How Polymath is going to disrupt a $10-trillion market

Stefan Perlebach
Stefan Perlebach

Sep 13, 2018

Interview with Graeme Moore - VP of Marketing @Polymath

1. Which problem is Polymath trying to solve?

Polymath is improving the way that securities are created, stored, and traded. Most securities on Earth are simply pieces of paper, which are very hard to trade, and are not programmable in any way. Polymath makes it easy to create better securities; Security Tokens, which are built using blockchain technology. These securities are easier to trade, which provides shareholders with more liquidity, and companies with more accurate valuations.

2. What is the biggest challenge tokenizing Securities?

The legal work associated with any securities offering is the biggest challenge, which many people don't realize. There is a lot of legal work involved in the sale of securities, and the sale of Security Ookens is no different. The interesting thing to note is that Polymath has made it incredibly easy to create Security Tokens with our App. The app also provides warm introductions to legal teams and other advisors and services you may need to conduct a securities offering.

3. Where do you see the biggest advantages and risks of Security Tokens?

The biggest advantages today are the increased liquidity in private security markets. Paper share certificates are very hard to trade, and you can't do anything with them. Blockchain-based securities, on the other hard, are easy to trade, easy to create, and they are completely programmable and modular, meaning you can easily edit them over time should something need to be changed. Current risks would be on the regulatory side of things. If a government declares Security Tokens outlawed, this would be a major blow to the movement. However, we see Security Tokens as helping regulators, because you can actually code regulations and transfer restrictions into the tokens themselves. Today, with a paper share certificate, regulations are only followed because a human says, "Hey you can't make that trade", or "Hey, you can't sell now, or to that person". What we are proposing is a world where regulations are maintained by the technology, so that things that are not supposed to happen cannot happen.

4. For which kind of security/asset class tokenization brings the most benefits, for which the least?

Right now we are seeing a huge amount of interest from companies who wish to do private offerings. The liquidity their investors experience is a huge benefit. With that being said, we are still creating a Security Token for a company who is "Going Public". CORL. They will be the first company on Earth to go pubic via a Security Token, and we're incredibly excited to be a part of this event.

5. When will we see the first exchanges enabling trading of Security Tokens?

Open Finance Network, with whom Polymath has a partnership, is very close to trading Security Tokens. They have begun accepting applications to list security tokens and they are looking forward to adding tokens that use the ST-20 Standard (the standard that Polymath is spearheading).

Additionally there are many other security token exchanges that are coming online soon. tZero, Templum, Hyperion to name a few. Polymath, through a joint venture, is also the largest single shareholder in the Barbados Stock Exchange. This is an already existing exchange that has all of the necessary licenses to trade securities, where Polymath plans to plug in Security Token trading technology to create a global security token exchange.

6. What would you recommend to projects considering doing an STO?

Engage legal counsel early. Selling securities is no small feat, and it is important to get good legal advice. Come to the Polymath Platform, where you can receive warm introductions to top-notch legal firms that are familiar with the securities and blockchain spaces.

7. What was the biggest learning you made during the last year?

It takes many different parties all coming together with the same vision to create something special that will change the world. We cannot do this alone with just Polymath. We need developers, lawyers, regulators, broker-dealers, KYC providers, custody providers, marketing firms, pioneering companies, and investors to make the vision we have become a reality. It's been an amazing experience connecting with all of these disparate parties over the last year, listening to their feedback, iterating, and forging key relationships to push the industry forward.

8. Where do you see the Security Token Ecosystem in 5 years?

Security Tokens will become the default method used for financial securities. Paper share certificates will disappear first. Then public stock markets will start to see volume being eaten away by Security Token exchanges. In 5 years there will be $10 Trillion of Security Tokens, and it will be considered incredibly strange and antiquated to ever give an investor a piece of paper to represent ownership.

Thanks for the interview.

You can learn more about Polymath here

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