In this interview, we sat down with Graeme Moore, VP of Marketing at Polymath. We talked about the the latest updates with the project, the potential and trends of security token offerings, Polymath's ambitious plans for the future, and more.
If you prefer reading over watching the video, below is an excerpt of the interview:
Introduction of what Polymath does
- Polymath is a securities token platform.
- The platform makes it very easy for someone to issue financial security as token on the blockchain. Transform from a piece of paper (stock certificate) to a token.
- Benefits: increased liquidity for shareholders, lowered trading fees, increased automation, etc.
Latest updates from Polymath
- Mainnet has been live recently.
- ERC-20 tokens doesn’t work for security tokens because there is no restrictions as to whom the tokens can be sent to. Polymath has built a new token standard – ST-20 token which addresses the problems of ERC-20.
After the release of Mainnet, how much usage did the platform have ?
- Polymath has been talking to thousands of companies over the past year.
- 57 companies have reserved token tickers on the Polymath platform since mainnet is live.
- 6-7 companies have created security tokens, which are backed by real assets, on their platform so far.
- The team is mostly working on assets such as equity in companies, shares, and funds right now.
- By the end of 2018, Polymath is hoping to have at least 5 security tokens available.
- Polymath’s first batch of issuers are looking to raise a total of $210 million over the next 2-3 months.
- If these projects are successful in their fundraising, that would double the total market cap of security tokens.
- Once Polymath shows that their technology work with these early adopters, other companies could see how their businesses would benefit and traction could pick up quickly.
Security laws are localized and is different in every country. Who can participate in security token offerings (STOs)?
- Security laws are very complicated and can differ significantly across jurisdictions.
- Polymath has built a mechanism where the company interested in issuing a security token talks to their lawyers to determine the restrictions that need to be built into the token.
Does Polymath facilitate in the listing and secondary trading of security tokens?
- Polymath doesn’t have its own exchange, rather they partner with different exchanges
- The team is partnering with Open Finance, the first exchange globally that is already trading security tokens.
- Polymath makes sure the tech is compatible with the exchange so the tokens issued on the Polymath platform can be listed on the partnering exchanges.
- Polymath is the single largest shareholder of Barbados Stock Exchange. Established exchanges can simply plug in the technology and they have the capacity to trade security tokens.
Download the Free Checklist for Crushing ICOs!
This is the guide that help me find the most promising ICOs!
What’s the biggest barriers for issuing security tokens right now? Why are there currently so few of them?
- Because Polymath has only been in mainnet for 3 weeks.
- In the past, it was hard to create a legal complaint token. Technology, infrastructure and ecosystem was no there 1.5 years ago but it is today.
- Exchanges like Open Finance, Tzero, or Barbados Stock Exchange is/will come online.
- It was recently announced that Polymath would partner with Prime Trust (https://primetrust.com/), a SEC-qualified custodian, to provide custody for ST-20 security tokens.
What currencies will be used for contributing to STOs?
- Probably going to see a number of different currencies.
- Corl, the first batch of STOs on Polymath, will accept POLY tokens as a means contribution.
- It will also become a public company through the STO.
- There will be some companies that prefer to raise through fiat.
- On the Polymath platform, issuers can choose to raise using ether or POLY token. This way, everything can be automated using smart contracts.
Demand for STOs – from existing cryptocurrency users or traditional institutional investors?
- People who are interested in contribute to STOs are a mix of existing cryptocurrency users and traditional institutional investors.
- Depending on the security being issued. Some tokens have a strong base in the cryptocurrency and they will have more people contributing in cryptocurrency. Others only take in fiat and likely attract more traditional investors.
How do dividends get paid out? In what currency?
- Based on ST-20 standard, dividends can be paid in Ether or any ERC-20 tokens.
- However, issuers can negotiate with token holders to pay out dividends in other form of currencies. It is up to the issuer.
- Want to resemble something like Coin Market Cap.
- Building out these two domains is not Polymath’s top priority right now as there are only a handful of security tokens in the market right now.
- Eventually they can add more functionalities on the website, such as token screener based on different metrics.
Where do you see Polymath 1 year and 5 years from now?
- In 1 year, Polymath envisions its platform to be the de facto place for anyone looking to issue a security token.
- Going to be a trillion dollars in security token – not necessarily all created by Polymath. This could make the security tokens market bigger than the market for utility tokens.
- In 5 years, Polymath aims to be the de facto place for anyone to issue any financial security.