A form of blockchain fundraising called an Initial Coin Offering (ICO)
has existed since July 2013. Over the last two years, the ICO model has
been used by hundreds of organizations to raise more than $3 billion USD.
Government agencies are now analyzing the securities implications of this
non-traditional form of financing, with potential consequences for ICOs
that violate securities laws.
In this paper we present Polymath, a protocol to facilitate the primary
issuance and to restrict the secondary trading of blockchain security to-
kens. Polymath uses a blockchain-based protocol that provides a suite of
tools to coordinate and incentivize participants to collaborate and launch
financial products on the blockchain.
By creating a standard token protocol which embeds defined require-
ments into the tokens themselves, these tokens can only be purchased and
traded among verified participants.