Polymath: 2020 Network and Revenue Data Report

Abstract

Polymath is a service provider company in the nascent security token/digital securities issuance market. This market aims to facilitate the tokenisation of assets, improve capital formation and aid in liquidity of regulatory compliant securities via digital ledger technologies.

Users of the services within the Polymath network pay by redeeming Polymath’s POLY utility token.

This data report provides performance of the Polymath network for the calendar year 2020 (January 1 — December 31, 2020). The report also contains reference charts since the WE.R.LIVE contract at the beginning of service production in 2018.

The data in this report only references network and revenue performance from the creation of ST-20 tokens, tickers and modules. This report does not reference other revenue received from white label activities or evaluate business and marketing activities.

Motivation

The motivation for this data report stems from the following:

  1. End of the calendar year 2020.
  2. Revenue and volume performance since service pricing changes began on Dec 2, 2019.
  3. Ongoing observation of Polymath performance vs. marketing message.

This report is not intended to be interpreted as financial or legal advice. It is for informational and educational purposes only. The review is an account of blockchain activity. See the Appendix at the bottom of the report for more details and issues.

Executive Summary

Performance since WE.R.LIVE ST-20 contract creation July 30, 2018 — December 31, 2020:

  • Total amount of recognizable revenue for ST-20 creation and management via POLY redemption: ~ $61,414.48
  • Total For-Fee Template purchase revenue: ~ $32,599.56
  • Total Ticker Symbol Reservation revenue: ~ $15,836.79
  • Total ST-20 Contract creation revenue: ~ $12,978.13
  • Total number of Ticker Symbols reserved: 380
  • Total number of ST-20 Contracts created: 204
  • Ticker Symbol to ST-20 contract conversion rate: 53.7%
  • Total number of For-Fee STO Templates purchased: 9
  • Total number of POLY tokens redeemed: 1,048,000

Year 2020 ending December 31, 2020:

Total Revenue

  • $15,481.38 recognizable revenue collected for the year ending December 31, 2020.
  • This is down -8.3% from 2019 ($15,668.15).

Tickers Symbol Reservation

  • $3684.56 in Ticker Symbol Reservation recognizable revenue for the year ending December 31, 2020.
  • This is up +7.8% from 2019 ($3,416.49).
  • 36 tickers created in 2020. This is a -79.8% decline from 2019 (178).

ST-20 Contract Creation

  • $7,597.58 in ST-20 Contract Creation recognizable revenue collected for the half year ending December 31, 2020.
  • This is a +293.38% increase from 2019 ($1,931.34).
  • 22 ST-20 contracts created in 2020. This is a -80% decline from 2019 (110).

Modules

  • $4,199.24 in revenue for fee modules attached to any ST-20 contract this year ending December 31, 2020.
  • This is a -59.3% decrease from 2019 ($10,320.32).
  • 3 — modules were added to one existing and two new ST-20 contracts respectively during 2020.

POLY Token

  • The POLY token reached its all time low (ATL) value of $0.0107 on March 13, 2020.
  • The POLY token hit a value of $0.09 on December 31,2020.

Analysis

2020 ends with Polymath, the token, riding the BTC wave and Polymesh, the blockchain, on deck. Yet, the sharp and persistent decline in usage of the Polymath Network continued unabated by the POLY token price or new technology FOMO.

The pricing structure created in December 2019 on Polymath v3.0 service and network usage has been in place for an entire year. Both ST-20 contracts and ticker reservation usage is down ~ 80% from 2019. However, revenue is almost on par with 2019. This shows how dramatic in effect the increase in service pricing was relative to the steep decline in service user. Ultimately, whether 2019 or 2020, the total amount of revenue pays for maybe a day’s costs.

The pricing changes have resulted in significant downward usage of the Polymath platform whereas the number of POLY redeemed to access the network’s services has increased.

The token is riding both ends of the BTC wave in 2020. The POLY token has seen significant increases from its all time low of $0.01 in March.

The usage drought for the two for-fee STO template modules continues with only 3 purchased in 2020.

POLY token redemption rates have never been able to keep up with new POLY automatically added at scheduled intervals to the overall network supply. The new service pricing has significantly increased the amount of POLY required to redeemed. Unfortunately, the volume is so low that it has limited material effect.

Polymath expects exciting things to occur in 2021 with the launch of a new blockchain: Polymesh. Although still available, it is expected that the Polymath Network v3.0 will not be the option of choice for future customers. The new chain will incite lots of activity in the 1h/2021 including a migration of the ERC-20 POLY token to the native Polymesh POLYX token and migration of ST-20 contracts to native Polymesh security tokens. Looking forward to the new wares.

The Polymath Network Contracts

Activity reported is from the Ethereum Mainnet from the Polymath Network Core 1.x.x, Core 2.1.0 and Core 3.0 platforms.

There are 16 contracts in the Polymath Network Core 3.0 available on both the Ethereum Mainnet and Kovan (test) networks.

The basic workflow of using the Polymath network to create and manage a ST-20 contract:

  1. Create an Ethereum ticker symbol reservation. This is a 60 day temporary reservation of the ticker symbol. If not used against a ST-20 contract after 60 days, the symbol becomes available for anyone to use.
  2. Create a ST-20 contract.

After creating the contract, the basic workflow is complete. However, the service user has the option to apply a number of modules that make the security token more functional.

These modules are Solidity programming methods that give ST-20 contract owners more options when conduction their STO or managing their security token’s life cycle.

Ticker Symbol Reservation Volume

Total number of ticker symbols reserved per month during 2020: 36.

Total number of ticker symbols reserved per month since the first WE.R.LIVE ST-20 contract on July 30, 2018: 390.

ST-20 Token Contract Creation Volume

Total number of non-test ST-20 contracts created per month during 2020: 22.

Total number of non-test contracts created per month since the WE.R.LIVE ST-20 contract on July 30, 2018 through December 31, 2020: 204.

POLY Token Redeemed Revenue

Revenue may be recognized when the POLY utility token is redeemed as payment to access a service on the Polymath network. Revenue is assumed recognizable against deferred revenue from the Polymath SAFT fund raising event.

In this report, the token value is determined by the close of day value of the POLY token.

When redeemed to pay for ticker symbol reservation, ST-20 contract creation and module support, the POLY token is removed from the circulating pool of tokens on the blockchain.

Ticker Symbol Reservation Revenue

Total amount of recognizable revenue from ticker symbol reservation per month during 2020: $3,684.56

Total amount of recognizable revenue from ticker symbol reservation per month since the WE.R.LIVE ST-20 contract from July 30, 2018 through December 31, 2020: $15,836.79.

The below chart represents the market price of a ticker symbol reservation up to December 31, 2020. The spike at the end of 2019 is from the new POLY service fee increase. The spike in April 2020 is due to an increase in the market value of the POLY token.

ST-20 Contract Creation Revenue

Total amount of recognizable revenue from ST-20 contracts created per month during 2020: $7,597.58

Total amount of recognizable revenue from ST-20 contracts created per month since the WE.R.LIVE ST-20 contract through December 31, 2020: $12,978.13.

The below chart represents the market price of a ST-20 contract over time up to December 31, 2020. The spike at the end of 2019 is from the new POLY service fee increase. The spike in May 2020 is due to an increase in the market value of the POLY token.

STO Template Use Revenue

There was $4,199 in STO Template revenue in 2020.

Total amount of recognizable revenue from template (6 Capped STO, 3 USD Tiered) use per month since the WE.R.LIVE ST-20 contract from July 30, 2018 through December 31, 2020: $32,599.

POLY Token Redemption Rates

The Polymath network requires the use of the POLY token to pay for the network’s services. POLY tokens are removed from the circulating supply of 749,365,660 tokens. A total of 1,048,000 have been removed from the circulating supply through ticker reservation, ST-20 creation and module purchasing since July 30, 2018.

New pricing changed the amount of POLY to use the network starting Dec 1, 2019.

The Polymath network fee schedule as of December 31, 2020:

  • (Pre-Dec 1st price 250) 2,500 POLY to reserve a ticker symbol
  • (Pre-Dec 1st price 250) 10,000 POLY to create the ST-20 token contract
  • (Pre-Dec 1st price 20,000) 50,000 POLY for the ‘CappedSTO’ template
  • (Pre-Dev 1st price 100,000) 150,000 POLY for the ‘USD Pegged to Fiat STO’ template

Ticker Symbol Reservation POLY Redemption

Total amount of POLY tokens removed from the circulating supply from ticker symbols reserved per month during 1h/2020: 220,000. The amount in POLY tokens for a new ticker went up by 10x on Dec 1, 2019.

Total amount of POLY tokens removed from the circulating supply from ticker symbols reserved per month since the WE.R.LIVE ST-20 contract from July 30, 2018 through December 31, 2020: 182,750.

ST-20 POLY Redemption

Total amount of POLY tokens removed from the circulating supply from ST-20 contracts created per month during 2020: 130,000. The amount in POLY tokens for a new ST-20 went up by 40x on Dec 1, 2019.

Total amount of POLY tokens removed from the circulating supply from ST-20 contracts created per month since the WE.R.LIVE ST-20 contract July 30, 2018 through December 31, 2020: 265,250.

STO Template POLY Redeemed

There were 220,000 POLY tokens redeemed for template use purchases in 2020. The amount in POLY tokens for a new Capped and USD template went up by ~2.5x and 1.5x respectively on Dec 1, 2019.

Total amount of POLY tokens removed from the circulating supply from template use purchases per month since the WE.R.LIVE ST-20 contract July 30, 2018 through December 31, 2020: 600,000.

Modules & Templates

Accompanying the ST-20 contract are 13 modules that ST-20 owners can apply to their security token. Use of modules demonstrates the intensity at which its ST-20 contract owners interact with their security. In effect, these modules are features that enable various types of functionality.

Of all the modules, only one appears mandatory for each ST-20 contract: GeneralTransferManager.

Of all the ST-20 contracts created to date, only 9 non-mandatory modules have been utilized. Module use can be found in the event log of each ST-20 contract or in the log of the contracts of each module. The below list includes all non-test ST-20 contracts found in the Polymath Network v1.3, 2.x and 3.0 module contracts.

Appendix

Change Log

The change log captures major changes to the article since publication.

  • March 15, 2021 — Published

Data Sources

The data sources to conduct this analysis originate from the following:

  1. Polymath Core service 1.x.x contract address.
  2. Polymath Core service 2.1.0 addresses.
  3. Polymath Core service 3.0 addresses.
  4. Polymath Core legacy addresses.
  5. Individual ST-20 contract addresses.
  6. Polymath Service Fees.
  7. Polymath POLY Token Distribution.
  8. Polymath Circulating Supply.

Tools

  1. Etherscan.io

Constraints

  1. The data may be incomplete and contain errors. It is sourced without the assistance of the ST-20 contract owner or Polymath.
  2. There may be rounding errors in % of or $ value totals.
  3. There may be missing ticker, ST-20 contracts, module templates from the data set thus under representing all totals.
  4. The exact intention of the contract owners is unknown. Both Polymath and any third party evaluating the data may have no information describing what contract owners intend(ed) to do. Intention may be inferred from information within the contract address (dates, wallets, tokens, transaction activity, marketing, etc.)
  5. How Polymath recognizes revenue is not exactly known. However, due to the nature of the network, capital fund raise via SAFT and POLY utility token to pay for services, a deferred revenue model is assumed.

Metrics

This review evaluates the following metrics:

  • Ticker symbol and ST-20 contract creation date

Date the ST-20 token contract was created on the Polymath Core v2.x.0 and v3.0.0 Ethereum Mainnet contracts. This includes contract upgrades from Polymath Core v1.x.x that occurred in the November 2018 time frame. This upgrade makes it appear as if there was a large number of contracts created all at once. This is not the case. Most of the November contracts were created prior to November 2018. Polymath now has 2 versions of contract in production. The latest version 3.0 is not upgraded automatically. The contract owner is required to perform the upgrade.

  • Quantity of ticker symbols and ST-20 contracts

Number of ETH ticker symbols and security tokens produced on the ETH blockchain within month, quarter, etc.

  • Number of POLY token redeemed

The number of POLY token redeemed demonstrates how the market is removing the tokens from the network through use of the Polymath Network.

  • Number of wallets

Number of wallets in the ST-20 token contract that contains ST-20 tokens. The number of wallets represents the number of individual entities holding tokens in the wallet. A low count indicates a low number of investor participation within the security.

  • Number of tokens

In this review, the number of tokens is not considered. The impact the number of tokens has in contract is difficult to gauge without having knowledge about how the issuer intends to use the tokens. This, along with closure that states a milestone has been met, like the close of a fund raise.

  • Token transactions

There are few token transactions in the data set. Transactions accounting in this review is limited to the Polymath Core contracts on the Ethereum Mainnet.

  • Modules

Polymath offers its ST-20 contract owners numerous modules to help better manage the security token offering and life cycle. Modules are simply code functions or methods added to the contract and executed when applicable. Modules use is derived from entries in a ST-20’s event log.

  • $ revenue from contract creation

Values are a combination of the service fees published by Polymath as described here plus the Close $ value of the Poly token found in Coin Market Cap’s historical data range for any of the services on the date of creation.

Ethereum GAS costs are not factored into the revenue models or assumed costs to the service user.

The $ value of the POLY token and service costs is different on any given day.