The world of cryptocurrency is growing, and with its growth has come more government scrutiny. When billions of dollars are involved, authorities are going to want to make sure everything is going according to the law. Not all platforms succeed, however, and some get into trouble because their ICOs don’t always satisfy regulations.

Polymath is here to help. It’s a platform that’s supposed to make it easy to create new “security tokens” (ST20) that comply with government standards, so that crypto platforms don’t have to worry about getting into trouble

Using our guide below, you’ll get acquainted with what Polymath is and how it works. And while you’re in the neighborhood, you ought to check out  our new list of the best altcoins of 2024 for the most promising coins of the year.

The State of ICOs

Initial coin offerings (ICOs) come in two main forms: utility tokens and security tokens. Utility tokens can be used on the platform in question, and are usually the coins given out at these ICOs. Less common are security tokens, which give the owner equity or stock in a company, and can entitle them from company dividends.

Since securities are subject to government regulations, Polymath wants to make it easier to issue them by including all government regulations into the security tokens themselves.

Securities Regulations

In order to prevent people from being screwed over by companies, government regulations require that securities holders be given accurate financial and other information about those securities. Companies have to register securities with the government, which can be time-consuming and expensive.

The Polymath platform is supposed to make it easier to register security tokens with government, and reduce fees, making it easier to use securities tokens in the first place. The more securities tokens, the more accountability, making sure ICO participants can have some degree of trust in what they’re investing in.

The Platform

The Polymath platform has three different layers.

First there’s the application layer. This contains the marketplace for security tokens, as well as a place for service providers to offer their services. Then there’s the legal layer, which contains several features, including templates for complying with different regulations. Finally there’s the protocol layer, which utilizes a powerful security protocol and a means for a decentralized exchange of assets.

With these layers, Polymath hopes to offer people a way to make sure their tokens are compliant while lowering fees and making the process understandable and simple.

How to Make a Token

Polymath makes the process straightforward, giving token providers a list of options to fill out when trying to launch their token. The information includes the entity’s name and type, a description of the project, and the type of security being offered. You can also specify what the token entitles the owner to have, how many tokens will be made, and whether investors have to be accredited.

This simple system makes sure all the main details are hashed out, and ensures that issuers have all the information necessary before trying to offer a token in the first place. They’ll definitely know they’ve forgotten something when they see the list.

Getting Legal

To comply with the rules, you need a legal representative to sign off on your token. Polymath makes this step easier by allowing legal reps to make bids to look through everything and make sure it’s kosher. Their fees are paid in POLY, the native token of the Polymath platform.

These reps also work with developers to come up with smart contracts to embed in the token itself that enforce the standards that have been set up according to the list we mentioned earlier (type of security, what it entitles the owner to, etc).

Easy enough.

Investing

If you want to invest, you need to prove yourself first. Polymath only allows people to invest if they’re accredited, which is also a service Polymath provides. You can look through a list of Know-Your-Customer (KYC) providers, offer some POLY in escrow, submit your documentation, and then wait for the KYC provider to verify your status with the Polymath platform. This verification comes in the form of a smart contract that contains all the details about what you can do vis-a-vis buying securities. This smart contract is a blockchain version of what a KYC provider would do in the “real” investing world, so it’s nothing more than would already need to be done.

Token Rules

Most security tokens aren’t traded on crypto exchanges. Why? Simple: regulations cause problems, and most exchanges could do without those problems. The main problem is that exchanges aren’t equipped to determine who can and who can’t buy a security (or which security). Polymath solves this problem with the smart contract embedded in security tokens made on their service. If you aren’t accredited by the KYC providers on the Polymath platform, you won’t be able to buy them. It’s a self-regulating system.

The POLY Token

Transactions on the Polymath network utilize the POLY token, which is ERC-20 compliant. POLY can be earned by developers for creating smart contracts for tokens, and must be paid to the Polymath network by PYC providers for using the system – but they are also paid POLY by those seeking accreditation. Legal representatives also earn POLY for their services.

The result is a self-sustaining, functioning mini-economy that provides incentives for everyone to play by the rules.

The Polymath team itself is led by Trevor Koverko, a crypto developer with a history in Silicon Valley’s heady tech climate. The rest of the team is filled out by experienced developers, advisers, and business types that make the team more well-rounded than many we’ve come across.

The Supply of POLY

Like many cryptocurrencies, there’s a hard cap for how much POLY there can be. That cap is at 1 billion. 240 million of these tokens went out to participants in the platform’s airdrop, which took place in January of 2024. As of now the rest are currently being held by the team behind Polymath, which is the first time we’ve seen such a huge percentage of tokens retained by a platform’s team. What that means is that if you don’t already have POLY in your possession, unfortunately the only way to get it is to trade on an exchange for it.

 

If you’re interested in seeing other ERC-20-compliant tokens, be sure check out our list of the best altcoin investments of 2024.

The Future of POLY

Right now the platform is not live yet. They have several plans in place that must be accomplished before they can release the platform, including making sure they can implement the KYC provider service. They also need to get security token providers onboard so that they have some “success stories” already in place. It’s not clear what their PR focus will be like, since lack of PR often leads to the demise (or stagnation) of blockchain networks and crypto-oriented services.

You can see more information in their graphic below:

Their Partnerships

Partnerships can make or break cryptocurrency projects, which is why Polymath has taken this side of things very seriously. They’ve partnered with database platform IdentityMind for KYC providers, and SelfKey, which provides a system for digital identity management. They’ve also secured the business of Ethereum Capital, SeriesX, and Corl Financial who have all pledged to create their security tokens on Polymath.

More partnerships are also on the way, according to the company.

Their Competition

Right now their main “competition” is tZERO, another platform that’s trying to help people and groups more easily create compliant securities tokens. There aren’t many other projects out there that intend to do the same thing, though, so it’s not that bad – one competitor just means more incentive to do better.

The only other way to register a security is by doing it the old-fashioned way – and few are going to want to go out of their way to use the method that caused so much frustration that it created the need for Polymath in the first place.

The Trading History of POLY

The history of the POLY token started very recently, at the end of January of 2024. It began at a value of around $0.78, which isn’t a bad start. It went up to around $1.64 towards the end of February, but since then it’s sunk to about $0.53. Those who invest now might see a payoff as the year goes on, as the price is likely to go up with new partnership announcements, new feature announcements, and most importantly with the launch of the platform itself.

Buying POLY

There aren’t a lot of place to buy POLY tokens, which is possibly due to the fact that it’s a newer coin and its platform still is in development. You can get it at Kucoin, Idex, Forkdelta and DDEX. There’s no way to buy it for fiat money, however. All exchanges that carry it only trade it for Bitcoin or Ethereum, with Ethereum slightly edging out Bitcoin as the premier trading partner.

Storing POLY

Since POLY is an ERC-20-compliant token, you can store it on any wallet that takes these tokens. These include the most popular online wallet, MyEtherWallet. If you prefer more security, you can also use Trezor or the Ledge Nano S, both of which are hardware wallets and can thus be disconnected from the internet (“cold storage”). They also are more expensive at over $100, while MyEtherWallet is free, but some people prefer the peace of mind to worrying over price.

Polymath vs tZero

Both of these platforms offer a blockchain-based way for people to buy and sell tokens in a way that’s compliant with government regulations. Both also have their own native tokens for using in the network itself to pay for fees and charges. Both utilize KYC providers to make sure investors are accredited, but Polymath has its own KYC provider database while tZero uses a third party for that service. Polymath hasn’t encountered any legal trouble yet, while tZero is under investigation by the SEC.

Polymath vs Ethereum

These are very different platforms. Polymath is a blockchain platform that offers a regulation-compliant way to buy and sell securities tokens, while Ethereum is just a blockchain network that allows currency spending and receiving as well as dApp development. They only have a few things in common, the main things being that they have their own native coins people spend for transactions on their networks, and both make use of smart contracts. Polymath technically is built on the Ethereum blockchain, so in a way they are related genetically, but don’t have the same focus.

Frequently Asked Questions

1. What type of tokens does Polymath have?
   ERC-20 tokens.
2. What’s the name of the Polymath coin?
   POLY.
3. Is Polymath a cryptocurrency?
   Technically yes, as its token is being traded.
4. Is Polymath its own blockchain?
   It’s built on Ethereum, as far as we know.
5. Is there going to be a Polymath ICO?
   No.
6. What is the Polymath Network?
   It’s a platform for buying and selling securities tokens in a regulation-compliant way.
7. When was the Polymath airdrop?
   January, 2024.
8. When is the Polymath token sale?
   That was also January of 2024.
9. What’s the price of the Polymath token?
   About $0.53 at this time.
10. Do you know how to buy Polymath token?
    You can buy it for BTC or ETH at Kucoin, IDEX, ForkDelta and DDEX.
11. Is Polymath on CoinMarketCap?
    Yes.
12. Where can I read a review of the Polymath ICO?
    There will be no ICO, unfortunately.
13. Is there a section for the Polymath Network on Reddit?
    Yes.

Conclusion

The more cryptocurrency and blockchain networks take off, and the more money involved, the more the government is going to crack down on them to make sure they’re complying with regulations. We’ve already seen this with the SEC’s investigation of tZero, a platform similar to Polymath. But Polymath is only trying to make things more legal, more transparent, and more accountable. If Polymath takes off, we might see fewer utility coin offerings and more security coin offerings, and then the crypto marketplace will start to look a lot like the real investment world – and less like an online hobby.

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