Polymath, the securities token platform, and Loopring, the decentralized exchange protocol, announce a successful peer-to-peer test trade of ST-20“security” tokens through Loopring protocol smart contracts.
Polymath and Loopring demonstrated that an authorized trade of ST-20 security tokens was able to execute, while an unauthorized trade of ST-20 security tokens was not able to execute.
ST-20 tokens can only be held and traded if certain criteria are met. To hold ST-20 tokens, wallet addresses must be added to a “whitelist” controlled by the token issuer, and tokens can only be traded if the protocol determines there are no restrictions currently in place (buy or sell lockups, for example).
ST-20 security tokens created through Polymath are therefore able to maintain regulatory compliance even when traded peer-to-peer utilizing a decentralized exchange protocol such as Loopring.
Technical details:
One of the promises of a tokenized future is the ability for counterparties to connect and efficiently exchange all types of value — such as money, digital resources, and securities.
Blockchain-based securities enable a foundational shift in the life-cycle of traditional financial assets, as well as a completely new design space for blockchain-native securities.
Of the many benefits tokenization offers, the Loopring team feels that two of the most exciting are:
1) Asset Interoperability — assets being able to speak with/flow across the entire Ethereum ecosystem, and
2) Programmability — being able to code bespoke securities logic and jurisdictional considerations.
Ultimately, these benefits filter down into more liquid markets for issuers and investors. With this in mind, platforms like Polymath aim to enable the creation of trillions of dollars worth of securities on the blockchain, while Loopring seeks to allow these securities to move fluidly in a non-custodial, global, and perfectly auditable manner.