As someone invested in the POLY token for a while and followed the project closely since December, I decided to make a post of how the Polymath team slowly backed away from the utility of the POLY token, robbing early buyers of the token to fund their (admittedly, very elegantly coded and overall awesome - thats the last good thing I'll say) STO platform.The reason for originally investing in the POLY token was simple... because I recognized Security Tokens as the future and their White Paper mentioned that the Polymath platform would make it extremely easy to launch an SEC compliant STO token. Also in section 7 of the whitepaper was the POLY token utility, where it was described as a national currency and the Ethereum of STOs"POLY token allows value created in the system to be captured by the systemitself. Just as almost all countries have their own currency, requiring thesetransactions to be in POLY sets up incentives to remain in the system. If alltransactions were in ether (the native currency of Ethereum), then participantswouldn’t be storing value in the Polymath platform. By requiring that peoplehold (and transact) in POLY, participants become subject to the same forces ofincentivization that have helped ecosystems like Ethereum (and many so called“alt-coins”) explode into active and diverse communities so that their productscan remain viable and useful."The WP link is archived here - https://ift.tt/2NAEW4L archived it since Chris Housser their co-creator and Graeme their VP of marketing like to delete a lot on the PolymathNetwork subreddt.At this point, I think it's important to consider context - it was December 2017, peak FOMO and ICO craze, and they're comparing Polymath and STO issuance to Ethereum and ICO issuance. They are very clear that not only is POLY the "required" token of the network, but that the system would have incentives similar to Ethereum. I note this because they are not just talking about "fees," otherwise the comparison would be to GAS or GWEI. Like ICOs on ETH, the expectation is clear - POLY tokens will be needed to issue STOs.Last month came an announcement that 6 STOs would soon launch on the network, but 5 of them would be raising funds in BTC, ETH, and fiat (not even a POLY options), and only 1 would have POLY as an option in addition to ETH.When challenging this as a point of deviation form their White Paper in a recent and now-deleted post on Polymathnetowrk subreddit https://ift.tt/2DlxKok I was told that was never the case and that my reading comprehension of the white paper was wrong.In this now deleted post, Chris Housser speaks out of both sides of his mouth by trying to claim to me that "The rules have never changed" in regards to allowing funds other than POLY be raised, that it has always been that way. However, he also debates with another user that "constant changes" should be accepted and compared building Polymath to building Rome. So did it stay the same, or did market realities cause them to make an unannounced change? He can't keep it straight.Digging deeper, I looked into CORL, their first announced STO. Way back in December their partnership was announced, and in February they announced that the STO offering would take place in March or April. Due to the bear market, they delayed it https://ift.tt/2Ny1l2H if the STO was originally scheduled for March, and "allowing" other funds be used for Security Token issuance, that would be one thing and acceptable had it been transparent and explained. Perhaps some honesty and a mitigating token burn or delay of their massive POLY token inflation (280K current supply, so 720K being released in the next year) would be enough.The problem is that their GitHub reveals that issuance funding only allowed ETH until June 18th, when they FINALLY allowed fundRaiseType to also be in POLY. So this deviation from the White Paper happened a long time ago, even before the bear market or "market realities" would inform them otherwise. https://ift.tt/2DoctdU Chris's claim to me that "the rules never changed" were true, then why was the fundRaiseType parameter updated? If his "accept constant changes" comment were true, then it would be the other way around - POLY coded in first and then ETH. So neither of his contradictory explanations are true.Ok, so lets ignore all context for now and say fund issuance was never a form of utility for POLY. They very clearly say it is "Required" for "all transactions." If fund issuance isn't a transaction (try raising funds in yuan in USA and tell the government that isn't a transaction of any kind, by the way), there are still KYC fees which is extremely explicit in the White Paper that those will ONLY be transacted in POLY. Notice how that question never gets answered in the above deleted post, and the post is deleted right after the question is asked?Since PolyMath won't answer the question, I asked BlockEstate, one of their STO partners. Not only did they confirm POLY isn't accepted for their STO, but KYC fees are "details still being worked out." What is there to work out if transactions are definitely in POLY, as vehemently assured by the Polymath team? https://ift.tt/2Nu5Yed also notice, hilariously, that 7pass another STO isn't accepting POLY, but are accepting Bitcoin Cash and Ripple.Polymath had the first mover advantage, a HUGE facebook marketing campaign and the opportunity to ignite the next alt-season by sticking to their guns, their original promise and requiring their POLY token be the exclusive/required token of their platform.Unfortunately, like so many new businesses, they succumbed to "reasonableness." They hyped up their platform and their POLY token by comparing it to ETH at the height of the ICO and FOMO bubble, and now are acting like "we always were planning on POLY to be a completely superfluous token" which is what a lot of us would say if we were caught in the middle of borderline if not outright fraudulent behavior.So maybe nothing happens, and investors like me helped them pay for their platform that they get to profit off of for free. Ok fine, whatever. We're not the first or last to get burned by a token.BUT, I want to ask TO ANY PROSPECTIVE STO ISSUERS OR POLYMATH PARTNERS - if they so easily and obviously changed the rules on those who first supported the project, how can they possibly convince you to issue on their platform? They'll just change the rules on you too if it means getting a bigger STO partner and they'll tell you it's your fault you never understood them.If anyone else was duped by this project and subsequently banned from their subreddit for noticing it, feel free to comment here
Submitted September 23, 2018 at 11:12AM
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