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Polymath: A launchpad for STOs

Security token offering services


Polymath: Banking on compliance norms to foster STO launches


Last year, the number of ICOs worldwide saw a dramatic dip. Stringent government regulation on ICO sales and the numerous ICO scams are some reasons why entrepreneurs and investors are shying away from ICOs as a fundraising tool. According to a report published by ICO advisory firm Satis Group, nearly 80% of all ICOs conducted in 2017 were scams. While crypto-enthusiasts and entrepreneurs are looking for an alternative to replace the ICO model, Polymath believes it has the answer. 


Polymath is a Barbados based startup, best known for popularizing the idea of Security Token Offering-STOs. According to InWara’s ICO+STO database, Polymath raised $58 million through an SEC-compliant token sale, which was hailed to be the first its kind. Polymath strategically used a portion of the funds raised towards building their security token offering platform, that allows other enterprises to launch SEC-compliant tokens.


Polymath recently made headlines when the company decided to lock up 75 million of its POLY tokens, valued at around $9 million, for a period of five years. Through this strategic move, the company aims to demonstrate the robust health of its treasury, at a time when other Blockchain companies are closing shop or going through massive layoffs due to lack of funds.

Number of STOs by region

Number of STOs by country till date
Source: InWara’s ICO+STO database


According to data compiled by InWara, US leads STO offerings followed by Switzerland, UK and Singapore. The number of STOs in the US stood at 91 of which only 8 have failed to raise adequate capital.


STOs are similar to ICOs, except that they grant investors a right on the company’s tangible assets like stocks or bonds. Since STOs are registered tokens commissioned with the Securities and Exchange Commission (SEC) or other regulatory authorities, this makes the management team accountable to a large extent. This gives confidence to investors as founders who fail to meet goals or is found misusing funds, are legally liable to answer to investors. The same cannot be said for funds raised through ICOs. 


“The Security Token Ecosystem continues to grow significantly”, said Sushrut Gaikwad, Director at InWara, in HCX’s Crypto Summit (UK) last week. “USA seems to be the early leader because of the mature processes in place for filings with SEC. Clear filings allow for easy classification of securities for firms like InWara to bring value as our analysts can course through these documents faster and bring out actionable insights.”


Check out InWara’s article to know how 2019 be a pivotal year for STOs.


How Polymath works


Polymath is a platform that helps enterprises raise funds, by launching a regulatory-compliant security token on the Blockchain. The platform also provides assistance for non-technical entrepreneurs in creating financial securities that are compliant with regulations. In short, Polymath makes it, easier and more systematic for enterprises to launch an STO, who would otherwise be tangled up in a legal and regulatory web.


Polymath platform has four layers in its Blockchain, namely Protocol, Application, Legal, and Exchange. Protocol layer is where all the terms are built in and is the smart contract layer. Tokens are created in the Application layer. The Legal layer is where templates are created by regulatory authorities and is the network governance layer. The Exchange layer is like a digital ledger, similar to that of Bitcoin. Polymath’s platform also ensures that securities issuers, investors, and developers are full KYC/AML compliant.

Related Reading: Security Token Offerings, three things to know. 


Key partnerships by Polymath


Polymath is a securities platform with a focus on government compliance, hence Polymath is leading the crypto market space towards STOs. Over the years, Polymath has managed to invite numerous startups to its STO platform, some of the key partnerships include-


Polymath partners up with tZERO’s blockchain-based subsidiary that is aiming to build an alternative trading platform. tZERO was able to raise $134 million through the sale of it’s 19.25 million TZRO tokens. Interestingly tZERO had an unusually lengthy ICO sale time that started in December 2017 and lasted several months. To know why tZERO’s platform is long awaited check out InWara’s article on the topic.


Polymath associates with Minthealth


A new-age healthcare solution that puts patient medical information on the blockchain. The company aims to improve the quality of life with a patient centered health ecosystem.


Polymath and Corl


An investment platform that lets businesses offer revenue sharing instead of equity, an ironic twist on Polymath’s focus on securities.


BlockEstate and Polymath 


A Blockchain digital asset management platform that enables easy investment and portfolio diversification. 


Polymath associates with Vstock transfer to bring compliant security in reality


In August last year Polymath announced its partnership with New York based a stock transfer and registrar firm, V Stock. Through this partnership 
Security token issuers on Polymath’s platform will be able to use the registrar and transfer services of V Stock.


Polymath to enter highly Competitive market space


While Polymath is without a doubt, a beacon leading the crypto market towards wide-scale STO adoption, it is not the only company trying to do so. Securitize, Harbor, Swarm and Securrency are some of the alternate compliance platforms available for digitizing securities on the Blockchain.


The future of real estate lies with blockchain technology?


In the future, many assets are likely to be tokenized and sold on the Blockchain but the market currently seems to be swaying towards real estate tokenization. With the number of Blockchain real estate startups surging and industry behemoths like Monaco estate, raising over $54 million in its ICO, this trend is likely to be true. 


Chris Housser, co-founder of Polymath was quoted saying “People really like the idea of fractionalized ownership and the ability to own a piece of something that would be much more difficult to do in the traditional world. With more real-estate-based financial products on the blockchain, there will be greater ability to bundle these products to go long on certain areas and short on others.”


To understand why blockchain is fueling a paradigm shift in perspective in real estate ownership, check out InWara’s article.


Security token offerings (STOs) according to industry in the USA

Security token offerings (STOs) according to industry in the USA
Source: InWara’s ICO+STO database

According to data compiled by InWara, of the 91 STOs in the USA, Financial Services was leading but Real Estate STOs not surprisingly came second.

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