Canadian startup Polymath has a very ambitious plan. It wants to be a one-stop shop for issuers of tokens that have similar properties as financial securities. Equities, bonds, venture capital and global currency live on outdated platforms that were designed in the analog era.
There are two categories of tokens.
- Protocol or app tokens — digital coins used to transfer value or gain access to decentralized networks.
- Security Tokens — digital coins that represent shares in traditional financial assets.
Ethereum has provided a platform for app tokens. Almost any ICO nowadays is based on the Ethereum blockchain platform.
Polymath is betting that security tokens will dominate the blockchain universe. It is aiming to do with securities what Ethereum has done for app tokens.
The app token market is $100 billion in 2017. Polymer predicts an app token market cap of $500 billion by 2027.
The infrastructure to enable trillions of dollars of securities to migrate to the blockchain is not yet built.
One of the great benefits of Polymatch (read: problems they are solving) is that the platform doesn’t require tech knowledge. It guides users through every step from creation, to fundraising, to secondary-market trading while complying with ever stricter regulations.
According to Bloomberg:
A tiny fraction of the approximately $160 billion cryptocurrency market are securities tokens (only $50 million according to Polymath). Unlike application tokens, securities tokens represent a stake in a company or fund and directly benefit from earnings or capital appreciation, much like shares do.
The Polymath platform has launched officially on October 1, and hopes to enable financial companies to launch their own asset-based securities easily and inexpensively.
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