Type Protocol + Services Keyword Security Token Token POLY Token Type Token Circulating Supply $82.7M Market Cap ranking 62 Volume of Trade (avg of the last 20 days) $5.9M Volume of Trade ranking 76 Current Price vs DPC Index（90d） 10.92%
Current Price vs Initial Offering Price -62.69%
Polymath is developing a global platform for the issuance and trading of crypto security tokens. Thus, the success of Polymath is tied to the expansion of the security token industry and the ability of Polymath to participate in the growth of the security token market. Following on the heels of the ICO overhang, the securities token market is a nascent industry that many believe is poised for explosive growth.
Polymath started in the middle of 2017 and completed its fundraising in November 2017. At that time the DPRating overseas telegram group gave Polymath a B rating on its “Quick ICO Rating” list. The funding round in 2017 was closed in a short time.
The year 2017 will forever be known as the year of the Initial Token Offering (ICO) explosion. However, as ill-reputed projects overran the crypto space, ICO issuance has since declined dramatically. Not only has enthusiasm for ICOs dropped as prices have fallen, ICOs are still in a grey area from a legal standpoint, limiting their appeal to both issuers and investors. Although issuing digital assets offers startups access to a large pool of ICO investor capital, the internal effort for small companies to issue tokens and the potential risks caused by incomplete and unclear regulations has held back issuer interest. Furthermore, the tokenization process is not yet standardized. For these reasons, the focus of the crypto market has recently shifted its attention to Security Token Offerings (STO).
While STOs are the current hot topic in the crypto world, it is not guaranteed that the promise of STOs will ultimately be fulfilled over the long term. STO issuers must still meet the legal requirements under SEC regulation including Reg D and Reg A. This may limit the number of projects that qualify for an STO issuance. In addition, the SEC has only completed its review of a limited number of STO issues. Many believe this is because the SEC is still studying appropriate regulations for STOs. Thus, the entire STO process remains difficult to navigate for issuers.
On the other hand, as indicated in the tZERO prospectus, it is very likely that there will be a ban on security token trading for the first 12 months after issuance (though sales among accredited investors will be allowed after 3 months). This essentially means that a project will not be listed on exchanges for at least the first year. Even for a patient institutional investor, investing in security tokens will not provide a quick exit strategy under these circumstances. Without the guarantee of a high return associated with last year’s ICOs, STOs will more closely resemble traditional venture capital investments, which may reduce the willingness of institutions to participate. Furthermore, due to the global nature of digital assets, even if STOs become fully SEC-Compliant in the future, it will need to satisfy different regulations in different countries, further complicating the process.
Thus, STOs will not meet their full potential in the short term, and the development process will likely progress in an uneven fashion. First, technology upgrades need to keep pace with the fast-growing market. Second, before a comprehensive regulatory and compliance mechanism is developed, it will be difficult to deal with industry-wide problems such as token theft and hard forks. Moreover, once a single project category shows promise, excessive speculation will likely take hold and result in a bubble.
Polymath is one of first few projects to address the promise of securities tokens. Tokenizing securities, in short, means issuing securities in the form of tokens. While the STO concept was mentioned as early as the first half of 2017, only recently has Polymath and other STO service providers made progress in the details of issuing an STO on a blockchain that is compliant with existing regulations for traditional financial securities, such as equity and debt. Apart from lowering issuance costs and eliminating intermediaries, the most important benefit brought by Polymath and tokenization is high liquidity, which is crucial to financial products.
The Polymath team has a solid background. Co-founder and CEO Trevor Koverko is a prominent blockchain founder, investor and speaker. Most of the core team members also have successful entrepreneurship or management experience. In addition, Polymath has several influential members involved in blockchain and the finance industry serving as advisors to help guide the project in the right direction. At the Blockchain Impact Investment Summit in late September this year, Polymath was awarded a six-week start-up incubation and mentorship from venture capital investor Tim Draper’s Draper University.
From a broader perspective, we believe that Polymath is a high-quality project with solid fundamentals, good strategic direction, consistent and active development, and authentic community engagement. The project has long-term investment value. However, the recent Polymath token price surge is likely to be an overshoot driven by the popularity of STO concept. There are reasons to suspect that some market manipulators, probably from mainland China, are taking advantage of the hype. Therefore, although Polymath is a good long-term investment project, its price performance is more likely to be affected by speculation in the short term.
The Polymath token, symbol POLY, is listed on multiple major exchanges, including Binance, Bittrex, Huobi Global, and Upbit. These exchanges provide good liquidity support for POLY and coverage for most potential investors around the world. Daily trading volume reached $10 million during the peak in October, which makes it harder for price manipulation to occur. According to DPRating team’s investigation, the tokens which were originally held by private investors, advisors and airdrop receivers have all been unlocked and released into circulation. The next unlock date is January 31, 2019 and 1/3 of the total founders’ supply (50 million out of 150 million) and the 39 million distributed in the Presale bonus 1 round will be released. This result is consistent with the 28.6% circulating supply shown on Etherscan. The following graph shows the details of Polymath’s token unlock plan:
The price of POLY began to fall once it was listed on Huobi and Binance. We believe that many speculators exited the market at that moment, and there is reduced risk associated with a sharp drop in price due to the sudden outflow of private equity funds before the next unlock date. But at the same time, although almost all of Polymath’s team members are located in the West, POLY was listed on Huobi very early and is supported by a number of newly emerging small Chinese crypto exchanges. This is usually a red flag that there may be Chinese market manipulators behind the project.
In the short term, the price of POLY began to rise about a month ago buoyed by the rising industry and media attention focused on STOs. Assuming the price is also being pumped by market manipulators, the current price probably has not reached its highest level (100% return in a month is not enough for market manipulators to exit). Thus, the short-term outlook is still promising, but retail investors should pay close attention to the price performance and plan to exit at high levels of extreme volatility. Investors should take note of the usual red flags for a pump scheme, such as flooding social media with marketing materials or a sharp price jump overnight (similar situations have happened to gambling token SOC and WICC and platform token WFee). DPRating will also closely follow the performance of POLY and look for significant signs of market pumping.
In the long run, it is necessary to pay close attention to STO’s regulatory compliance guideline progress and regulatory policies issued by different countries. As the STO is still in the conceptual phase and is influenced by the various regulations around the world, it will not be easy to incorporate it into real-world practice (many questions surround whether it will even be legal or not). The regulatory compliance capability of the Polymath team still requires observation. Therefore, long-term investors in Polymath need to prepare themselves for various setbacks along the way.
Time Span Trend Market Cap Expectation Overall Expectation Short Term Market performance or slight outperformance if the hype continues into the next unlock period 50~60 Neutral Long Term Internally, substantial progress needs to be made; Externally, changes in international recognition of STOs are critical. 45~50 Positive
• The Polymath team has a solid background. Founders and core members are experienced professionals from legal, financial and other industries. The advisors have strong influence in the blockchain industry and can provide important insights and resources.
• Popularity is high and keeps increasing. The Polymath team put a lot of effort into public relations.
• Polymath has certain first-mover advantages over the other STO related projects but is not irreplaceable.
• The current circulation supply is around 28.5% of the 1 billion total supply. Total market cap is relatively large (around $75.3 million).
• Trading volume of POLY has been increasing recently. Good liquidity is supported by major exchanges including Binance, Bittrex, Huobi Global, and Upbit.
• Polymath’s roadmap has not yet been released. In addition to the project’s development progress, the attitude of regulators worldwide is an important external factor and brings strong uncertainties.
Polymath is designed to be a one-stop service platform for security tokens issuance. Aiming to bring the advantages of tokens into the securities market, Polymath provides potential security token issuers with a full suite of services, spanning from token creation to fundraising, regulatory compliance and technical support. In February this year, Polymath introduced the ST-20 standard, which embeds regulatory requirements such as financial security into the tokens and is under the broad umbrella of the security token concept.
Polymath aggregates investors (both individual and institutional), issuers, legal delegates, KYC providers, and developers on its platform. Investors receive accreditation from KYC providers and issuers complete the compliance process with the help of legal consultants in order to issue the security token. Service providers in the Polymath ecosystem are paid using the POLY token.
Overall, the Polymath project focuses on security token issuance in the primary market. It is well-known that an IPO involves strict disclosures in compliance with regulatory requirements, resulting in relatively high legal expenses. However, with the services rules, smart contracts and modular approach provided by Polymath, the token offering process is simplified and expenses are lower. Polymath improves safety, reliability, auditability and accountability
while lowering the entry threshold for issuers of financial products. Issuers can initiate the token launch process easily using Polymath smart contracts and a security token wizard.
During the issuance process, Polymath will provide the client with handholding through of each of the many options in creating a token, helping issuers choose the most suitable solutions. Polymath’s compliance module acts as a repository on Github. Following a specific compatibility format, a module can be embedded directly into smart contracts for execution through the Polymath application system. Issuers can choose a pre-built compliance module to initiate the issuance and verification process or request a new customized module based on an existing module. The modules available for selection will be enriched and improved over time.
Additional trading services in the secondary markets are not mentioned in the initial Polymath white paper and the updated white paper released in February 2018. Currently, Polymath does not focus on providing liquidity in the secondary market, but rather focuses on KYC verification, compliance document audits etc. Because a security token is housed on a decentralized blockchain, the Polymath platform stores the data for each security token separately, eliminating configuration issues.
The cost, complexity and delay associated with fundraising are a significant barrier for small to medium size enterprises. Although the ICO concept improves fundraising efficiency by transferring value via a blockchain, it faces regulatory issues around the world. Security tokenization is not a new concept, but has gained attention recently. Polymath provides a “one-stop service” for companies, designed to improve the efficiency of the entire financing process while maintaining legal compliance. As a protocol and a service provider, Polymath has also launched its own AML/KYC compliant open-source standard ST - 20. From a certain perspective, Polymath wants to be the Ethereum in the trillion-dollar securities market. The token platform built by Polymath involves four layers: a protocol layer, an application layer, a legal layer, and a trading layer. The corresponding potential market for these service is tremendous.
In terms of technology, it is not difficult to implement the functions provided by the platform, such as creating a web interface, auditing documents, and moving the compliance process onto the blockchain. The ST-20 interface is subject to periodical upgrades. The major challenge faced by Polymath is the feasibility and policy direction of STO and the integration of industry resources.
Before receiving a broader acceptance and support, the regulatory future of STO must still be decided. Although Polymath has a first-mover advantage, mainstream institutions and exchanges are also targeting the industry as competitors. Investors should pay close attention to the industry competition as well, such as new products launched on Polymath, number of securities issuances, exchange recognition, latecomers with good industry resources and so on.
|Position||Solution and services for security tokens||15||13|
|Competitive advantages||Solid user base, strong Innovation,Created ST-20 standard, project launched early||5||6|
|Necessity||High demand, Token incentive mechanism is replaceable||15||12|
Core Team Members:
Members Background Trevor Koverko CO-FOUNDER & CHIEF EXECUTIVE OFFICER From Toronto, Canada. LinkedIn profile: https://www. linkedin.com/in/trevorkoverko/ Received his bachelor’s degree in Geology/Earth Science from The University of Calgary in 2010; Received his HBA from The University of Western Ontario-Richard Ivey School of Business in 2012. From 2012 to 2016, Trevor has invested in blockchain projects such as Website buyer, Royalty Exchange, ShapeShift.io, Lumenix, etc. He cofounded Polymath in 2017 after realizing the trend of moving securities market onto blockchain. Chris Housser CO-FOUNDER & CHIEF OPERATIONS OFFICER LinkedIn profile: https://www.linkedin.com/in/chris-housser/ From 2013 to 2017,Chris worked as a partner at Bennett Best Burn in Toronto, mainly engaged in legal consulting services such as business litigation, insurance law, and employment law. He is also a member of the Canadian Bar Association and the Ontario Bar Association. Pablo Ruiz VP OF ENGINEERING Palo managed InfinixSoft, one of Argentina’s top mobile app companies, from 2009 to 2014. In 2015, he joined NXTP Labs, a leading technology venture firm in Latin America. Pablo first worked as a fund manager and later began to focus on the development of enterprise software.
Advisorrs Official introduction Anthony Diiorio CEO & Founder of Decentral & Jaxx, Co-Founder of Ethereum Stan Miroshnik CEO & Managing Director at The Element Group. Stan Miroshnik is Polymath’s banking services partner. He was previously an investment banker at Morgan Stanley. Stan has decades of experience in financial investments and is also a cryptocurrency investment expert. Bruce Fenton A current board member of the Bitcoin Foundation
Liam Robertson From ALPHABIT DIGITAL Patrick Byrne From OVERSTOCK
Information on investors is not disclosed on the official website. According to CYZone.com, Polymath raised $58.7 million in its angel round (investors unknown). In terms of institutional recognition, Polymath won the first prize awarded by Draper University at the Blockchain Impact Investment Summit held in Toronto in late September this year.
Stan Miroshnik is Polymath’s banking services partner. He was previously an investment banker at Morgan Stanley and has decades of experience in financial investments. Advisors include Anthony Diiorio, Founder of Jaxx and Ethereum; Bruce Fenton, current board member of the Bitcoin Foundation; Patrick Byrne from Overstock; as well as Liam Robertson from ALPHABIT DIGITAL. The advisor panel is pretty strong and can provide important insights and industry resources. However, we also noticed that none of the 33 team members and advisors are Chinese while the project has received support from some small Chinese exchanges. This could be an indication that Polymath’s funding team has Chinese people involved.
The Polymath team is staffed with experienced professionals from various industries such as blockchain, legal, and finance. However, there is not much information about its technical team members (members listed on the official website are mainly responsible for operations, legal services, marketing, community, products, etc.). We have also noticed on LinkedIn that, developer Boris Shevchenko, who joined Polymath at the beginning of 2018 left in September, has also served as founder and CEO of The Bureau Shevchenko since May 2015, indicating that some employees of Polymath are part-time. We recommend that Polymath disclose more information on the technical staff who have long been involved in the project development on Github.
|Executive Team||Solid background in management and entrepreneurship experience. Core technical staff have some development experience. Little information is disclosed.||30||15|
|Investors and advisors||Strong influence in the industry, highly correlated with Polymath’s business direction, can provide important insights and resources||5||4|
The Google search index for Polymath was under 50 in November 2017 and then maintained an average of 70 until March 2018. The index became stable after that and has showed an uptrend since September.
The 30-Day WeChat index was under 800 in August and early September 2018, but increased significantly in late September and October, with an average of over 3,000 and a peak of over 10,000.
Polymath has 31k followers on Twitter. The frequency and content of tweets are pretty good. The telegram group is very active, with more than 30,000 members. The number of daily active members is usually between 300-400 and reached a peak of over 1,000 in October, which is outstanding compared to other crypto projects in Q3. The interactivity has also increased on Twitter and YouTube in the recent month.
From the data from Google search, social media and community activity, the market’s attention and discussion of Polymath have increased significantly, especially within the Polymath community. There were interesting topics and heated discussions in the first half of October but declined slightly in the second half.
Polymath gained additional popularity in mainland China when it was listed on Binance. This promoted increased attention and discussion recently along with the STO concept. High popularity is a plus for this project in its rating.
|Social Media and Search Trends||High popularity, above average Google search index, medium interactivity||5||4|
|Community||Large number of followers, interactivity increases as market’s attention increases and begin to stabilize||10||8|
|PR Events||High update frequency on Twitter and other social media channels, lots of PR events||5||3|
According to an official announcement, the project team claims that the detailed Polymath roadmap has not been released in order to maintain the flexibility of the project direction. The Polymath team further addressed the roadmap issue in the following Reddit post:
The next milestone/goal is to release the first security token based on Polymath.
From the initial white paper and related information, we found an abstract roadmap issued during the crowdfunding period:
Network of Chains Milestones Plan Status Summer 2017 Minimal Viable Testing Environment Done Fall 2017 Minimal Viable Test Network Done Winter 2017, Spring 2018 Testing & Security Audits Done Summer / Fall 2018 Parallel Optimization
Done The Future Cluster Implementation Currently in this phase
Month Ranking Project Rating Popularity Number of contributors Release frequency Commits this month Commit type Market cap ranking July 68 Polymath Medium Medium High High 73 A1 88 August 69 Polymath Medium Medium High High 133 A1 113 September 69 Polymath Medium Medium High High 175 A1 100
Due to the lack of a definitive roadmap, but in consideration of the progress that Polymath has made on its project, our default assessment is “no delay.” Its code submission is above average on the Github Audit list and is relatively stable.
Overall, the success of Polymath relies on the widespread of adoption of securities token projects. Currently, the project has entered the ecosystem development phase. The ability to acquire high-quality STO projects will affect Polymath in the long run. Partnerships with top PE/VC funds may be a good way to get industry resources.
|Fulfillment tracking||No definitive roadmap, in the promotion phase after releasing ST-20 standard, on schedule according to the initial roadmap||2||1|
|Github Audit||Above average for several months on the Github Audit rating list||3||2|
|Progress||In the mainnet/full nodes phase||5||4|
|First dimension||Second dimension||Third dimension||Details||Judgement||Points|
|Project||Position 15%||Position 15%||Blockchain Solutions||Solution and services for security tokens||13|
|Competitive advantages 5%||First mover 2%||No, but has unique advantages||Solid user base, strong Innovation,Created ST-20 standard, project launched early||2|
|Innovative 3%||Very innovative||4|
|Necessity 15%||Is it Pain point 5%||Strong demand||High demand, Token incentive mechanism is replaceable||4|
|Token incentive 10%||Has token incentive mechanism||8|
|Team||Executive Team 30%||Team profile and project match||Match level is relatively high||Solid background in management and entrepreneurship experience. Core technical staff have some development experience. Little information is disclosed.||3|
|Software development experience 10%||Led a very successful software project||5|
|Operation expertience 5%||Has experience||4|
|Other industry resources 5%||Very experienced, has led a team before||3|
|Investors and advisors 5%||Level of influence 3%||Key figure in the industry||Strong influence in the industry, highly correlated with Polymath’s business direction, can provide important insights and resources
|Relativity 2%||Very relevant, can provide important insights and resource||2|
|Institution investors 5%||Institution investors 5%||N/A||N/A||N/A|
|Community and popularity||Social Media and Search Trends 5%||Popularity 1%||High||High popularity, above average Google search index, medium interactivity
|Search popularity 2%||High||2|
|Community 10%||Popularity 3%||High||Large number of followers, interactivity increases as market’s attention increases and begin to stabilize||3|
|PR Events 5%||PR Events 5%||Lots of PR events||High update frequency on Twitter and other social media channels, lots of PR events
|Adjustables||Fulfillment tracking 2%||Fulfillment tracking 2%||On schedule||No definitive roadmap, in the promotion phase after releasing ST-20 standard, on schedule according to the initial roadmap||1|
|Github Audit 3%||Github Audit 3%||Consistent code submitting, above average||Above average for several months on the Github Audit rating list||2|
|Progress 5%||Progress 5%||Has mainnet and nodes||In the mainnet/full nodes phase||4|
|First dimension||Second dimension||Third dimension||Details||Points|
|Transparency||Basic information||Whitepaper||Has whitepaper||1|
|Social media and communication channels||Has telegram and twitter as communication channels||1|
|Core team||Team’s records||Verifiable and very detailed (through LinkedIn, ITJUZI or other channels)||1|
|Full-time or part-time||Some employees are parttime||-1|
|Operation time||More than 1 year||2|
|Has an physical entity?||No||0|
|Change of team||No changes||0|
|Authenticity||Team members’ experience||Team members’ experience||Information is authentic||1|
|Industry resources||Industry resources||Industry resource is authentic||1|
|Marketing and PR||Marketing and PR||No exaggeration in marketing and PR||0|
|Fundraising and compliance||Fundraising rounds||Ratio of price in each round||Ratio is reasonable||1|
|Ratio of the total funding in each round||Ratio is reasonable||0|
|Lock-up||Team lock-up||No lock-up||1|
|Investor lock-up||No lock-up||-1|
|Budget disclosure||Budget disclosure||No budget disclosure||-1|
|Additional issuance||Additional issuance||Additional issuance within a reasonable range||1|
|Fund supervision||Fund supervision||Internal fund supervision||1|
|Compliance||Regulation||Unlikely to be regulated||1|
|Adjustable||Estimated market cap||Estimated Market cap||High||-3|