Polymesh: Revolutionizing Regulated Asset Tokenization

11 Nov

The digital transformation in finance has led to a significant paradigm shift, especially with the emergence of real world assets (RWAs) on blockchain. This evolution not only increases liquidity but also democratizes access to investment opportunities. To understand the scale, an infographic is provided below.



Polymesh is a blockchain platform specifically designed to manage and trade regulated assets digitally. The project aims to create an infrastructure for tokenization of Real World Assets (RWA), such as securities, real estate, artwork and more. Polymesh is designed to tokenize assets that are subject to regulation, making it attractive to financial institutions and companies dealing with securities or other regulated assets. The Polymesh team developed the ERC-1400 standard for Ethereum, which went further in terms of providing compliance standards for tokenized assets, but Polymesh is extending that concept for its native blockchain.

Team



Bill Papp - Chief Executive Officer: Joined Polymesh Association from Arival Bank, where he was CEO and board member. Extensive experience in financial services, including stints at BankProv, Pacific Premier Trust, MEFA, Mizuho Americas, Pacific Crest Securities, Prudential Securities, and Lehman Brothers. He holds a bachelor's degree in business from Michigan State University and a master's degree from Tufts University.
Adam Dossa - Chief Technology Officer: He moved from Polymath to Polymesh Association in 2022. He has experience at Morgan Stanley where he worked on trading and regulatory infrastructure development. At Polymesh, he is responsible for technical strategy and blockchain technology development.
Nick Cafaro - Head of Product: Responsible for the development of new products and solutions based on Polymesh.
Will Vaz-Jones - Head of Partnerships: He is responsible for the education, implementation and management of key partnerships. Moved to Polymath in early 2019 after working in the traditional financial sector where he was an analyst and then held roles in corporate and business development.
Graeme Moore - Head of Tokenization: Author of “B is for Bitcoin”. Prior to Polymesh, he was the first employee at Polymath, worked as Creative Director at Spartan Race, and was an associate at Canada's largest independent investment firm.
Francis O'Brien (FOB) - Head of Developer Relations: He joined Polymesh after actively participating in the Polymath community since 2017. He has become a key advocate for Polymesh due to his ability to explain the complex technical aspects of blockchain. Prior to that, he worked as an engineer in the oil and gas industry.
Robert Gabriel Jakabosky - Head of Applied Blockchain Research: He started programming in high school and then worked at AlphaTrade, a financial services company. At Polymesh, his work is related to blockchain research.
Amirreza Sarencheh - Cryptography and Blockchain Architect: His role involves working in cryptography and blockchain architecture.
The Polymesh team is a unique combination of experience, expertise and innovative approach, making it exceptionally strong in blockchain technology and financial innovation. It's a really cool team where each member brings their unique contribution, creating synergies towards a common goal of revolutionizing financial services through blockchain. With such a diverse and talented team, Polymesh is at the forefront of innovation, making it one of the most exciting asset tokenization projects to date.

Architecture

Most general purpose blockchains have a limited set of primitives, forcing functions such as security tokens and their management to be implemented via smart contracts, leading to scalability and performance issues. In Polymesh, financial primitives are integrated at the core of the blockchain, allowing users to operate the network with low predefined costs and enabling developers to build innovative decentralized applications (dApps).



Regulated Assets: These are the cornerstone of Polymesh. Leveraging Polymath's experience in creating the ERC-1400 standard, Polymesh aims to balance openness and transparency with compliance with jurisdictional requirements.
Identity: Crucial for all actions involving regulated securities. Polymesh makes identity a core element where all actions are performed through an identity rather than a public key. Identities are universal and permissioned, collecting a set of claims or attestations from network-approved or issuer-specific authorities. These claims are used for managing asset ownership, transfer, and other restrictions.
Record Keeping: Polymesh records all primary and secondary transfers of security tokens, ensuring that ownership data is transparently captured on the blockchain, which reduces information asymmetry between the issuer and token holders.
Capital Distribution: Polymesh allows issuers to distribute cash flows associated with assets by capturing ownership distribution data at fixed times. Distribution can occur on-chain using stablecoins, via external payment receipts, or through a combination of both.
Corporate Governance: Polymesh provides tools for corporate actions leveraging blockchain technology, combining transparency with the ability to vote privately, thus reducing the risk of vote manipulation.
Stablecoins: Polymesh supports stablecoins to facilitate on-chain activities like cash distributions at a fraction of traditional costs. Stablecoins can be pegged to any currency and issued by adequately licensed and capitalized third parties.

Economy

Enabling Economy:

Nominated Proof-of-Stake (NPoS): This consensus mechanism involves Validators, who are regulated entities responsible for running nodes and processing transactions, and Nominators, who stake POLYX on validators. Validators produce blocks, while Nominators stake on them to enhance network security.
Block Rewards: Distributed equally among Validators adhering to protocol rules, with a portion kept by Validators and the remainder distributed to Nominators based on their stake.
Bonding Period: Time during which staked POLYX is locked after a withdrawal request, adjustable via governance.
Finality: Achieved when more than two-thirds of Validators vote in favor of a block, ensuring quick and trusted finalization.
Internal Economy:

Network Reserve Funding: Sources include a transfer from Polymath's Ethereum-held reserve, protocol usage fees, and transaction fees.
Governance: Managed by the Polymesh Governing Council, with potential future governance by POLYX tokenholders.
POLYX Supply: No fixed supply; increases through block rewards, which are also funded by network fees, to support the NPoS mechanism.
Enabled Economy:
Fee Structure:
Transaction Fees: Charged based on transaction size and complexity.
Protocol Fees: For specific blockchain functions, set by the Governing Council.
Developer Fees: Set by developers for smart contracts/extensions, aiding in ecosystem development.
POLYX Utility:
Acts as gas for transactions, similar to ETH on Ethereum.
Encourages participation in blockchain security through staking.
Prevents spam by costing each transaction.
Funds ecosystem growth through grants.
Facilitates governance decisions by allowing staking for votes.
POLY to POLYX Upgrade:
A one-way bridge allows POLY token holders to upgrade to POLYX at a 1:1 ratio, with a requirement for identity validation to transact with POLYX.
This token economy structure aims to ensure the sustainability, security, and utility of the Polymesh blockchain, tailored specifically for regulated assets with an emphasis on compliance and governance.

Polymesh Private



Polymesh Private is a private blockchain infrastructure solution from Polymesh designed for institutions that require increased levels of privacy, control and compliance in their blockchain operations. With Polymesh Private, you can restrict access to the network, making it completely private, where only authorized participants have access to data and transactions. Suitable for companies and institutions that want to take advantage of blockchain technology for internal processes while maximizing privacy and control. This can be useful for testing new financial instruments or for transactions that require strict confidentiality.

Polymesh's Strategic Partnerships and Innovations



1. Institutional and Regulatory Compliance:
Fortuna Digital Custody Ltd.:
Fortuna, an esteemed institutional-grade digital asset custodian based in Ireland, has been approved as a node operator for the Polymesh blockchain. This partnership not only extends Polymesh's network into new European markets but also strengthens the blockchain's security and compliance framework by ensuring all node operators are known and regulated entities. This move aligns with Polymesh's commitment to regulated assets and institutional-grade operations.

2. Expanding Utility Across Sectors:
TokenTraxx's Music NFTs:
TokenTraxx has pioneered the issuance of music NFTs on Polymesh, marking a revolutionary step in the music industry. By leveraging Polymesh's infrastructure, TokenTraxx enables artists like Evan Malamud to directly monetize and distribute their music through NFTs. This initiative not only reduces dependency on intermediaries but also introduces new revenue streams for artists, showcasing Polymesh's versatility beyond traditional financial assets.

AlphaPoint's Integration for Asset Tokenization:
AlphaPoint, a global leader in digital asset infrastructure, has integrated Polymesh into its platforms for tokenization. This partnership simplifies the process of asset tokenization, offering enhanced security, compliance, and efficiency, particularly suited for regulated financial products.

On Chain Listings (OCL) for Real Estate:
OCL is transforming real estate transactions in Florida by integrating with Polymesh. This partnership leverages blockchain for AI-driven title verification and monitoring, aiming to reduce fraud and enhance transaction transparency and efficiency.

REtokens' Real Estate Tokenization:
REtokens has utilized Polymesh to tokenize $30 million in real estate assets, making property investment more accessible and liquid. This initiative demonstrates how Polymesh's features like governance, compliance, and secure settlement can revolutionize real estate investment by allowing fractional ownership and increasing market liquidity.

3. Interoperability and Ecosystem Expansion:

ZenCrypto UAB's Equinox Bridge:
The launch of the Equinox bridge by ZenCrypto facilitates interoperability between Polymesh and Ethereum, allowing for the seamless transfer and wrapping of assets. This bridge not only enhances the utility of POLYX, Polymesh's native token, but also broadens the network's reach by integrating with one of the largest blockchain ecosystems.

4. Strategic Alliances for Global Influence:

Global Blockchain Business Council (GBBC) Membership:
Joining the GBBC positions Polymesh at the forefront of policy-making and standard-setting in the blockchain industry, particularly in the realm of tokenized securities and real-world assets (RWAs), fostering greater institutional adoption and regulatory clarity.

5. Enhancing User Experience:

Talisman Wallet with Ledger Support:
The integration of Polymesh into the popular multi-chain Talisman Wallet, now compatible with Ledger hardware wallets, enhances the security and user experience for managing digital assets on Polymesh, reflecting the growing demand for secure, multi-chain wallet solutions.

These developments collectively highlight Polymesh's strategic focus on:

Compliance and Security: By partnering with regulated entities and focusing on regulated assets.
Innovation: Applying blockchain technology to new sectors like music and real estate.
Interoperability: Ensuring Polymesh assets can interact with other major blockchains.
Accessibility: Making investment opportunities in regulated assets more accessible to a broader audience.

Polymesh is not only expanding its technological capabilities but also its market presence, reinforcing its position as a leader in the tokenization of real-world assets.

Conclusion

Polymesh has significant prospects for growth, particularly in the context of growing interest in asset tokenization and the need for regulatory compliance. Its specialization in regulated assets, technological innovation and strategic partnerships create a sustainable foundation for future growth and adoption in the global financial market. At the moment, the project looks like Ethereum in its nascent stage. Get ready, tokenization is here, billion dollar companies are getting ready to tokenize via Polymesh!

Horban Brothers.