The Race to to be the Next STO Platform. Poly VS CHX VS DUSK

As the apparent “death” of ICOs seems to be inevitable, the race to Security Token Offerings seems to be at its peak now. This seems to be the only logical fund raising mechanism for the future as it is the only one that provides investors with Security Tokens as opposed to the utility tokens that have been issued during ICOs. A decent read on the difference between Security Tokens and Utility Tokens can be found here.

In this piece I will be comparing a the following projects who are aiming to be the native platform to launch Security Tokens:

• Polymath
• OwnMarket
• Dusk Network

Polymath

Polymath enables trillions of dollars of securities to migrate to the blockchain. It was one of the first projects to take this issue and aim to be the platform for STOs.

According to to ICODrops, Polymath raised more than $200m which is an insane number to raise. It is still not very clear on how the project stands. With the amount of money raised, one would expect many STOs to be up and running on the platform by now. Unfortunately, that is currently not yet the case. This leaves the space open for other projects as well.

Another problem with Polymath is that it is based on Ethereum. That is specially an issue for Securities as STO regulations will require privacy. This obliges them to have the transfers validated either through a smart contract or through a validator which Polymath calls a Proxy which keeps security registries off-chain (centralization?). This can be seen in the Polymath architecture below

Due to this centralization issue, if Polymath gets hacked/liquidated/bankrupt, what happens to this centralized infrastructure?

Polymath is currently trading on many exchanges. Those include Binance, Huobi, Bittrex, and Upbit

OwnMarket

OwnMarket has reached out and some of the details below have been adjusted as per the team clarifications! Apologies for the errors mentioned earlier. Thanks to the team for clarifying things!

OwnMarket is another platform aiming for that number one spot for STOs. The company is a rebrand from the original name Chainium which is an ICO that raised $3.35m around 8 months ago. In those 8 months the company saw decent growth after it’s market cap dropped to $730k. The company managed to grow back to a marketcap of $2.8m. The development progress seems to going well as they’re aiming to release the mainnet at the end of the year or at Q1. They are planning on having 2 Chains eventually:

• Permissionless public blockchain, storing account holdings and asset transfers.
• Permissioned private blockchain, storing sensitive data like asset holder names.

The Blockhains will be written from scratch with equity management in mind.

In complete honesty, initially I thought that there will be one permissioned chain which was an immediate turnoff to me personally. It is definitely better than I initially thought. I am still a little disappointed in having a permissioned blockchain (Neo and their problems come to mind here), but I guess that is what the team saw to be fit.

The team also shared an image of how the architecture looks like

Besides that, the company has a team with decent experience and are doing well in terms of development (or so they claim at least). One small worrying aspect is that they raised only $3m which makes listing for them quite difficult on exchanges. They’re currently on IDEX and HitBTC.

Dusk Network

The final project that I will discuss here is my personal favorite which is Dusk Network. Unlike the other projects, Dusk seems to be the only platform that is planning to do everything onchain and therefore sticking to the principles of decentralization.

This means that the network WILL NOT need centralized components which means that elements of hacking/bankruptcy/liquidation dont really come into play here. Because of that, Dusk Network offers third parties a more efficient way of issuing tokens at a fraction of the cost (since there are no middlemen involved in the process unlike the other projects).

This also allows Dusk to start something that none of the other projects can, which is a regulated security decentralized exchange (DEX). Their recent partnership with Switcheo can come in very handy in this process as Switcheo already runs a DEX for utility tokens at the moment.

Another encouraging aspect is the continuous support the project keeps getting from several entities. Several advisers have been announced and all seem to have great influence over the industry. The project also managed to be the first project to partner and be incubated by Ethfinex/Bitfinex which helped the project acquire a free listing on the two platforms. You can get involved in the raffle for the token sale on Ethfinex here.

The only negative I see with Dusk is that they need to deliver on their promises. In terms of development, the project is behind the other two projects at the moment. In a way I can understand this since they are building a completely new chain with a completely new mechanism. Still, that might be a hurdle to their success in case they are not the first ones to reach the finish line. I am however willing to take my chances betting on their product.

Overall, the platforms are all racing to deliver the best product. My personal opinion on the three platforms is clear. I am generally against centralization and if Dusk delivers on their promises, then they are easily my favorite pick for the race.

Polymath seems to be the worst of the lot in terms of centralization. Most of the process seems to be centralized. OwnMarket definitely is an improvement to Polymath but there is still some sort of “centralization feel” to it due to the permissioned chain as well as the fee required to launch the STO. I still highly prefer them to Polymath nonetheless and their progress in development with the small amount they raised is an encouraging breath of fresh air for sure. The team was very cooperative in explaining some of the points as well which is something I personally appreciate.