How to create a Security Token Offering (STO) using the Polymath Blockchain platform
Equity is one of the most crucial instruments in the world of finance and economy. Stock exchanges across the globe serve institutions to launch Initial public offering (IPO) to raise funds. Likewise, stock exchanges enable the general public to buy stocks online.
As the blockchain space scales up, an initial coin offering (ICO) becomes an ultimate instrument to raise funds. However, ICO was not a viable option to replace traditional stock exchanges, so Polymath introduced an innovative solution to combine blockchain and equity markets.
Polymath network offers a blockchain-based platform where institutions can launch security tokens to raise funds. Similarly, people can invest in their preferred companies and businesses by buying their security tokens. More importantly, all transactions on Polymesh comply with SEC’s regulations.
Let’s explore how to create a security token offering using the polymath blockchain platform.
Testnet is the gateway
Before launching your STO on the main-net, it is best to try the test-net. That way, you can experience the process and pass the learning curve before issuing your token on the Polymesh Main-net.
Polymath Testnet requires a Metamask wallet to launch an STO. So, if you don’t have one, create an account before initiating the STO process. Once you create a Metamask account, you need to fund the account with Test-ETH.
Remember, you have to drop your ETH wallet address in the faucet to receive your Test-ETH. See the relevant links below:
- https://metamask.io/
- https://gitter.im/kovan-testnet/faucet (drop-in your ETH address to get the Test-ETH)
After loading your wallet with Testnet ETH, you can set up and launch your STO in the Polymesh Testnet.
Register your Token Name & Symbol
Enter the Polymath token by clicking this link https://tokenstudio.polymath.network/. Sign in to Metamask wallet, enter your name and Email ID, click the checkboxes and click on “Create Account. Again, you’ll have to sign on using the Metamask Wallet.
On the next page, you’ll be able to register your token Symbol. After keying in your Token name and the Symbol, click on the “Reserve Token Symbol” button, and you’ll be asked to verify the details.
Upon confirming the details, the system will send a verification mail to your registered mail Id. Once you click the verification link sent to your mail ID, your token name and the Symbol get registered and synced to your mail and ETH wallet address.
Choose your Support Team
You have just registered your Token name & Symbol. Next, you have to choose the KYC/AML providers, Legal team, Advisory team, and Marketing team before issuing the token.
When on Mainnet, Polymesh will send an email to the providers after you choose them, but in this case (Testnet), you will receive a sample mail that the providers would receive when you launch your STO on Mainnet.
After selecting providers, click on the “Create Token” button and then the “Create Token” button on the popup window. You can proceed to the next step, adding necessary information on the smart contract tied to the tokens.
Incorporate the Legend/critical information
In this step, you will be able to tie a link to your tokens. The link can be a shared file (legend) or a website that contains detailed information about your security token. After including the link, you can click the submit button. Upon clicking the submit button, you’ll be receiving an email with the transaction details. Now You have officially reserved your Token Symbol.
Setup your offering details
Upon clicking the “Setup offering details” button, you can see the “Capped STO” section, where you have to click the “Select and Configure STO” button. Once you click it, you’ll be able to set your offering details like offer start date, end date, payment currency (Poly, ETH, etc.), hard cap, and token price.
The hard cap has to be the amount you want to source via an STO. Once the hard cap amount is achieved, the token sale will be frozen. Once you fill in all the details, click on the “Confirm and launch STO” button. Further, you have to click the “Submit” button on a popup triggered by your Metamask Wallet.
Now, you have successfully launched your STO, and you will receive the transaction details in your mail. However, only whitelisted ETH addresses can buy your tokens (due to regulatory requirements), so you have a little more work to do in the next step.
Whitelisting ETH addresses
You can add ETH addresses individually or in bulk. If you want to add many ETH addresses in one go, you have to create a CSV document with three columns. Column1 should have ETH addresses, Colum 2 should have “Sell restriction date, and fill Column 3 with “Buy restriction date.
Import the CSV document, click on the “Add investors” button, and submit the approved investors to complete the process.
Now, get on with your marketing, spread the word, and let your investors know that they can buy your tokens.
