Why a securities specific blockchain is needed, explained


A successful securities-specific blockchain fills all gaps in the current Ethereum architecture by providing efficiency, automation and transparency.

Aligning a functioning blockchain with the needs of modern capital markets will require solutions to governance, identity, compliance, confidentiality and settlement. To address these gaps, Polymath has spearheaded the creation of Polymesh, an institutional-grade, public, permissioned blockchain built specifically for regulated assets. In practice, the platform aims to address these five challenges by:

  • Requiring users to validate their identity with a verified service provider when they are initially onboarded
  • Automating the compliance of assets in a transparent and real-time manner to simplify their reporting and remove the need for complex systems 
  • Implementing a confidential transaction workflow that allows cryptographic proofs to be safely mixed with off-chain declarations.
  • Operating under the governance of a main council and a set of specialized sub-committees 
  • Addressing the probabilistic finality that currently prevents the technology from acting as a golden ownership standard

Taken together, a securities-specific blockchain will address these five key gaps that exist in Ethereum’s architecture. A securities-specific blockchain will also provide increased efficiency, automation and transparency to capital markets in general. These three factors will act as significant improvements in bringing down the costs and time for existing asset classes and processes. The result will be lower fees, new investable asset classes, more exciting options for investors.

Polymesh launched on Oct. 28, 2021, following a successful incentivized testnet with more than 4,300 users. Users can now use the chain to create, issue, and manage security tokens as well as participate in on-chain activities like governance and staking.  

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