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Architecture of Polymath and Transmission of POLY to POLYX

4 Mins read

Polymath (POLY) is a unique cryptocurrency that provides the technology to create, issue, and manage security tokens on the blockchain. It aims to eliminate outdated processes and introduce new financial instruments by resolving the challenges associated with public infrastructure. This includes information such as identity, compliance, confidentiality, governance, and settlement.

Polymath has developed Polymesh. It is a blockchain designed for regulating assets to meet the regulatory environment of capital markets. 

POLY is the utility token for Polymath and it powers the Polymath Token Studio on Ethereum. Issuers used this for creating and managing security tokens on the platform.

The objective behind the foundation of Polymath was to make it easy for everyone or anyone to launch a security token. A challenge was observed while trying to tokenize a private fund, which gave birth to the idea of Polymath.

It revealed the legal and technical complexities of launching securities on the blockchain. Since its inception, Polymath has grown to include team members and contributions worldwide. It has a growing list of over 50 global service providers.

After the launch of the platform, POLY was created as the native token. It was created to be used to interact with the platform. It was present in around 10,000 wallets holding 240,000,000 tokens distributed during the launch.

Architecture of Polymath

Financial Primitives

In Polymesh, financial primitives are built into the foundation of the chain. Polymesh financial primitives enable users to operate the blockchain with predetermined costs while allowing third-party developers to deploy innovative decentralized applications on top of the chain.

Regulated Assets

Regulated assets are the cornerstone of Polymesh. It created the ERC-1400 standard to help resolve the challenge of open, transparent, and globally accessible systems with jurisdictional compliance.

Identity

Identity is critical to every action with regulated securities. All actions on the chain are mediated through an identity rather than through a simple public key like most blockchains.

Record Keeping

The Polymesh blockchain captures all primary and secondary transfers of security tokens, allowing ownership data about those tokens to be trustlessly captured on-chain while reducing information asymmetry between the issuers and tokenholders.

Capital Distribution

Polymesh allows issuers to distribute cash flows associated with assets. This is done by capturing ownership at fixed points in time. Issuers can determine the recipients of the distribution based on their identity or other criteria.

Corporate Governance 

This allows issuers to leverage the power of the public blockchain to combine transparency with techniques that allow token holders to vote on the issuer’s corporate actions with privacy while mitigating incentives to manipulate voting.

Stablecoins

In addition to security tokens, Polymesh supports stablecoins to facilitate activity on-chain like cash distributions, at a fraction of the traditional costs. Stablecoins on Polymesh can be pegged to any currency, and licensed and capitalized third-parties issue them.

Economies

The consensus mechanism for Polymesh is nominated proof-of-stake. To power Polymesh’s enabling economy, validators and nominators work together. Staking within the network and acting according to the consensus rules is done. 

Validators are permissionless entities, regulated in their respective jurisdictions, that run authoring nodes that keep the blockchain secure and operational at all times.

Nominators select and stake validators as their signal of trust. Their stake is distributed across their selected validators using an algorithm that aims to distribute all the staked POLYX.

Validators equally share the block rewards; the only condition is that validators should follow all the protocol rules.

The amount of time POLYX is locked in following a validator or nominee withdrawal request is known as the Bonding Period. After the request is made, staked POLYX will lapse, completing the bonding period.

Finality

The nominated proof-of-stake (PoS) consensus mechanism offers deterministic finality that can be instantly trusted. If validators vote in favor of a block, it is finalized. A shared characteristic of blockchains is that every new block contains details of all the previous blocks, and if a block is finalized, all its previous blocks are also finalized.

It allows finalizing a batch of blocks in one vote rather than having to vote on every block.

Architecture of Polymath and Transmission of POLY to POLYX

Internal Economy

The objective of providing absolute finality drives the internal economy of Polymesh. It incentivizes the correct production of blocks and builds a sustainable and secure network.

Polymesh’s network reserve is funded through: direct transfer from Polymath’s reserve currently held on Ethereum, which unlocks over time; protocol usage fees; and network transaction fees.

Enabled Economy

The POLYX fees at the core of Polymesh need to protect against denial-of-service (DoS) or spam attacks, as well as reward developers or organizations that build on Polymesh with additional customized functionality.

There are three classes of POLYX fees that the originator of the transaction pays:

Transaction fees

These are the basic DoS protection mechanisms; basically, they are a function of the size and complexity of a transaction.

Module fees

These are fees paid for specific actions on the network, like issuing a new security token or dividend.

Smart Extension fees

These are fees paid for third-party smart extensions found in the smart extension marketplace and are by third-party developers.

Token

POLY is the ERC-20 native protocol token. It has a total supply of 1 billion tokens. It is assumed that the majority of POLY will be converted to POLYX. The total supply of POLYX will be uncapped. The supply of POLYX will be increasing to fund block rewards.

POLYX is created to be used on the Polymesh chain, supporting the platform and serving the system in ways that include fueling and enabling the economy, increasing system value creation, preventing spam, paying grants for projects, and managing upgrade governance.

Conclusion: POLY to POLYX upgrade

For at least one year from the launch of the Polymesh mainnet, there will be a bridge to upgrade POLY to POLYX. POLY token holders will upgrade to POLYX tokens at a 1:1 rate. A significant amount of the POLY reserve will also migrate to the same bridge. It will require a validated identity to transact with POLYX tokens.

FAQs

Where can a user buy Polymath?

POLY tokens are traded on both DEX and CEX. The most popular exchange is Uniswap V3, and other exchanges include Indodax and Energiswap.

Which is the most active trading pair?

The most active trading pair involving POLY is POLY/WETH.

What are the other assets similar to Polymath?

Assets that have similar market caps include Baby Doge Coin, Ribbon Finance, Liquidity USD, and many others.

Source

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About author
Harry is a crypto enthusiast and experienced trader with a track record of success. With a deep understanding of blockchain technology, he has analyzed market trends and identified profitable opportunities, resulting in impressive returns. Harry 's expertise lies in developing effective trading strategies that leverage the potential of cryptocurrencies. Through his articles, guides, and educational resources, he shares his insights and knowledge, helping individuals make informed trading decisions. With a keen eye for market patterns, Harry has navigated the volatile crypto landscape with confidence. Stay tuned for valuable perspectives and expert advice from Harry as he contributes to the Ailtra platform.
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