IOHK and Polymath Partner Up for First Security Token Blockchain
Input Output Hong Kong (IOHK), the company behind Cardano and the Ouroboros protocol, are launching the worlds first security token blockchain alongside security token issuance platform Polymath, as announced on May 13, 2019, at Consensus. This blockchain will be the first of its kind with Hoskinson as the chief architect.
Tokenization Takes a Step Forward
After the recent announcement of a blockchain framework for Ethiopia, Charles Hoskinson and his company IOHK are already working on their next mission – a security token blockchain to further their goal of tokenization.
The platform will be called ‘Polymesh’ and will be the first-ever blockchain designed to run a security token. Most security issuances are done on platforms like Polymath; they never build their own blockchain for it. With the introduction of Polymesh, the dream of tokenization real-world assets has taken a giant leap.
This kind of product is not suited for launch on any existing smart contract platform like Ethereum or Tron because of the legal obligations that come along with a security token. Whilst Ethereum has successfully implemented token launches on its blockchain through the ERC-20 and ERC-721 standards, the platform doesn’t have the capability to integrate necessary compliance measures for a security.
Polymath has issued all of its STO’s on the Ethereum blockchain and believes the lack of compliance is a key reason for adoption not picking up. Polymesh is being built from the ground up to enable regulatory considerations and the needs of global capital markets.
Tokenized Assets Must Pick Up
After an Estonian startup started to tokenized FANG stocks on the Ethereum blockchain, there have been no major breakthroughs in tokenization.
Tokenization of real-world assets has a plethora of benefits – from increased fungibility to speed of transfer, the entire process can both reduce costs and make customers lives easier.
Despite the revelation that it won’t be a purely public network, it will still remain a permissionless ledger with Hoskinson stressing the need for a blockchain akin to this in an open financial system. Both IOHK and Polymath believe that Polymesh can become a world standard for fundraising and equity issuance in the global ecosystem.