Polymath Crypto Review

July 6, 2022

Polymath crypto is a new type of security token platform that intends to standardize the process of creating securities on the blockchain. The Polymath network attempts to connect investors with businesses and provide them with securities without the difficulties and costs associated with traditional methods.

Polymath Crypto Review
Polymath Crypto Review

One of the reasons Polymath was founded was to address concerns made by some in the crypto community about whether security tokens will be able to operate without regulatory oversight. However, not everyone thinks that security tokens must go through governmental approval before they may be used. This article will explain what a security token is, how it differs from a utility token, and how to buy and sell one safely.

What is a Security Token?

A security token is a digital asset that operates like a traditional security does. This means that investors buy tokens because they expect a return on their investment and are protected in the event the company goes bankrupt.

While there are many different types of securities tokens, they all have some key features in common including ownership of a portion of a company, ownership rights and obligations and transferability. Some common examples of security tokens include debt securities, equity securities, investment contracts, commodities and derivatives.

How to Buy and Sell Security Tokens

Anyone can access the Polymath network to issue security tokens and use the platform to issue and sell securities. The Polymat platform uses smart contracts to create a legally binding agreement between issuers, investors and market operators. This creates a network that allows issuers to verify investors’ identities, track investor transactions and store the data in a secure blockchain network. Investors can purchase security tokens on a variety of different exchanges that are currently in operation.

It is important to note that some security tokens are not listed on an exchange, so you should always check the listing requirements. There are a few different strategies for buying and selling security tokens. First, you can simply buy tokens directly from the issuer on Polymath’s decentralized exchange (DEX). You can also take part in a round of financing where you can buy a large block of tokens at a discount.

All about Polymath
All about Polymath

Utility Tokens

Fundamentally, a utility token is a tool that gives holders access to a service. In this sense, a utility token acts more like a license to access a service and the individual may not have any right to ownership of the underlying asset. For example, let’s say you own the gaming platform, Etheria, and you want to offer in-game items that players can purchase with the Etheria token. You can use the Etheria platform to manage your inventory and distribute the items to players.

Ownership of the Etheria platform does not give you ownership of the game assets, so it is still just a utility token. You can issue utility tokens to provide access to services. Because utility tokens are not intended to represent ownership of an underlying asset, issuers can issue utility tokens that provide access to a single service. Companies can issue utility tokens like this to raise funds and provide investors with tokens that have no ownership rights. Some of the most well-known issuers of utility tokens are the projects that facilitate decentralized exchanges.

Polymath Network

The Polymath network enables anyone to issue securities and sell them to investors as utility tokens. However, to use the Polymath network, investors must hold a certain amount of Polymath tokens. The purpose of the Polymath network is to create a legally binding agreement between companies issuing securities and investors who purchase tokens.

This can help cut down on fraudulent ICOs as it is much harder to create a fraudulent agreement with Polymath’s smart contract system. The Polymath network also has a dispute resolution system that enables users to resolve disputes and claim fees if a third party mediates the dispute.

How Security Tokens are different from Utility Tokens

  • Ownership of an asset - When you buy a utility token, you do not own the underlying asset. Instead, you have a license to access the service. 
  • Issuance of tokens - Utility tokens are often issued as a reward system where the tokens are given to users in exchange for a service. Security tokens are issued by companies to raise funds, grant ownership rights and grant access to an underlying asset. 
  • Ownership - If a company issues a security token, investors will receive an ownership stake in the company that they can use to vote, receive dividends and have access to company assets. 
  • Transferability - Whereas utility tokens are often restricted to a single platform, security tokens are transferable, so you can sell them on a variety of exchanges. This opens up security tokens to a larger market of investors.

The Future of Securities Tokens and the Need for Polymath

When the bitcoin network first launched, it was known as an asset-backed instrument. That simply means that the network operated as a platform for issuing certificates of ownership for assets such as gold, real estate and mortgage-backed securities. As the bitcoin market matured, investors realized that the system did not have sufficient regulatory oversight, so issuers began using security tokens.

Security tokens offer a more regulated and secure way to issue assets on the blockchain. This creates a reliable and auditable system that will be much more attractive to institutional investors and hedge funds.

Security tokens
Security tokens

Security tokens are a type of digital asset that operates like a traditional security. They are often issued by companies and they represent ownership of an underlying asset. However, they are different from utility tokens in that they represent ownership of an asset. This opens up more investment opportunities for both individuals and institutions as well as provides more access to the securities market.

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