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The blockchain
July 8, 2024
The blockchain

Demystifying permissioned blockchains: how Polymesh sets the standard

Explore the unique features behind Polymesh’s public permissioned infrastructure and how Polymesh sets a new standard for permissioned blockchains in terms of security and compliance. 

Polymesh is recognized as a leading public permissioned blockchain by the Global Financial Markets Association, Boston Consulting Group, and others. 

Public permissioned blockchains vary by design but typically feature selective restriction through authentication for access to certain privileges and more open, publicly available access for others. On Polymesh, this looks like permissioned node operators and a minimal identity verification process for user-level access alongside publicly-accessible blockchain data. 

This blog post explores the unique features behind Polymesh’s public permissioned infrastructure and how Polymesh sets a new standard for permissioned blockchains in terms of security and compliance. 

What makes Polymesh stand out among other permissioned blockchains? 

Being a field focused on innovation, technology tends to contain many products invented before any use case is identified. For blockchain, the excitement around its applications has also led to the creation of many networks that purport to multiple use cases and, in effect, fail to properly deliver on their particular niche requirements. 

From the beginning Polymesh has stood out from other blockchains, distinguishing itself by focusing specifically on the needs of financial institutions through purpose-built infrastructure for tokenization. Polymesh was born out of discussions with large financial institutions, regulators, and other important players in capital markets, and continuously evolves alongside their requirements.

These discussions identified that one of the major problems facing financial institutions in transitioning to tokenization was the tradeoff that occurred when choosing between private permissioned versus public permissionless infrastructure. 

Public permissionless networks are better for use cases involving large-scale interoperability and broad access but carry the risk of interacting with blacklisted entities, a major hindrance for regulated entities executing transactions of billions of dollars. Private permissioned blockchains offer a semblance of security and control but require governance to be managed by a central entity, limiting the network’s ability to decentralize systems. 

Polymesh, a public permissioned blockchain purpose-built for regulated assets, removes these limitations by providing a compliance-ready and scalable infrastructure specifically for capital markets. User-level access is restricted to participants with verified identities and node operators – the entities who run operator nodes – must be known, licensed financial entities.

How Polymesh enables regulatory compliance within blockchain 

Polymesh’s permissioned infrastructure enables institutions to fulfill regulatory compliance requirements. 

On Polymesh, customizable compliance rules can be embedded into tokens for automated enforcement in transactions. Compliance rules can be combined and tailored to asset type, jurisdiction, and regulatory regime and modified as regulation evolves. 

This compliance-centric approach allows network participants to meet Know Your Customer (KYC) and Anti-Money Laundering (AML) requirements, mitigating the legal risks for financial institutions and facilitating the tokenization of assets, including security tokens, in a secure environment. 

The comprehensive automation also enables faster processing and reduces costs, as issuers can set flexible, extendable rules that automatically enforce without manual or semi-manual approval of individual transfers or the use of complex, expensive, third-party smart contracts.

Compliance on Polymesh leverages onchain identity. To participate in the network users must undergo a minimal digital identity verification process that ties their onchain identity as referenced through their decentralized identifier, or DID, to a real world individual or organization. Attestations such as residency or accreditation can be attached to this onchain identity as needed, enabling issuers and intermediaries to examine the blockchain and confirm questions regarding participant identities as necessary for regulatory compliance. 

Key features of Polymesh that enhance efficiency, security, and compliance

Polymesh’s purpose-built infrastructure offers various features that enhance efficiency, security, and compliance in asset tokenization. 


Financial institutions benefit from Polymesh’s compliance engine, which reduces legal risks associated with asset tokenization and transactions. 

Robust security 

Polymesh has had 100% uptime with multiple external audits and no security vulnerabilities. Proof of stake keeps the blockchain operational and secure while being more energy efficient than traditional proof of work chains. 

Operational efficiency

Polymesh’s API-driven architecture eliminates the need for complex, expensive, third-party smart contracts. 

Known and licensed node operators

Polymesh node operators are known, licensed financial entities. This prevents pseudonymous entities from participating in proof of stake to receive rewards and ensures a high level of security. 

Choose Polymesh to benefit from purpose-built infrastructure 

Polymesh’s public permissioned approach allows for seamless integration with existing financial systems and enables entities to benefit from blockchain and decentralize operations without the security and compliance risks associated with public permissionless networks. 

By combining identity and compliance with robust security, governance, and scalable infrastructure, Polymesh sets the standard for blockchain technology. The public permissioned blockchain empowers financial institutions to tokenize assets securely and efficiently while facilitating enhanced compliance with regulatory requirements. 

With the newly-launched Polymesh Private, it’s also possible to take advantage of Polymesh for asset tokenization without committing to public permissioned infrastructure. Polymesh Private is a bespoke, privately-run instance of the Polymesh blockchain that combines the benefits of its purpose-built infrastructure with enhanced privacy and control. Public compatibility makes it easy to eventually switch networks to Polymesh’s public permissioned network without major disruption to operations.

To learn more about Polymesh’s permissioned architecture, visit polymesh.network/permissioned-blockchain.

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