In today's rapidly developing financial technology field, security tokens, as an emerging cryptocurrency, are gradually becoming the focus of the market. Security tokens enable holders to obtain fractional ownership of a cryptocurrency platform and are designed to mirror the functionality of ownership shares and certificates used in traditional financial instruments. However, while the concept may seem simple, there are actually many challenges associated with implementing and continuously managing security tokens on a typical blockchain. Against this background, Polymesh (POLYX), as a blockchain platform focused on the issuance and management of security tokens, is providing unprecedented opportunities.
Core features of Polymesh
Polymesh is a public permissioned blockchain focused on secure token management and the entire life cycle of transactions. The platform provides a unique environment for cryptocurrency operators, startups and investors, facilitating the tokenization and trading of securities. Its main functions include:
Fork-proof governance model: ensures that legal ownership of security tokens is not affected.
User identity authentication: Ensure the authenticity of participants’ identities and comply with regulatory requirements.
Automated compliance procedures: Simplify securities lifecycle management and reduce manual operations.
Transaction confidentiality: Protect user identity and ensure transaction privacy.
Near-instant settlement: greatly improve transaction efficiency and shorten settlement time.
How Polymesh works
Polymesh operates based on a block verification model called Named Proof of Stake (NPoS) and is supported by multiple verification nodes operated by licensed financial entities. All participants must pass identity authentication to ensure the legality and compliance of transactions. The platform is designed so that users can freely access and view network activity, but actual participation requires authentication.
On Polymesh, all transactions require approval by at least two-thirds of the validating nodes before the proposed block can be written to the ledger. This mechanism not only improves the security of transactions, but also enables efficient transaction finalization times, completing within 6 seconds on average.
Polymesh’s goals and vision
Polymesh was created to address the shortcomings of traditional blockchains in secure asset management in digital or traditional markets. In 2017, blockchain experts Trevor Koverko and Chris Housser founded Polymath, and in 2019 they launched Polymesh, a dedicated blockchain. The platform’s core goals are to tokenize real-world assets (RWA) and facilitate the onboarding and management of digital securities.
As Polymesh has grown, it has become the second largest cryptocurrency by market capitalization in the RWA market and provides investors and issuers with secure and efficient solutions.
Analysis of the main functions of Polymesh
Governance: Polymesh’s governance model is designed to eliminate the risk of network forks. The platform’s governance mechanism consists of key governance committees that review system improvement proposals submitted by users and ensure the stability and security of the network. This mechanism not only protects the participation rights of ordinary POLYX holders, but also prevents potential legal and tax challenges.
Authentication: On Polymesh, all users must go through a two-step authentication process. While this requirement may seem overly onerous to blockchain purists, in the regulated securities world, identity authentication is key to ensuring compliance.
Compliance
Polymesh simplifies the securities compliance process through smart contracts and allows users to pre-design custom compliance rules according to relevant regulations, further improving the automation and efficiency of compliance management. This feature makes security lifecycle management of issuance, sales and transfers more efficient.
Confidentiality: Polymesh implements a privacy-centric protocol based on zero-knowledge (ZK) proofs to protect users’ identity information. Although users need to pass identity authentication, their online identities are effectively protected during transactions, achieving a seamless blend of compliance and confidentiality.
Settlement: Polymesh’s settlement mechanism enables parties to financial transactions to quickly determine terms and settle. Compared with many blockchain platforms that require hours or even days for transaction settlement, Polymesh's transactions can be completed within 6 seconds, significantly improving transaction efficiency.
The role of POLYX token: POLYX is the native protocol token of Polymesh, which is mainly used to pay handling fees and issue new security tokens. All operations related to security tokens involve the use of POLYX tokens. In addition, token holders can also participate in the governance of the platform and obtain rewards through staking.
in conclusion
Polymesh (POLYX), as a blockchain platform focused on security tokens, is working to solve multiple challenges existing in traditional financial markets. Its unique design and functionality make it ideal for investors and issuers, and paves the way for future fintech innovation. As the market develops, Polymesh will undoubtedly play an increasingly important role in the management and trading of security tokens.