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What are you looking to do with Polymath?
Deliver custody services on Polymesh, the purpose-built blockchain digital asset custodians need to drive efficiency and create an engaging customer experience.
With confidential assets enabled by MERCAT, Polymesh makes it possible to maintain trade and position confidentiality without sacrificing compliance automation or auditing.
Unlike public infrastructure, Polymesh can handle complex logic at scale without hitting gas limits or incurring unmanageable costs or processing time.
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By building financial primitives into the core of the chain, Polymesh bypasses much of the complexity that hinders security token adoption.
As a permissioned chain, transactions are conducted between (and validated by) known identities who meet specific criteria.
We have run an operator node as a custodian and have found the integration into our standard blockchain environment straightforward. We look forward to ongoing involvement with this promising approach to resolving institutional challenges with security tokens on public blockchains.
Some blockchains are going to be far more suitable than others for capital markets operations. It's important that the wider investment community sees blockchain not as a separate environment but as a way to make the existing financial and capital markets infrastructure more relevant and useful.
Digital assets on the blockchain have to fulfill the same regulatory requirements as assets stored in traditional ways. A licensed custodian can provide institutions with ready-made software solutions that allow them to offer compliant digital asset custody to their clients.
Anonymity is a key principle of many blockchains, but this ethos makes it very difficult to meet compliance requirements around identity verification and to fulfill Know-Your-Customer (KYC) obligations.
Polymesh streamlines this process by creating a single identity on the chain for each real-world individual or organization and then attaching attestations to their identity as needed.
This modular two-stage approach to identity verification allows for efficient onboarding as well as specific checks.
Polymesh builds identity into the core of the chain, which brings about a number of key advantages.
Most digital securities are programmed using smart contracts, which means that each new token needs to be individually integrated into the custody environment.
Standards like ERC 1400 make this process much more efficient because they standardize the token configuration and eliminate the need for technical due diligence, but there is still room to make the process faster and more automated.
Polymesh automates the corporate actions lifecycle so that custodians can increase efficiency and decrease errors and overhead.
The issuer inputs a few details to create a corporate action—from there, the engine will determine entitlements, schedule the communications*, distribute capital (if required), and update records. With all stakeholders working from the same instructions and looking at the same record, the process can move from one stage to the next without manual intervention, ‘broken telephone’ errors are significantly reduced, and issuers and investors get faster access to decision-critical position updates.
Types of corporate actions managed on Polymesh:
Three years ago, Accenture conducting a study finding that blockchain technology stood to reduce settlement costs by 50%.
As it stands today, there is still a gap between what is possible and what is practical—and Polymesh narrows the gap in three key ways:
Security is always top of mind when it comes to custody, but regulated assets present additional complexities, especially when issued or acquired by institutions rather than individuals.
Polymesh is purpose-built for institutional management of security tokens, and numerous mechanisms have been built into its core to help minimize external threats and maintain internal divisions of responsibility.
It’s important to have a seat at the table—and Polymesh’s network participation model ensures that custodians and their clients are able to engage in decision making and share in rewards.
With traditional proof-of-work blockchains, rewards for securing the chain and the ability to participate in the direction of the chain are out of reach for most token holders. Polymesh’s proof-of-stake consensus mechanism and on-chain governance process opens these systems to an entirely new audience.
At Polymath, it’s our approach that sets us apart when providing the best solutions for our white labelers, issuers, and service providers. By bringing together leaders in capital markets, blockchain, and scalable software, we’ve focused our expertise on building the technology and infrastructure to act as the backbone of the security token industry.
But when it comes to security tokens, we know that’s not enough. That’s why we’ve scoured the financial services industry to create an ecosystem of service providers—KYC/AML, legal firms, broker-dealers, custody agents, and advisory service providers that add years of proficiency in their respective fields. Working shoulder-to-shoulder with our service providers, we’re able to bring all of our respective knowledge to the table to take issuers from security token creation to issuance and beyond.
Polymesh is an institutional-grade blockchain built specifically for regulated securities. It streamlines antiquated processes and opens the door to new financial instruments by solving regulatory challenges with public infrastructure around identity, compliance, confidentiality, and governance.
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Securities issuance and transfer require a known identity, but most chains are built for pseudonymity. Polymesh uses a customer due diligence process to ensure all actors on the chain are verified.
Contentious forks in the chain present significant legal and tax challenges for tokens backed by real assets. Polymesh uses an industry-led governance model to prevent hard forks and guide the evolution of the chain.
Solutions built on top of general purpose blockchains struggle with processing the complex logic needed to comply with regulations. Polymesh builds compliance into the chain, enabling faster processing and lower protocol fees that can scale as demand and complexity of regulation grows.
Most market participants need their position and trades to remain confidential, but anyone can see holdings on general purpose blockchains. Polymesh has engineered a secure asset management protocol that enables confidential asset issuance and transfers.
Polymath is continuing to build out its solutions for custodians. Take a look at the roadmap below to see what’s in the pipeline. Please note that dates and features are all subject to change.
February 2021
Corporate actions represent a significant administrative cost and source of potential errors. This release will allow custodians to further automate corporate action management.
March 2021
This UI gives Governance Council members a simple interface to interact with the chain and with each other to gather information and make decisions.
June 2021
External agent functionality allows issuers and investors to assign custodians (and other agents) to manage or service assets in specific capacities.
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September 2021
With the launch of Layer 2 Solutions, users will be able to create their own proprietary extensions and combine them seamlessly with the broader Polymesh infrastructure.
September 2021
With this release, Polymesh will be able to offer the trade and position confidentiality that capital market operations require.
September 2021
This feature allows users to automate compliance checks for foreign transfer requirements and to process cross-border transactions more efficiently.
December 2021
These integrations allow Polymesh to communicate with legacy messaging and information systems like SWIFT and FIX.
Bring easy creation, issuance, and management of security tokens to your clients.
