Charles Hoskinson appears to be a busy man in cryptocurrency.
In addition to being one of the original co-founder’s of second ranked cryptocurrency Ethereum, Hoskinson is the founder of Cardano (ADA) and CEO of Inside Outside Hong Kong (IOHK). Now, the prolific crypto developer has announced a partnership with Polymath to launch the world’s first security token blockchain.
The project was announced at the Consensus 2019 event on May 13, and will be named “Polymesh,” marking a joint collaboration between Hoskinson as co-architect and the world’s leading security token platform. Polymath has previously issued security coins as ERC-20 tokens, building on the framework of Ethereum’s blockchain. As opposed to utilizing an existing network currency such as Ethereum or TRON, the Polymesh project will see the creation of a standalone token, constituting the world’s first security token blockchain.
Hoskinson and Polymath see the project as a way to further the tokenization of securities, an issue that has seen stagnate adoption thus far largely due to compliance issues. Speaking with Rachel Wolfson at Forbes, Polymath co-founder Trevor Koverko explained the new venture’s outlook,
“Polymesh is a new security token layer one blockchain. It is purpose built, since security tokens have unique needs and characteristic that demand a specific foundation. Ultimately, we want to marry issuers, investors and regulators together, which is what the layer one architecture is designed to do.”
Polymath explained that while ERC-20 tokens have been serviceable thus far, Ethereum is not equipped for handling the regulatory and compliance hurdles associated with tokenized securities. By building a proprietary blockchain and token, Polymath invisions PolyMesh becoming the framework technology to drive global markets, imparting the efficiency and advancement of cryptocurrency to do so.
Hoskinson also gave an update on his role in the project, and explained motivations stem from the excitement of tackling a ‘quadrillion’ dollar market,
“After co-founding Ethereum and Cardano, two of the most widely used blockchains in the world, I am looking forward to working on Polymesh. There are quadrillions of dollars of financial securities, and building a blockchain to secure them is an incredibly exciting task.”
The Cardano founder further explained the need for differentiation in cryptocurrency and security tokens. While cryptocurrency, such as Ethereum, may operate optimally in an open system, Hoskinson argues that security tokens require more nuance in order to achieve usable scalability,
“Security tokens are data intensive protocols, which means operating costs will be high, and this won’t scale if we are talking about millions of securities, which we will eventually see. Moreover, things need to be done that you wouldn’t want to be done on Ethereum, like freeze or reverse transactions. So we are at odds with the standard Bitcoin ethos here.”
Polymath claims that while PolymMesh will not function as an entirely open system, it’s not going to be a private network blockchain that relies upon permission. Instead, Hoskinson is referring to the project as a “hybrid network,” which layers multiple systems together, allowing for the blockchain to operate in a framework with restrictions and the potential for augmentation.
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