Security Token Startup Polymath Locks up 75 Million Tokens

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Despite chilly market conditions, one startup is locking up approximately $9 million worth of its tokens for five years.

Polymath, a company best known for advancing the idea of security tokens, revealed to CoinDesk that it is locking up 75 million of its POLY tokens.

"What we are demonstrating is that our treasury is healthy and we don't have a need for these tokens at this time."

Polymath raised $58.7 million using a simple agreement for future tokens in January 2018, according to a filing with the SEC. According to Housser, 74 percent of the locked-up tokens will come from those designated for the company and 26 percent will come from those designated for the founders.

Per the terms of POLY's smart contract, tokens are released for use periodically through 2022, but the team is redirecting part of these to a new smart contract that will hold them until January 1, 2024.

Users spend POLY tokens on the Polymath platform during the process of launching new security tokens.

The company says 75 tokens have been created using the platform so far.

Limiting token releases or treasury payouts has been viewed positively by the industry.

Blockstack has taken a similar path in locking up tokens - though it took a milestone, rather than time-based, approach.

The Beijing-based team building the Nebulas blockchain announced last August that it locked up founders tokens for a decade, though it subsequently laid off 60 percent of its staff.

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