Purpose-built for deterministic finality and atomic transfers
Polymesh provides a simplified protocol-layer approach to transfers and deterministic finality, enabling atomic settlement directly onchain.
Probabilistic finality mechanisms, cumbersome compliance automation, and the unknown identity of block authors prevent general-purpose blockchains from serving as a golden record of asset ownership. To contain a true representation of ownership, the blockchain must provide deterministic finality.
By creating assets at the protocol layer, Polymesh provides a simplified approach to transfers and deterministic finality.
Polymesh reduces delivery failure without requiring prefunding and can provide deterministic finality. This is achieved through its native Settlement Engine, which facilitates delivery-versus-payment (DvP) settlement without introducing third-party risk.
Ultimately, transaction finality or settlement is possible on Polymesh because of the way governance, identity, and compliance are woven together into the chain’s core.
By creating assets at the protocol layer, Polymesh is able to provide a simplified approach to transfers that prevents unauthorized transfers and airdrops through bilateral trade affirmation.
Polymesh relies on its Governing Council to set criteria and permission node operators. Beyond that, forkless upgrades provide critical assurance that the transaction won’t be reverted having followed the wrong fork.
In addition to requiring known identities for the buyer and seller, Polymesh ensures every node operator is known and permissioned. This is critical for finality as otherwise the question of whether a transaction happened may yield two different responses– a mathematical one, which says a transaction in the block was verified and broadcasted, and a legal one that might say something else.
Delivery failure and prefunding aren't problems on Polymesh. Once a buyer and seller affirm a transfer, the assets are committed– they can’t be spent in other transactions, but the holder doesn’t need to relinquish control in advance. Compliance rules are then automatically checked and the transfer is either wholly completed (and instantly settled atomically) or wholly rejected (with the assets immediately returned).
Polymesh’s asset transfer approach eliminates ongoing regulatory concerns over airdrops and any associated AML and tax implications.
Users are required to affirm settlement instructions before tokens appear in wallets, ensuring assets are accounted for and transfers happen smoothly.
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Instructions are atomic and execute completely or not at all. Both parties need to affirm the entire instruction is agreeable and properly represents their agreement. Instructions contain other details such as when to actually execute, but because the actual execution is atomic, it’s not possible for one part of the instruction to be executed but not the other.
Once an instruction has a signed receipt for off-chain action, that receipt is permanently marked as used. Polymesh ensures that each instruction executes in full or not at all, enabling DvP and freeing institutions from the need for prefunding or smart contract escrow
The Polymesh Settlement Engine reduces delivery failure risk by immediately committing assets once a settlement instruction is affirmed to prevent them being spent in other transactions.
The Settlement Engine runs at the protocol layer, facilitating asset transfers on an atomic basis without requiring a smart contract to hold custody of both assets for the transfer to occur.
A beneficiary account on Polymesh can authorize a custodian to act on its behalf within specific portfolios. Upon acceptance, the custodian gains the ability to manage settlement instructions for those portfolios.
The legal title to securities remains with the beneficiary. Custodial authority can be revoked at any time, and multiple custodians can be assigned across portfolios based on operational or regulatory needs.
Note that within this setup, the custodian doesn’t own the securities on chain; the beneficiary still owns them, and the relationship can always be revoked. It’s therefore incumbent on the beneficiary to partition their portfolios and assets and designate their custodian(s) so as to reflect the desired mix of responsibilities.
