This is going to sound like a bold claim: Polymath is the biggest thing in crypto. I know, everyone seems to be focused on the “next bitcoin” or “next ethereum.” And Polymath is not it.
So why is Polymath such a big deal? Because it aims to put the stock market on the block chain. And the bond market. And mutual funds. And ETFs. And derivatives. Sound interesting yet? It should, because securities markets are the biggest in the world, with over $100 trillion in notional value. And according to Polymath, its all “stampeding toward the blockchain.”
So how does it work? Instead of creating a competing base layer, Polymath uses the ethereum network to tokenize securities. Imagine a company putting all their stock on the blockchain. They can do that with Polymath.
Polymath solves the blockchain’s biggest problem as a fundraising tool: regulatory compliance. You see, for the past few years, the Initial Coin Offering (ICO) has been the hottest tool for companies looking to raise capital. They could just add crypto-something to their business model, and poop out an ICO. The problem with an ICO is that, at least in the United States, it probably qualifies as an offering of securities. And you can’t offer securities in the U.S. without complying with investor protection regulations found in the Securities Act of 1933 and the Exchange Act of 1934. Lawsuits might follow.
Depending on the type of fundraising, the offering might be limited to “accredited investors,” and/or have restrictions on promotion, and/or the amount that can be raised, and/or a dozen other restrictions. Polymath solves all that. It is creating a platform with securities compliance built right in.
Lets say a company wants to raise capital. Soon they will be able to go to the polymath wizard (currently in demo), enter company information, the amount of equity / debt to be raised, other key details, and voila: an offering that complies with the securities laws.
A company can completely tokenize their shares or debt, and sell all or a portion of it to investors. The company can decide whether it wants the “security token” to pay dividends or even have voting rights.
Not only does this portend the Apples and the Amazons of the world moving their shares to the blockchain, it also opens affordable fundraising to smaller ventures. Fundraising has always been an expensive, tedious and time consuming process. Polymath is gunning to change all that.
In late January, 2018, the Polymath Network conducted an “airdrop” of 10,000,000 POLY tokens to approximately 50,000 people. These POLY tokens will be used to fund the creation of securities tokens and trading on the polymath network.
I’ve already got clients interested in using the Polymath Network for their fundraising needs. The ICO is out, the security token is in. It can’t get here fast enough.
SOME STATES MAY CONSIDER THIS AN ATTORNEY ADVERTISEMENT.
I am not your attorney and this is not legal or investment advice.