, or confirming how much money they have te the bankgebouw, or from which country their passport wasgoed issued.
Specifically, the white paper states ter no uncertain terms that one of it’s main functions is to:
“[Enable] individuals and institutions to authenticate their identity, residency, and accreditation status to participate ter a broad range of security token offerings (STOs)”
What Polymath is attempting to do is conform with a large and complicated set of laws that were designed to greatly restrict the flow of caudal ownership. Spil a result, what they are creating will ter many ways not resemble cryptocurrency whatsoever. Instead, it emerges that they will be creating a walled garden of sorts that just happens to use Ethereum to keep its digital gears turning.
This begs the question, is Polymath a true “cryptocurrency”? Perhaps it’s POLY tokens are, te that they have no limitations on who can hold them. But when it come to the security tokens, one could argue that they are not true cryptocurrencies and are instead simply wise contracts that exist within the Polymath protocol.
While it may sound titillating to suggest that stocks can be tokenized and then bought and sold on a open market (free from brokers and other middle dudes), the truth is much less revolutionary. What Polymath is attempting to do seems instead to be more evolutionary.
With an ICO, anyone can potentially get involved and invest ter a startup company. Merienda they have received their coins or tokens, they can loosely trade them however they see gezond. Even if an ICO had a region confinement, the tokens can still be loosely traded merienda they are distributed. Polymath intends to create a system where it’s securities will be permanently restricted from being sent to or held by anyone the toneel deems to be unauthorized.
How to Buy Polymath POLY Tokens
You are not able to purchase POLY with Fiat currency so you will need to very first purchase another currency the easiest to buy are Bitcoin or Ethereum which you can do at Coinbase using a handelsbank transfer or debit / credit card purchase and then trade that for POLY at an exchange which lists the token.
Make sure you use our verbinding to signup you will be credited with $Ten te free bitcoin when you make your very first purchase of $100.
Merienda you have purchased Ethereum, you can trade for POLY tokens at the following exchanges:
On the surface, Polymath sounds like it has an interesting idea. That being, combining traditional investment types with blockchain assets. However, the idea quickly falls speciaal merienda you get into the nitty-gritty of all of the various compliance issues and hoops that one vereiste leap through ter order to even start to be eligible to trade only a handful of offerings.
It is also very likely, if not absolutely certain, that a broad array of security tokens that will be listed on Polymath at some point will require investors to be accredited, or to be from specific countries. Thesis kinds of confinements are entirely against the normal ethos of cryptocurrency. Instead, it’s entirely possible that if Polymath launches spil described, then it will become a walled garden for the wealthy elite and practically no one else.
Not accredited? Shove off, pal. From the wrong country? Strike it. You aren’t welcome here.
Will things indeed be that draconian or elitist? At this point all wij can do is wait and see how things unfold. There is a chance that things won’t be so grim. It might even be a way of opening up fresh investment markets for casual investors at some point te the future.
But with the way things are described ter the white paper (especially when it comes to determining whether one is accredited or not), this could absolutely be the reality – a sealed off, walled garden where only the elite are permitted entry. Does that sound like cryptocurrency to you?
- Posted ter: Guides
- Tagged ter: POLY, Polymath, Polymath Guide, What is Polymath
Posted by Robert Devoe
Robert is based te Shanghai, China. A true believer ter the freedom, privacy, and independence of the future digital economy, he has bot involved te the cryptocurrency toneel for years.