After having enabled the creation of 150+ tokens, their research and experience has shown that institutions need a blockchain built from the ground up with the specific requirements of securities regulations in mind. For Polymath, the Ethereum blockchain has been an excellent starting point for security tokens, but is missing foundational elements that issuers and investors need, and that institutions and regulators require. Security tokens have the ability to alter the financial landscape, unlocking trillions of dollars in asset value and investment, programmably automating operations, and driving new paths to liquidity. Polymesh, a blockchain built for security tokens,Р’В live in March 2021.

They made confidentiality, identity, compliance, and governance key design principles in the architecture, working them into the ideation and the foundation of the chain, to create an enterprise-grade platform that drives the acceptance and adoption of security tokens. With Polymesh, they're building a blockchain specifically for security tokens. In the future, itРІР‚в„ўs something we will keep it closely under review.Polymath provides technology to create, issue, and manage digital securities on the blockchain. РІР‚СљOf course, we keep an eye on other types of technology. РІР‚СљAt the moment we are focused on building the Polymesh blockchain,РІР‚Сњ he said.

Regarding ParityРІР‚в„ўs Polkadot, also built on Substrate, Dossa said Polymath remains open to interoperability down the road. We wanted to give people the option in a rich and flexible way.РІР‚Сњ РІР‚СљThere might be some very custom compliance logic you may need. РІР‚СљSecurity tokens need to be flexible,РІР‚Сњ Dossa said. Dossa said the team looked at Hyperledger Fabric, among other candidates, at the behest of Polymesh technical advisor Charles Hoskinson.Р”Вescribing Substrate as a РІР‚Сљmodular, flexible framework,РІР‚Сњ Dossa said the platform beat out the competition due to the simplicity of building smart contracts from the ground up, a must for the firm. For a large institution that could be an issue,РІР‚Сњ Dossa said. If youРІР‚в„ўre paying transactions on ethereum, you donРІР‚в„ўt really know where that transaction is going to end up. Since miners, who process and sign-off on transactions for a fee, can operate anywhere in the world, institutions could face government scrutiny if fees are traced back to a sanctioned country. How ethereum settles transactions through mining also came into consideration for Polymath, Dossa said. Substrate supports multiple РІР‚вЂњ and even custom РІР‚вЂњ consensus algorithms. РІР‚СљWhen a transaction is finalized, it cannot be undone,РІР‚Сњ he added. Related: BnkToTheFuture CEO: 50 Percent of Funding Will Be Through Security Tokens in 2020Р”Р‡or businesses working with regulated assets and security tokens, even strong statistical guarantees arenРІР‚в„ўt enough, Dossa said. However, ethereum has only experienced one reorg ever following the infamous DAO hack of 2016. In a block reorg, individual blocks containing transactions are rolled back to rescind a disputed transaction. РІР‚СљWhile ethereum has some great attributes, regulated assets and security tokens live in a world which quite often jar with the world ethereum lives in,РІР‚Сњ PolymathРІР‚в„ўs Dossa said in a phone interview.Р”Р„ major issue Dossa pointed out was block reorgs, which are technically possible in PoW systems. (Ethereum is in the process of upgrading to proof-of-stake (PoS) with a target launch date of early 2020.) Dossa said a different mechanism is needed for the institutions Polymath aims to serve. Why migrate?Р”Р„t the center of contention is ethereumРІР‚в„ўs consensus mechanism, proof-of-work (PoW), which only offers a statistical guarantee of transaction finality. A bridge for POLY tokens will be maintained for at least one year. PolymathРІР‚в„ўs ST20 security token (built on ethereumРІР‚в„ўs ERC-1400 standard) and native POLY token (an ERC-20) will journey over to the new Substrate-based chain, the firmРІР‚в„ўs head of blockchain, Adam Dossa, said in an email. Related: Security Token Platform iSTOX Lands Another Big Asian Backer

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